Credit Agreement

ABL CREDIT AGREEMENT Dated as of August 9, 2016 Among LSF9 CYPRESS PARENT LLC, as Holdings, LSF9 CYPRESS HOLDINGS LLC, as the Initial Borrower, THE ADDITIONAL US BORROWERS PARTY HERETO, THE CANADIAN BORROWERS PARTY HERETO, THE LENDERS PARTY HERETO, ...

Exhibit 10.1

Execution Version

 

 

 

ABL CREDIT AGREEMENT

dated as of

August 9, 2016

Among

LSF9 CYPRESS PARENT LLC,

as Holdings,

LSF9 CYPRESS HOLDINGS LLC,

as the Initial Borrower,

THE ADDITIONAL US BORROWERS PARTY HERETO,

THE CANADIAN BORROWERS PARTY HERETO,

THE LENDERS PARTY HERETO,

GOLDMAN SACHS BANK USA,

as Administrative Agent,

and

BANK OF AMERICA, N.A.,

as Collateral Agent,

GOLDMAN SACHS BANK USA,

BANK OF AMERICA, N.A.

And

WELLS FARGO BANK, N.A.,

as Joint Lead Arrangers and Joint Bookrunners

and

RBC CAPITAL MARKETS1

as Joint Bookrunner

 

 

 

Reference is made to the ABL Intercreditor Agreement dated as of August 9, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Goldman Sachs Bank USA, as Revolving Administrative Agent (as defined therein), Wilmington Trust, National Association, as the Notes Collateral Agent, any Additional Pari Passu Obligations Agent and any other Additional Junior Obligations Agent or other Persons from time to time party thereto, and acknowledged and agreed by LSF9 Cypress Parent LLC, LSF9 Cypress Holdings LLC and each other party from time to time party thereto. Each Lender hereunder (a)

 

1 

RBC Capital Markets is a brand name for the capital markets activities of Royal Bank of Canada and its affiliates.


acknowledges that it has received a copy of the Intercreditor Agreement, (b) consents to the subordination of Liens provided for in the Intercreditor Agreement, (c) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (d) authorizes and instructs the Administrative Agent to enter into the Intercreditor Agreement as Administrative Agent and on behalf of such Lender. The foregoing provisions are intended as an inducement to the lenders under this Agreement to permit the incurrence of Indebtedness under this Agreement and to extend credit to the Borrowers and such lenders are intended third party beneficiaries of such provisions. Notwithstanding anything herein to the contrary, the liens and security interests granted in the Security Documents to the Revolving Administrative Agent pursuant to this Agreement in any Collateral and the exercise of any right or remedy by the Revolving Administrative Agent with respect to any Collateral hereunder, are subject to the provisions of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and the terms of this Agreement, the terms of the ABL Intercreditor Agreement shall govern and control.


TABLE OF CONTENTS

 

     Page  

SECTION 1.     DEFINITIONS

     1   

1.1

 

Defined Terms

     1   

1.2

 

Other Definitional Provisions

     59   

1.3

 

Interpretation (Quebec)

     60   

1.4

 

Accounting Terms; GAAP

     61   

1.5

 

Pro Forma Calculations

     61   

1.6

 

Classification of Permitted Items

     62   

1.7

 

Rounding

     63   

1.8

 

Currency Equivalents Generally

     63   

SECTION 2.     AMOUNT AND TERMS OF COMMITMENTS

     64   

2.1

 

Revolving Credit Commitments

     64   

2.2

 

Loans and Borrowings

     65   

2.3

 

Requests for Revolving Credit Borrowing

     66   

2.4

 

Letters of Credit

     67   

2.5

 

Funding of Borrowings

     75   

2.6

 

Interest Elections

     75   

2.7

 

Termination and Reduction of Commitments

     77   

2.8

 

Repayment of Revolving Credit Loans; Evidence of Debt

     77   

2.9

 

Prepayment of Loans

     78   

2.10

 

Facility Fees

     78   

2.11

 

Mandatory Prepayments

     79   

2.12

 

Interest

     80   

2.13

 

Alternate Rate of Interest

     81   

2.14

 

Increased Costs

     81   

2.15

 

Break Funding Payments

     83   

2.16

 

Taxes

     83   

2.17

 

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     87   

2.18

 

Mitigation Obligations; Replacement of Lenders

     88   

2.19

 

Defaulting Lenders

     90   

2.20

 

Incremental Facilities

     92   

2.21

 

Cash Management

     95   

2.22

 

Extensions of Revolving Credit Commitments

     96   

SECTION 3.     REPRESENTATIONS AND WARRANTIES

     99   

3.1

 

Financial Condition

     99   

3.2

 

No Change

     100   

3.3

 

Corporate Existence; Compliance with Law

     100   

3.4

 

Organizational Power; Authorization; Enforceable Obligations

     100   

3.5

 

No Legal Bar

     100   

3.6

 

No Material Litigation

     101   

3.7

 

Ownership of Property; Liens

     101   

3.8

 

Intellectual Property

     101   

3.9

 

Taxes

     101   

3.10

 

Federal Reserve Board Regulations

     101   

3.11

 

ERISA; Canadian Pension Plans

     102   

3.12

 

Investment Company Act

     103   

 

i


TABLE OF CONTENTS

(continued)

 

     Page  

3.13

 

Restricted Subsidiaries

     103   

3.14

 

Use of Proceeds

     103   

3.15

 

Environmental Matters

     103   

3.16

 

Accuracy of Information, Etc

     104   

3.17

 

Security Documents

     104   

3.18

 

Solvency

     105   

3.19

 

Anti-Terrorism, -Money Laundering and -Corruption Laws

     105   

3.20

 

Broker’s or Finder’s Commissions

     105   

3.21

 

Labor Matters

     106   

3.22

 

Borrowing Base Calculation

     106   

3.23

 

Insurance

     106   

3.24

 

Status as Senior Debt

     106   

SECTION 4.     CONDITIONS PRECEDENT

     106   

4.1

 

Conditions to Closing Date

     106   

4.2

 

Conditions to Each Post-Closing Extension of Credit

     110   

SECTION 5.     AFFIRMATIVE COVENANTS

     111   

5.1

 

Financial Statements

     111   

5.2

 

Certificates; Other Information

     113   

5.3

 

Payment of Obligations

     114   

5.4

 

Conduct of Business and Maintenance of Existence, Compliance with Laws, Etc

     114   

5.5

 

Maintenance of Property; Insurance

     115   

5.6

 

Inspection of Property; Books and Records; Discussions

     115   

5.7

 

Notices

     116   

5.8

 

Environmental Laws

     116   

5.9

 

Additional Collateral, Etc

     117   

5.10

 

Use of Proceeds

     119   

5.11

 

Further Assurances

     119   

5.12

 

Canadian Pensions

     119   

5.13

 

Designation of Subsidiaries

     120   

5.14

 

Post-Closing Matters

     120   

SECTION 6.     NEGATIVE COVENANTS

     120   

6.1

 

Financial Covenant

     121   

6.2

 

Limitation on Indebtedness

     121   

6.3

 

Limitation on Liens

     126   

6.4

 

Limitation on Fundamental Changes

     131   

6.5

 

Limitation on Disposition of Property

     132   

6.6

 

Limitation on Restricted Payments

     135   

6.7

 

Limitation on Investments

     138   

6.8

 

Limitation on Optional Payments of Junior Debt Instruments

     142   

6.9

 

Limitation on Transactions with Affiliates

     142   

6.10

 

Limitation on Sales and Leasebacks

     144   

6.11

 

Limitation on Negative Pledge Clauses

     145   

 

ii


TABLE OF CONTENTS

(continued)

 

     Page  

6.12

 

Limitation on Restrictions on Restricted Subsidiary Distributions

     145   

6.13

 

Limitation on Lines of Business

     146   

6.14

 

Limitation on Activities of Parent Entities

     146   

6.15

 

Modification of Certain Agreements

     147   

6.16

 

Changes in Fiscal Periods

     147   

6.17

 

Canadian Defined Benefit Plans

     147   

SECTION 7.     EVENTS OF DEFAULT

     147   

7.1

 

Events of Default

     147   

7.2

 

Right to Cure

     151   

SECTION 8.     THE AGENTS

     152   

8.1

 

Appointment

     152   

8.2

 

Delegation of Duties

     152   

8.3

 

Exculpatory Provisions

     153   

8.4

 

Reliance by Agents

     153   

8.5

 

Notice of Default

     154   

8.6

 

Non-Reliance on the Agents and Other Lenders

     154   

8.7

 

Indemnification

     154   

8.8

 

Agent in Its Individual Capacity

     155   

8.9

 

Successor Administrative Agent

     155   

8.10

 

Successor Collateral Agent

     155   

8.11

 

Initial Borrower as Borrower Agent

     155   

8.12

 

Collateral Matters

     156   

8.13

 

Hypothecary Representative

     156   

SECTION 9.     MISCELLANEOUS

     157   

9.1

 

Notices

     157   

9.2

 

Waivers; Amendments

     159   

9.3

 

Expenses; Indemnity; Damage Waiver

     163   

9.4

 

Successors and Assigns

     165   

9.5

 

Survival

     168   

9.6

 

Counterparts; Integration; Effectiveness

     169   

9.7

 

Severability

     169   

9.8

 

Right of Setoff

     169   

9.9

 

Governing Law; Jurisdiction; Consent to Service of Process

     169   

9.10

 

WAIVER OF JURY TRIAL

     170   

9.11

 

Headings

     171   

9.12

 

Confidentiality

     171   

9.13

 

PATRIOT Act

     172   

9.14

 

Release of Liens and Guarantees; Secured Parties

     172   

9.15

 

No Fiduciary Duty

     174   

9.16

 

Interest Rate Limitation

     174   

9.17

 

Intercreditor Agreements

     174   

9.18

 

Judgment Currency

     175   

 

iii


TABLE OF CONTENTS

(continued)

 

     Page  

SECTION 10.     ADDITIONAL LOAN PARTIES AND OBLIGATIONS

     175   

10.1

 

Additional Borrowers

     175   

10.2

 

Discretionary Guarantors

     176   

10.3

 

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     176   

 

iv


TABLE OF CONTENTS

(continued)

 

SCHEDULES:

 

1.1A    Consolidated EBITDA Adjustments
1.1B    Existing Letters of Credit
1.1C    Mortgaged Property
1.1D    Surviving Debt
2.1    Lenders
2.4    Maximum LC Exposure
3.4    Consents, Authorizations, Filings and Notices
3.13(a)    Restricted Subsidiaries
3.13(b)    Agreements Related to Capital Stock
4.1(h)    Legal Opinions
5.14    Post-Closing Matters
6.2(d)    Existing Indebtedness
6.3(f)    Existing Liens
6.6(d)    Specified Owned Real Properties
6.7(c)    Existing Investments
6.9(b)    Existing Affiliate Transactions
6.11    Existing Negative Pledges
EXHIBITS:   
A-1    Form of Canadian ABL Guarantee and Collateral Agreement
A-2    Form of Canadian NY Law ABL Guarantee and Collateral Agreement
A-3    Form of US ABL Guarantee and Collateral Agreement
B    Form of Compliance Certificate
C    Form of Closing Certificate
D    Form of Perfection Certificate
E    Form of Assignment and Assumption
F    Form of Intercreditor Agreement
G    Form of Revolving Credit Note
H-1 – H-4    Forms of US Tax Compliance Certificates
I    Form of Borrowing Request
J    Form of Solvency Certificate
K-1    Form of Notice of Additional Borrower and Assumption Agreement
K-2    Form of Notice of Additional Guarantor
L    Form of Borrowing Base Certificate
M    Form of Collateral Access Agreement

 

v


ABL CREDIT AGREEMENT, dated as of August 9, 2016, among LSF9 CYPRESS PARENT LLC, a Delaware limited liability company (“Holdings”), LSF9 CYPRESS HOLDINGS LLC, a Delaware limited liability company (the “Initial Borrower”), the Additional US Borrowers (as defined herein) party to this Agreement, the Canadian Borrowers (as defined herein) party to this Agreement (together with the Initial Borrower and Additional US Borrowers, “Borrowers”, and each, a “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement as lenders and as issuing banks, and GOLDMAN SACHS BANK USA, as administrative agent (together with its successors and permitted assigns in such capacity, the “Administrative Agent”), and BANK OF AMERICA, N.A., as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENTS

Pursuant to the Purchase Agreement (as this and other capitalized terms used in these preliminary statements are defined in Section 1.1 below), Construction Products Acquisition, LLC will acquire (the “Acquisition”) the Construction Products Distribution Division of Superior Plus Corp., consisting of all of the issued and outstanding Capital Stock of The Winroc Corporation (Midwest), a Minnesota corporation (“Winroc US”), Superior Plus Construction Products Corp., a Pennsylvania corporation (“SPI US”), Winroc-SPI Corporation, an Alberta corporation (“Newco 1”), and 1974303 Alberta Ltd., an Alberta corporation (collectively with Winroc US, SPI US and Newco 1, the “Targets”), on the terms described in the Purchase Agreement.

The Initial Borrower has requested that, substantially simultaneously with the consummation of the Acquisition, the Lenders hereunder extend credit to the Borrowers from time to time on or after the Closing Date in accordance with the Revolving Credit Commitments in an initial aggregate principal amount of up to $250.0 million pursuant to this Agreement (with the aggregate principal amount of Revolving Credit Loans permitted to be borrowed on the Closing Date not to exceed the amount permitted under Section 2.1).

The proceeds of the Loans made on the Closing Date (if any), together with (i) the proceeds of the issuance by the Initial Borrower on the Closing Date of the $575.0 million aggregate principal amount of 8.25% senior secured notes due 2021 and (iii) the proceeds of the Equity Contribution, will be used to finance the Acquisition, to repay Existing Debt and to pay Transaction Costs.

The Lenders have indicated their willingness to extend credit on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

30-Day Excess Availability”: on a given date, the quotient obtained by dividing (a) the sum of each day’s Excess Availability during the thirty (30) consecutive day period immediately preceding such date by (b) thirty (30).


ABR”: when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate, in the case of ABR Loans denominated in US Dollars, or the Canadian Prime Rate, in the case of ABR Loans denominated in Canadian Dollars.

Account”: an “account” as such term is defined in Article 9 of the UCC or the PPSA, as applicable, and any and all supporting obligations in respect thereof.

Account Debtor”: each Person who is obligated on an Account.

Accounting Change”: as defined in Section 1.4.

Acquired Asset Borrowing Base”: the US Acquired Asset Borrowing Base plus the Canadian Acquired Asset Borrowing Base.

Acquisition”: as defined in the preliminary statements hereto.

Additional Lenders”: any Eligible Assignee that extends commitments to the Revolving Credit Facility pursuant to Section 2.20.

Additional Borrower”: each Subsidiary of Holdings set forth on the signature pages hereto as an Additional US Borrower or a Canadian Borrower and any Person that is added as an additional Borrower hereunder with respect to the Revolving Credit Facility in accordance with the provisions set forth in Section 10.1.

Additional US Borrower”: each Domestic Subsidiary of Holdings set forth on the signature pages hereto as an Additional US Borrower and any other Additional Borrower that is a Domestic Subsidiary.

Adjusted LIBO Rate”: with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided, that the Adjusted LIBO Rate shall in no event be less than 0.00%.

Adjustment Date”: the last Business Day of each calendar quarter.

Administrative Agent”: as defined in the preamble hereto.

Administrative Agent Deposit Account”: as defined in Section 2.21(c).

Administrative Questionnaire”: an administrative questionnaire in a form supplied by the Administrative Agent.

Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

Agent Advance”: as defined in Section 2.1(c).

Agent Advance Period”: as defined in Section 2.1(c).

Agent Indemnitee”: as defined in Section 8.7.

 

2


Agents”: the collective reference to the Administrative Agent and the Collateral Agent.

Aggregate Borrowing Base”: at any time, the US Borrowing Base at such time plus the Canadian Borrowing Base at such time.

Aggregate Exposure”: with respect to any Lender at any time, the sum of (a) the aggregate principal amount of all Revolving Credit Loans of such Lender then outstanding plus (b) the LC Exposure of such Lender at such time.

Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure (including its share of unfunded Agent Advances) at such time to the Aggregate Exposure of all Lenders at such time.

Agreement”: this ABL Credit Agreement.

Alternate Base Rate”: 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  12 of 1.00% and (c) the Adjusted LIBO Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed Eurodollar Loan denominated in US Dollars with a one-month Interest Period plus 1.00%; provided that for the purpose of clause (c), the Adjusted LIBO Rate for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London time) by reference to the ICE Benchmark Administration Limited (or such other Person that takes over the administration of such rate) LIBO Rate for deposits in US Dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the ICE Benchmark Administration Limited (or such other Person that takes over the administration of such rate) as an authorized vendor for the purpose of displaying such rates). If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the immediately preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or such 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 such Adjusted LIBO Rate, respectively.

Anticipated Cure Deadline”: as defined in Section 7.2(a).

Applicable Margin”: for any day the applicable rate per annum set forth below, based upon the Historical Excess Availability as of the most recent Adjustment Date; provided that until the first Adjustment Date occurring after the first full fiscal quarter ended after the Closing Date, the “Applicable Margin” shall be the applicable rate per annum set forth below in Level II:

 

Level

 

Historical Excess Availability:

  Applicable Margin for
Eurodollar Loans:
    Applicable Margin for
ABR Loans:
 

I

  Equal to or greater than 67.0%     1.25     0.25

II

 

Less than 67.0% and equal to or greater than 33.0%

    1.50     0.50

 

3


Level

 

Historical Excess Availability:

  Applicable Margin for
Eurodollar Loans:
    Applicable Margin for
ABR Loans:
 

III

  Less than 33.0%     1.75     0.75

The Applicable Margin shall be adjusted quarterly on a prospective basis as of each Adjustment Date based upon the Historical Excess Availability in accordance with the table above. Notwithstanding anything to the contrary contained above in this definition, (i) the Applicable Margins shall be those that correspond to a Historical Excess Availability at Level III above at all times during which there shall exist any Event of Default, (ii) if any Borrowing Base Certificate delivered pursuant to this Agreement is at any time restated or otherwise revised to reflect any decreased Borrowing Base, or if the information set forth in any such Borrowing Base Certificate otherwise proves to be false or incorrect, in each case, such that the Applicable Margin would have been higher than was otherwise in effect during any period, without constituting a waiver of any Default or Event of Default arising as a result thereof, interest due under this Agreement shall be recalculated by the Administrative Agent at such higher rate for any applicable periods and shall be due and payable within five (5) Business Days of receipt of such calculation by the Initial Borrower from the Administrative Agent and shall be payable only to the Lenders whose Commitments were outstanding during such period when the Applicable Margin should have been higher (regardless of whether such Lenders remain parties to this Agreement at the time such payment is made) (provided that any additional interest due as a result of this clause (ii) shall not be due and payable until five (5) Business Days of receipt of such calculation and accordingly, any nonpayment of such interest or fees as a result of any such inaccuracy shall not constitute a Default (whether retroactively or otherwise), and none of such additional amounts shall be deemed overdue or accrue interest at any time prior to the date that is five (5) Business Days of receipt of such calculation), (iii) from and after the most recent Incremental Facility Closing Date for any Incremental Facility Amendment pursuant to which the Applicable Margins have been increased above the Applicable Margins in effect immediately prior to such Incremental Facility Closing Date, the Applicable Margins shall be increased to those respective percentages per annum set forth in the applicable Incremental Facility Amendment and (iv) from and after any Extension, with respect to any Extended Revolving Credit Commitments, the Applicable Margins specified for such Extended Revolving Credit Commitments shall be those specified in the applicable definitive documentation thereof.

Applicable Percentage”: with respect to any Revolving Credit Lender, the percentage of the total Revolving Credit Commitments represented by such Lender’s Revolving Credit Commitment. If the Revolving Credit Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments. The Applicable Percentage shall be adjusted appropriately, as determined by the Administrative Agent, in accordance with Section 2.19(c) to disregard the Revolving Credit Commitment of Defaulting Lenders.

Approved Currency”: each of US Dollars and Canadian Dollars.

Approved Fund”: any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit as its primary activity 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”: the collective reference to Goldman Sachs Bank USA, Bank of America, N.A. and Wells Fargo Bank, N.A., as joint lead arrangers for the Revolving Credit Facility.

 

4


Assignment and Assumption”: an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit E or any other form approved by the Administrative Agent and Holdings.

Attributable Indebtedness”: when used with respect to any Sale and Leaseback Transaction, as at the time of determination, the present value (discounted at a rate equivalent to the Initial Borrower’s then current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

Auto Renewal Letter of Credit”: as defined in Section 2.4(c).

Availability Period”: the period from and including, the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Credit Commitments.

Average Revolving Credit Facility Balance”: for any period, the amount obtained by dividing the Aggregate Exposure at the end of each day for such period by the number of days in such period.

Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

Bail-In Legislation”: with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

Bankruptcy Code”: Title 11 of the United States Code (11 U.S.C. § 101, et seq.).

Bankruptcy Event”: with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding or a corporate statutory arrangement proceeding having similar effect, is subject to, or any Person that directly or indirectly controls such Person is subject to, a forced liquidation, or has had a receiver, conservator, trustee, administrator, custodian, monitor, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or any substantial part of its assets, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided, that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, so long as 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.

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

Board of Directors”: with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such person or, if there is none, the Board of Directors of the managing member of such Person, (iii) in the case of any partnership, the Board of Directors of the general partner of such Person, (iv) in any other

 

5


case, the functional equivalent of the foregoing, and (v) in the case of any Person organized under the laws of a jurisdiction other than the United States, any State thereof or the District of Columbia, the foreign equivalent of any of the foregoing.

Borrower” and “Borrowers”: as defined in the preamble.

Borrower Agent”: as defined in Section 8.11.

Borrower Group Member”: any Borrower or any of the Restricted Subsidiaries of any such Borrower.

Borrower Loan Party”: any Borrower or any Subsidiary Guarantor.

Borrower Materials”: as defined in Section 9.1.

Borrowing”: Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

Borrowing Base”: the US Borrowing Base, the Canadian Borrowing Base or the Aggregate Borrowing Base, as applicable. For the avoidance of doubt, in the case of any Permitted Acquisition, the Borrowing Base shall include amounts attributable to the target or assets acquired in such Permitted Acquisition to the extent set forth in the definitions of US Borrowing Base, Canadian Borrowing Base and Aggregate Borrowing Base and subject to the limits of the Acquired Asset Borrowing Base to the extent applicable.

Borrowing Base Certificate”: as defined in Section 5.2(c).

Borrowing Request”: a request by a Borrower for a Borrowing substantially in the form of Exhibit I.

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

Canadian ABL Sublimit”: $75.0 million as such amount may be increased from time to time in accordance with Section 2.20.

Canadian Acquired Asset Borrowing Base”: as defined in the definition of Canadian Borrowing Base.

Canadian Anti-Money Laundering Laws”: (as the context requires) (i) the Criminal Code (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), including any guidelines or orders thereunder, the Special Economic Measures Act (Canada), Resolutions Implementing the United Nations Resolution on the Suppression of Terrorism, United Nations Al-Qaida and Taliban Regulations, or (ii) any other applicable anti-money laundering, anti-terrorist financing, sanction and “know your client” laws of Canada

Canadian Borrowers”: each Canadian Subsidiary of Holdings set forth on the signature pages hereto as a Canadian Borrower and any other Additional Borrower that is a Canadian Subsidiary.

 

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Canadian Borrowing Base”: as of any date of calculation, the amount calculated as the “Canadian Borrowing Base” pursuant to the Borrowing Base Certificate most recently delivered to the Agents in accordance with Section 5.2(c) (but as modified as provided below in this definition), equal to, without duplication, the sum of:

(a) 85.0% of the book value of Eligible Trade Accounts of each Canadian Loan Party; plus

(b) 90.0% of the book value of Eligible Credit Card Accounts of each Canadian Loan Party; plus

(c) the lesser of (i) 75.0% of Value of Eligible Inventory of each Canadian Loan Party and (ii) 85.0% of the NOLV of Eligible Inventory for each Canadian Loan Party; plus

(d) 100% of Eligible Cash of each Canadian Loan Party; minus

(e) the Eligible Reserves on the Canadian Borrowing Base.

Notwithstanding the foregoing, any Inventory (including inventory in transit) and Accounts (i) acquired by any Canadian Loan Party in a Permitted Acquisition or (ii) of any Person that becomes a Canadian Loan Party in connection with such Permitted Acquisition, in each case, subject to a first priority Lien in favor of the Administrative Agent (subject to First Priority Priming Liens), may be immediately included in a Borrowing Base Certificate delivered by the Borrowers in an amount equal to 50.0% of the book value thereof as set forth in the consolidated balance sheet of the relevant acquired entities or sellers (in the case of an asset acquisition) for the most recently ended fiscal quarter of the Canadian Loan Parties for which financial statements have been delivered pursuant to Section 5.1(a) or (b), and applying eligibility and reserve criteria consistent with those applied to the calculation of the Canadian Borrowing Base (other than eligibility and reserve criteria based in whole or in part upon the absence of a field examination or inventory appraisal), until the completion by the Collateral Agent of a reasonably satisfactory field examination and inventory appraisal in respect thereof (the “Canadian Acquired Asset Borrowing Base”). To the extent that the Collateral Agent has not completed, at the Borrowers’ expense, a field examination and inventory appraisal reasonably satisfactory to each Agent within 90 days of the acquisition of such Inventory and Accounts (or such longer period as the Collateral Agent may reasonably agree) such Inventory and Accounts will cease to be eligible for inclusion in the Canadian Borrowing Base.

The Collateral Agent shall have the right (but not the obligation) to review such computations and if the Collateral Agent shall have reasonably determined in good faith in its Permitted Discretion that such computations have not been calculated in accordance with the terms of this Agreement, the Collateral Agent shall have the right to correct any such errors.

Canadian Defined Benefit Plan” means any Canadian Pension Plan that is a “registered pension plan” as defined in subsection 248(1) of the ITA and which contains a “defined benefit provision” as defined in subsection 147.1(1) of the ITA, whether existing on the Closing Date or which would be considered a Canadian Defined Benefit Plan if assumed, adopted or otherwise participated in or contributed to by a Group Member for its employees or former employees in Canada thereafter.

Canadian Dollars”: dollars in lawful currency of Canada.

Canadian Guarantee and Collateral Agreements”: each of (i) the Canadian ABL Guarantee and Collateral Agreement among each Canadian Loan Party and the Administrative Agent, substantially in the

 

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form of Exhibit A-1 (the “Canadian ABL Guarantee and Collateral Agreement”), and (ii) the Canadian NY Law ABL Guarantee and Collateral Agreement among each Canadian Loan Party and the Administrative Agent, substantially in the form of Exhibit A-2 (the “Canadian NY Law Guarantee and Collateral Agreement”).

Canadian IP Security Agreement”: the Canadian IP Security Agreement to be executed by the Canadian Loan Parties party thereto from time to time with respect to Intellectual Property of the Canadian Loan Parties registered in Canada, as may be amended, restated, supplemented or otherwise modified from time to time, in each case, in substantially the form of Exhibit A to the Canadian ABL Guarantee and Collateral Agreement.

Canadian Letter of Credit”: any Letter of Credit issued hereunder for the account of a Canadian Borrower.

Canadian Line Cap”: at any time, the lesser of (i) 100% (or, during an Agent Advance Period, 110%) of the Canadian Borrowing Base at such time and (ii) the Canadian ABL Sublimit in effect at such time.

Canadian Loan Party”: any Canadian Borrower or Canadian Subsidiary Guarantor.

Canadian Loans”: any Loans made hereunder to a Canadian Borrower.

Canadian Multiemployer Plan”: any Multiemployer Plan that is contributed to by a Group Member in respect of its employees in Canada.

Canadian Pension Plans”: each pension, superannuation benefit or retirement savings plan, arrangement or scheme including any pension plan, top-up pension or supplemental pension, “registered retirement savings plan” (as defined in the ITA), “registered pension plan” (as defined in the ITA) and “retirement compensation arrangement” (as defined in the ITA) that is maintained or contributed to by any Group Member for its employees or former employees in Canada, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec or any Canadian Multiemployer Plan.

Canadian Prime Rate”: for any day, a fluctuating rate per annum equal to the highest of (a) the variable per annum rate of interest most recently announced by Royal Bank of Canada and in effect as its reference rate at its principal office in Toronto, Ontario on such day for determining interest rates on Canadian Dollar-denominated commercial loans in Canada and commonly known as “prime rate” and (b) the rate of interest per annum that is equal to the sum of (i) the CDOR Rate for a one month Interest Period and (ii) 1.00% per annum; provided that in no event shall the Canadian Prime Rate be less than zero.

Canadian Revolving Credit Exposure”: at any time, with respect to any Lender, the sum of such Lender’s Canadian Loans, participations in Agent Advances to Canadian Borrowers and its LC Exposure in respect of Canadian Letters of Credit at such time.

Canadian Security Documents”: the collective reference to (a) the Canadian Guarantee and Collateral Agreements, (b) the Canadian IP Security Agreement, (c) the Deed of Hypothec, (d) any Mortgage with respect to owned real property located in Canada and (d) all other security documents governed by the laws of Canada or any province, territory or other political sub-division thereof hereafter delivered to the Administrative Agent granting a Lien on any Property of any Loan Party to secure any Obligations.

 

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Canadian Subsidiary”: any Subsidiary of Holdings organized or existing under the laws of Canada or one of the provinces or territories of Canada.

Canadian Subsidiary Guarantors”: each Canadian Subsidiary that is a Subsidiary Guarantor.

Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that are required to be capitalized under GAAP on a balance sheet of such Person, it being understood that Capital Expenditures do not include amounts expended to purchase assets constituting an on-going business, including investments that constitute Permitted Acquisitions.

Capital Lease Obligations”: with respect to any Person, 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 (excluding the footnotes thereto) of such Person under GAAP; and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing, including convertible securities but excluding debt securities convertible or exchangeable into any of the foregoing.

Cash Equivalents”: (a) US Dollars or Canadian Dollars; (b) securities and other obligations issued or directly and fully guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof (provided, that the full faith and credit of such country is pledged in support of those securities) having maturities of not more than one year from the date of acquisition; (c) certificates of deposit, time deposits and eurocurrency time deposits with maturities of one year or less from the date of acquisition, demand deposits, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any Lender or with any domestic or foreign bank having, or which is a banking subsidiary of a domestic or foreign bank holding company or any branch of a foreign bank in the US or Canada having, capital and surplus of not less than $500.0 million (or its foreign currency equivalent); (d) fully collateralized repurchase obligations for underlying securities of the types described in clauses (b) and (c) above or clause (f) below entered into with any financial institution meeting the qualifications specified in clause (c) above; (e) commercial paper and variable or fixed rate notes rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) and, in each case, maturing within one year after the date of acquisition; (f) marketable short-term money market and similar highly liquid funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (g) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) with maturities of one year or less from the date of acquisition; (h) Investments with average maturities of one year or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); and

 

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(i) investment funds investing substantially all of their assets in Cash Equivalents of the kinds described in clauses (a) through (h) of this definition.

In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary, Cash Equivalents shall also include (i) Investments of the type and maturity described in clauses (a) through (i) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable Canadian rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (a) through (i) and in this paragraph.

Notwithstanding the foregoing, Cash Equivalents shall include, in the case of any Foreign Subsidiary, amounts denominated in the local currency of the jurisdiction of incorporation or formation of such Foreign Subsidiary in addition to those set forth in clause (a) above; provided, that such amounts are held by such Foreign Subsidiary from time to time in the ordinary course of business and not for speculation.

Cash Management Control Agreement”: a “control agreement” in form and substance reasonably acceptable to the Agents containing terms regarding the treatment of all cash, Cash Equivalents and other amounts on deposit in the respective deposit account or securities account governed by such Cash Management Control Agreement consistent with the requirements of Section 2.21 and in the case of any deposit account or securities account holding Eligible Cash, the requirements set forth in the definition of such term.

Cash Management Obligations”: obligations owed by any Loan Party to any Qualified Counterparty in respect of or in connection with Cash Management Services and designated by such Qualified Counterparty and Holdings in writing to the Agents as a “Cash Management Obligation”.

Cash Management Services”: any treasury, depositary, disbursement, lockbox, funds transfer, pooling, netting, overdraft, stored value card, purchase card (including so-called “procurement cards” or “P-cards”), debit card, credit card, e-payable, cash management and similar services and any automated clearing house transfer of funds.

CDOR Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan denominated in Canadian Dollars, the average of the annual rates for bankers’ acceptances having a specified term equal to the Interest Period of such Eurodollar Loan (or a term as closely as possible comparable to such specified term) of the banks that appears on the Reuters Screen CDOR page as of 11:00 a.m. (Toronto time) on such day (or, if such day is not a Business Day, as of 11:00 a.m. (Toronto time) on the preceding Business Day); provided that if such rate does not appear on the Reuters (or another commercially available source providing quotations of such rate as designated by the Administrative Agent from time to time) Screen CDOR Page on such date as contemplated, then the CDOR Rate on such date shall be the rate at which Royal Bank of Canada is then offering to purchase Canadian Dollar bankers’ acceptances quoted by the Royal Bank of Canada as of 11:00 a.m. (Toronto time) on such date or, if such date is not a Business Day, on the immediately preceding Business Day; provided, further that the CDOR Rate shall, in no event, be less than 0.0%.

CFC”: a “controlled foreign corporation” within the meaning of Section 957 of the Code.

CFPOA”: as defined in Section 3.19.

 

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Change in Law”: (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement or, if later, the date on which the applicable Lender or the applicable Issuing Bank becomes a Lender or an Issuing Bank hereunder, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or, if later, the date on which the applicable Lender or the applicable Issuing Bank becomes a Lender or an Issuing Bank hereunder, or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement or, if later, the date on which the applicable Lender or the applicable Issuing Bank becomes a Lender or an Issuing Bank hereunder; 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 promulgated 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 or foreign regulatory authorities, in each case pursuant to Basel III, in each case shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, promulgated or issued.

Change of Control”: the occurrence of any of the following events: (a) prior to an IPO, the Permitted Investors, taken together, shall cease to beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, securities having a majority of the ordinary voting power for the election of directors of Holdings measured by voting power rather than number of shares; (b) at any time after an IPO, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of Holdings or any of its Subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) (excluding from any determination of the amount of Capital Stock beneficially owned by such “person” or “group”, where such person or group includes both Permitted Investors and one or more Persons that are not Permitted Investors, any Capital Stock beneficially owned by Permitted Investors), other than any such “person” or “group” comprised solely of Permitted Investors, shall become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of Capital Stock representing more than the greater of (i) 35.0% of the ordinary voting power for the election of directors of the Permitted Holding Company that shall have issued or sold Capital Stock in the IPO, measured by voting power rather than number of shares, and (ii) the percentage of such ordinary voting power of such Permitted Holding Company held, directly or indirectly, by the Permitted Investors, taken together (unless the Permitted Investors retain the right, by contract or otherwise, to elect or designate a majority of the directors of the Permitted Holding Company); (c) Holdings shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of the Initial Borrower, free and clear of all Liens (except Permitted Liens); or (d) a Specified Change of Control.

Class”: (a) when used with respect to Lenders, refers to whether such Lenders are Revolving Credit Lenders, Incremental Revolving Lenders (of the same tranche) or Extending Revolving Credit Lenders (of the same tranche), (b) when used with respect to Commitments, refers to whether such Commitments are Revolving Credit Commitments, Incremental Revolving Commitments (of the same tranche) or Extended Revolving Credit Commitments (of the same tranche) and (c) when used with respect to Loans or Borrowings, refers to whether such Loan or the Loans comprising such Borrowing, are Revolving Credit Loans or loans in respect of the same Class of Commitments.

Closing Date”: the date on which the conditions precedent set forth in Section 4.1 shall have been satisfied or waived in accordance with Section 9.2.

 

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Closing Date Availability Amount”: as defined in Section 2.1(a).

Code”: the Internal Revenue Code of 1986, as amended.

Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is created or purported to be created by any Security Document.

Collateral Access Agreement”: a collateral access agreement substantially in the form of Exhibit M (or such other form as may be reasonably satisfactory to each Agent) with such amendments or modifications as may be reasonably satisfactory to the Collateral Agent.

Collateral Foreign Subsidiary”: (a) any Specified Foreign Subsidiary, (b) any subsidiary of Holdings, substantially all the assets of which constitute equity interests in or debt of one or more Specified Foreign Subsidiaries, (c) any subsidiary of Holdings that is treated as a disregarded entity for US federal income tax purposes and that owns (or is treated as owning for U.S. federal income tax purposes) 65.0% or more of the voting stock of a subsidiary of Holdings described in clause (a) or (b) above, or (d) any other subsidiary of Holdings, the pledge of whose voting equity interests could constitute an investment in “United States property” by a CFC with respect to which any US Borrower is a “United States shareholder” within the meaning of section 956 of the Code (or any similar law or regulation in any applicable jurisdiction) or otherwise result in a material adverse tax consequence to Holdings or one of its subsidiaries, as reasonably determined by Holdings (in consultation with the Administrative Agent).

Collection Banks”: as defined in Section 2.21(a).

Commingled Inventory”: Inventory of any Qualified Loan Party that is commingled (whether pursuant to a consignment, a toll manufacturing agreement or otherwise) with Inventory of another Person (other than another Qualified Loan Party) at a location owned, leased or rented by a Qualified Loan Party, but only to the extent that such Inventory of such Qualified Loan Party is not readily identifiable as separate from such Inventory of such other Person.

Commitment”: with respect to any Lender, the Revolving Credit Commitment of such Lender. On the Closing Date, the aggregate amount of Commitments is $250.0 million.

Commitment Letter”: the Commitment Letter, dated as of July 4, 2016, by and between Holdings and the Commitment Parties.

Commitment Parties”: Goldman Sachs Bank USA, Jefferies Finance LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, Royal Bank of Canada, RBC Capital Markets, Credit Suisse AG and Credit Suisse Securities (USA) LLC.

Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1, et seq.), as amended from time to time, and any successor statute.

Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with the Initial Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Initial Borrower and that is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 or 303 of ERISA and Section 412 or 430 of the Code, is treated as a single employer under Section 414 of the Code.

Communications”: as defined in Section 9.1.

 

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Company Intellectual Property”: as defined in Section 3.8(i).

Company Material Adverse Effect”: (a) any event, occurrence, change, result, state of facts or effect that, when considered individually or in the aggregate, is or would reasonably be expected to be materially adverse to the business, assets, liabilities, conditions (financial or otherwise) or results of operations of the Corporations (taken as a whole) or the Business, and (b) with respect to the Sellers, any event, occurrence, change, result, state of facts or effect that, individually or in the aggregate with such other events, occurrences, changes, results, states of facts or effects, materially impairs, prevents, or would reasonably be expected to materially impair or prevent, the ability of the Sellers to consummate the transactions contemplated by this Agreement; provided, however, that any effect arising out of or in connection with any of the following shall not, either alone or in combination with any other such circumstance, constitute or be deemed to have or contribute to a Material Adverse Effect: (1) changes in the Canadian, United States or foreign economies or securities or financial markets in general, (2) changes in the industries in general in which the Corporations operate, (3) any actual or proposed change to an applicable Law, except for judgments, awards or decrees that relate specifically to the Corporations, or any actual or proposed change in GAAP, IFRS or other applicable accounting principles or standard or, in each case, any official interpretations thereof, (4) the negotiation, execution, announcement, pendency or consummation of this Agreement and the transactions contemplated hereby or the identity of Purchaser, including any impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners or employees, (5) any failure by the Corporations to meet any internal or public projections, forecasts or predictions, provided, however, that the underlying facts giving rise to any such failure shall not be disregarded, subject to the other provisions of this definition, for the purposes of determining whether a Material Adverse Effect has occurred (provided, further that this clause (5) shall not be construed as implying that Sellers are making any representation or warranty herein with respect to any internal or public projections, forecasts or predictions, and no such representations or warranties are being made), (6) any natural disaster, hostilities, act of terrorism, civil unrest or war (whether or not threatened, pending or declared) or the escalation or material worsening of any such natural disaster, hostilities, acts of terrorism, civil unrest or war; (7) any matter of which the Purchaser has actual knowledge as of the date of this Agreement and in respect of which the material adverse effect on the Business is reasonably apparent; (8) actions agreed to be taken by the Purchaser in connection with obtaining Competition Act Approval and/or HSR Approval; or (9) any action taken or omitted to be taken at the written request of Purchaser (provided, that any such written request of the Purchaser that is adverse to the Lenders shall require the prior written consent of the Administrative Agent); provided, further that in the case of clauses (1)-(3) and (6) above, such matters shall be taken into account in determining whether a Material Adverse Effect has occurred if and to the extent that the impact of such matters is materially disproportionately adverse to the Business, taken as a whole, as compared to other businesses similar to the Business. Defined terms used in this definition have the meanings ascribed to them in the Purchase Agreement.

Compliance Certificate”: a certificate duly executed by a Responsible Officer, substantially in the form of Exhibit B.

Compliance Period”: any period (a) commencing on the date on which Excess Availability is less than the greater of (i) 10.0% of the Line Cap (without giving effect to any increase thereof during an Agent Advance Period) at such time and (ii) $25.0 million and (b) ending on the first date thereafter on which Excess Availability has been equal to or greater than the greater of (i) 10.0% of the Line Cap (without giving effect to any increase thereof during an Agent Advance Period) at such time and (ii) $25.0 million for a period of thirty (30) consecutive days.

 

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Concentration Account”: any concentration account maintained by any Loan Party (other than any such concentration account constituting an Exempt Account) into which the funds in any collection account are transferred on a periodic basis as provided for in Section 2.21.

Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

Consolidated EBITDA”: for any period means, with respect to the Initial Borrower and the Restricted Subsidiaries, the Consolidated Net Income for such period:

(1) increased (without duplication of each other, and to the extent deducted in determining such Consolidated Net Income for such period (except with respect to clauses (h), (j) and (t) below)), by:

(a) provision for Taxes based on income, profits or capital of the Initial Borrower and the Restricted Subsidiaries, including Federal, state, provincial, franchise and similar taxes attributable to such period; plus

(b) total interest expense (net of interest income to the extent not already included in total interest expense for such period) and, to the extent not reflected in such total interest expense, payments made in respect of hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk (minus any payments received in respect of such hedging obligations or other derivative instruments), amortization or write -off of debt discount and debt issuance costs and commissions and discounts and other fees and charges (including bank fees, agency fees, fees and charges relating to surety bonds in connection with any financing activities and commissions, discounts and other fees and charges owed with respect to letters of credit, bankers’ acceptance or any similar facilities) associated with Indebtedness (including the Loans and the Letters of Credit); plus

(c) depreciation and amortization expense (which, for the avoidance of doubt, will include amortization of deferred financing fees or costs, including the amortization of original issue discount); plus

(d) amortization of intangibles (including goodwill); plus

(e) (A) costs and expenses in connection with the Transactions, (B) any transaction fees, costs and expenses (including upfront fees, commissions, premiums or charges) incurred in connection with, to the extent permitted under the Loan Documents (including any amendment, waiver or other modification of this Agreement), equity issuances (including an IPO), Investments, acquisitions, Dispositions, recapitalizations, mergers, amalgamations, option buyouts or the incurrence, refinancing or repayment of Indebtedness or any amendments, waivers or other modifications under the agreements relating to such Indebtedness or similar transactions in each case whether or not consummated and (C) costs incurred in connection with strategic initiatives, transition costs and other business optimization and information systems-related costs (including non-recurring employee bonuses in connection therewith and non-recurring product and Intellectual Property development costs); plus

(f) non-cash compensation expense, including deferred compensation, and any other non-cash losses, charges and expenses, including write-offs or write-downs (but not including any write-off or write-down of inventory or accounts receivable) and, if applicable, including the excess of rent expense over actual cash rent paid during the relevant period due to the use of straight line rent for GAAP purposes (provided that, to the extent any non-cash charge represents an accrual of or

 

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reserve for potential cash items in any future period, (i) the Initial Borrower may determine not to add back such non-cash charge in the current period or (ii) to the extent the Initial Borrower decides to add back such non-cash charge, the cash payable in respect thereof in such future period shall be subtracted from Consolidated EBITDA); plus

(g) any Permitted Management Fees paid or accrued during such period and any other monitoring, consulting, transaction and advisory fees (including termination fees) and related indemnities, charges and expenses paid to or on behalf of any direct or indirect parent company of the Initial Borrower or any of the Permitted Investors, to the extent permitted to be paid under Section 6.9 (and any accruals in respect thereof) (provided, that any amounts that are added back to Consolidated EBITDA pursuant to this clause (g) in respect of items accrued during such period shall not be added back to Consolidated EBITDA pursuant to this clause in any subsequent period); plus

(h) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not included in Consolidated EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such cash receipts or netting arrangement were deducted in the calculation of Consolidated EBITDA pursuant to clause (2) below for any previous period and not added back; plus

(i) any charges, costs, expenses, accruals or reserves in connection with the rollover, acceleration or payout of equity interests held by management, in each case, to the extent that such charges, costs, expenses, accruals or reserves are funded with the net cash proceeds contributed to Holdings as a capital contribution or net cash proceeds received by Holdings from issuances of Capital Stock of Holdings (other than Disqualified Stock); plus

(j) (A) pro forma ‘‘run rate’’ cost savings, pro forma adjustments, operating expense reductions and synergies related to the Transactions that are reasonably quantifiable, factually supportable and projected by the Initial Borrower in good faith to result from actions that have been taken or initiated or are expected to be taken (in the good faith determination of the Initial Borrower) within 24 months after the Closing Date; (B) pro forma ‘‘run rate’’ cost savings, operating expense reductions and synergies related to acquisitions, dispositions and other specified transactions, restructurings, cost savings initiatives, operating changes and other initiatives that are reasonably quantifiable and projected by the Initial Borrower in good faith to result from actions that have been taken or initiated or are expected to be taken (in the good faith determination of the Initial Borrower) within 24 months after such acquisition, disposition or other specified transaction, restructuring, cost savings initiative, operating change or other initiative; and (C) costs and expenses relating to achieving pro forma ‘‘run rate’’ cost savings, pro forma adjustments, operating expense reductions and synergies described in the preceding clauses (A) and (B) of this clause (j); plus

(k) restructuring and similar charges (including severance, relocation costs, entry into new markets, integration and facilities opening costs and other business optimization expenses, signing costs, retention or completion bonuses, transition costs, costs related to closure/consolidation of facilities and curtailments or modifications to pension and post-retirement employee benefit plans (including any settlement of pension liabilities)); plus

(l) all losses (x) upon any sale, abandonment or other disposition of any asset of the Initial Borrower or any Restricted Subsidiary (including pursuant to any Sale and Leaseback Transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by the Initial Borrower) and (y) from disposed, abandoned,

 

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divested and/or discontinued assets, properties or operations and/or discontinued operations (other than, at the option of the Initial Borrower, assets or properties pending the divestiture or termination thereof); plus

(m) earn-out obligation expense incurred in connection with any Permitted Acquisition or other Investment (including any acquisition or other investment consummated prior to the Closing Date) and paid or accrued during the applicable period; plus

(m) realized foreign exchange losses resulting from the impact of foreign currency changes on the valuation of assets or liabilities on the balance sheet of the Initial Borrower and the Restricted Subsidiaries; plus

(n) unrealized net losses resulting from changes in the fair market value of any non-speculative Hedge Agreements and losses, charges and expenses attributable to the early extinguishment or conversion of Indebtedness, Hedge Agreements or other derivative instruments (including deferred financing expenses written off and premiums paid); plus

(o) non-controlling or minority interest expense consisting of income attributable to third parties in respect of their Capital Stock in non-Wholly Owned Subsidiaries; plus

(p) losses or discounts on sales of Permitted Receivables Financing Assets in connection with any Permitted Receivables Financing; plus

(q) losses attributable to, and payments of, legal settlements, fines, judgments or orders; plus

(r) losses, expenses or other charges associated with, or in anticipation of, or preparation for, compliance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and losses, expenses or other charges relating to compliance with the provisions of the Securities Act, as amended, and the Exchange Act, as amended, as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, charges and losses relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officer’s insurance and other executive costs, legal and other professional fees and listing fees; plus

(s) proceeds of business interruption insurance in an amount representing the earnings for the applicable period that such proceeds are intended to replace (whether or not then received so long as the Initial Borrower in good faith expects to receive such proceeds within the next four fiscal quarters (it being understood that to the extent not actually received within such fiscal quarters, to the extent previously added back to Consolidated Net Income in determining Consolidated EBITDA for a prior fiscal quarter such reimbursement amounts shall be deducted in calculating Consolidated EBITDA for such fiscal quarter)); plus

(t) the adjustments set forth on Schedule 1.1A;

(2) decreased (without duplication) by, to the extent included in determining Consolidated Net Income for such period, the sum of:

(a) interest income on cash and Cash Equivalents and other similar securities (except to the extent deducted in determining total interest expense); plus

 

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(b) any other non-cash gains or income (other than amounts accrued in the ordinary course of business consistent under accrual-based revenue recognition procedures in accordance with GAAP), excluding any such income that represents the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period (other than such cash charges that have not increased Consolidated EBITDA); plus

(c) any income or gain realized (A) upon any sale, abandonment or other disposition of any asset of the Initial Borrower or any Restricted Subsidiary (including pursuant to any Sale and Leaseback Transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by the Initial Borrower) or (B) from disposed, abandoned, divested and/or discontinued assets, properties or operations and/or discontinued operations (other than, at the option of the Initial Borrower, assets or properties pending the divestiture or termination thereof); plus

(d) unrealized net income or gains resulting from changes in the fair market value of any non-speculative Hedge Agreements, and gains attributable to the early extinguishment or conversion of Indebtedness or Hedge Agreements or other derivative instruments, plus

(e) realized foreign exchange income or gains resulting from the impact of foreign currency changes on the valuation of assets or liabilities on the balance sheet of the Initial Borrower and the Restricted Subsidiaries; plus

(f) any non-controlling or minority interest income consisting of loss attributable to third parties in respect of their Capital Stock in non-Wholly Owned Subsidiaries; and

(3) increased or decreased (without duplication) by, as applicable, any adjustments resulting from the application of Accounting Standards Codification Topic 460 or any comparable regulation.

Notwithstanding the foregoing, the Consolidated EBITDA of the Initial Borrower and the Restricted Subsidiaries for (A) the fiscal quarter ended March 31, 2016, shall be deemed to be equal to $30,029,000, (B) the fiscal quarter ended December 31, 2015, shall be deemed to be equal to $33,267,000, (C) the fiscal quarter ended September 30, 2015, shall be deemed to be equal to $42,297,000 and (D) the fiscal quarter ended June 30, 2015, shall be deemed to be equal to $39,352,000.

Consolidated First Lien Debt”: the amount of (x) Consolidated Total Debt under the Loan Documents, the Senior Secured Notes Documents, any Senior Secured Bridge Documents and any Refinancing Indebtedness with respect thereto, to the extent such debt is secured on a first lien basis with respect to any Collateral and (y) the amount of Consolidated Total Debt that is secured by any Collateral on an equal or senior priority basis with such debt described in clause (x) (but without regard to the control of remedies).

Consolidated Fixed Charge Coverage Ratio”: for any period, the ratio of (A)(i) Consolidated EBITDA for the Relevant Reference Period minus (ii) the aggregate amount of all Capital Expenditures made by the Initial Borrower and the Restricted Subsidiaries during such period (other than Capital Expenditures to the extent financed with the proceeds of any sale or issuance of Capital Stock, the proceeds of any asset sale (other than the sale of inventory in the ordinary course of business), any insurance proceeds or the proceeds of any incurrence of Indebtedness (other than the incurrence of any Loans), but including Capital Expenditures to the extent financed with proceeds of Loans) minus (iii) the aggregate amount of all cash payments made by the Initial Borrower and the Restricted Subsidiaries in respect of income taxes or income tax liabilities (net of cash income tax refunds) during such period

 

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(including Restricted Payments paid pursuant to clauses (ii) through (v) of Section 6.6(c)) to (B) Consolidated Fixed Charges of the Initial Borrower for such period.

Consolidated Fixed Charges”: with respect to any Person for any period, the sum of (i) Consolidated Interest Expense plus (ii) scheduled payments of principal on indebtedness plus (iii) without duplication of any amounts included in clause (iii) of the definition of “Consolidated Fixed Charge Coverage Ratio” the aggregate amount of all Restricted Payments paid in cash by the Initial Borrower or any of the Restricted Subsidiaries to any Person other than the Initial Borrower or any of its Restricted Subsidiaries as permitted under (x) Section 6.6(b), (d), (g), (i), (k), (n) and (o) or (y) solely with respect to any such Restricted Payments by the Initial Borrower for costs, expenses, fees, salaries, bonuses and benefits that are attributable to the ownership or operations of the Borrower Group Members for such period, Section 6.6(c) (except for, in the case of clauses (x) and (y), Restricted Payments to the extent financed with the proceeds of any sale or issuance of Capital Stock, the proceeds of any asset sale (other than the sale of inventory in the ordinary course of business), insurance proceeds or the proceeds of any incurrence of Indebtedness (other than the incurrence of any Loans)), in each case, for such period.

Consolidated Interest Expense”: with respect to any Person for any period, total cash interest expense for such period (net of any cash interest income for such period) with respect to all outstanding Indebtedness, calculated on a consolidated basis in accordance with GAAP, to the extent such expense was deducted in computing Consolidated Net Income plus consolidated capitalized interest for such period, whether paid or accrued, plus net payments (positive or negative) under interest rate swap agreements (other than in connection with the early termination thereof).

Consolidated Net Income”: with respect to the Initial Borrower for any period, the net income (loss) of the Initial Borrower and the Restricted Subsidiaries for such period determined on a consolidated basis on the basis of GAAP; provided, however, that there will not be included in such Consolidated Net Income:

(1) any net income (or loss) of any Person if such Person is not a Restricted Subsidiary, except that the Initial Borrower’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed by such Person during such period to the Initial Borrower or a Restricted Subsidiary as a dividend or other distribution or return on investment or could have been distributed, as reasonably determined by a Responsible Officer of the Initial Borrower;

(2) [reserved];

(3) any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss) realized upon the sale or other Disposition of any asset or disposed operations of the Initial Borrower or any Restricted Subsidiaries (including pursuant to any Sale and Leaseback Transaction) which is not sold or otherwise disposed of in the ordinary course of business (as determined in good faith by a Responsible Officer or the Board of Directors of the Initial Borrower);

(4) any extraordinary, exceptional, unusual or nonrecurring gain, loss, charge or expense (including Transaction Costs) or any charges, expenses or reserves in respect of any restructuring, redundancy or severance expense;

(5) the cumulative effect of a change in accounting principles, including any impact resulting from an election by the Initial Borrower to apply IFRS at any time following the Closing Date;

 

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(6) any (i) non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards and any non-cash deemed finance charges in respect of any pension liabilities or other provisions or on the re-evaluation of any benefit plan obligation and (ii) income (loss) attributable to deferred compensation plans or trusts;

(7) all deferred financing costs written off and premiums paid or other expenses incurred directly in connection with any early extinguishment of Indebtedness or hedging obligations and any net gain (loss) from any write-off or forgiveness of Indebtedness;

(8) any unrealized gains or losses in respect of hedging obligations or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of hedging obligations;

(9) any unrealized foreign currency translation increases or decreases or transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person, including those related to currency remeasurements of Indebtedness or other obligations of the Initial Borrower or any Restricted Subsidiary owing to the Initial Borrower or any Restricted Subsidiary (including any net loss or gain resulting from hedging obligations for currency exchange risk), and any unrealized foreign exchange gains or losses relating to translation of assets and liabilities denominated in foreign currencies;

(10) any purchase accounting effects including, but not limited to, adjustments to inventory, property and equipment, software and other intangible assets and deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Initial Borrower and the Restricted Subsidiaries), as a result of any consummated acquisition, or the amortization or write-off of any amounts thereof (including any write-off of in process research and development);

(11) any goodwill or other intangible asset impairment charge or write-off;

(12) any after-tax effect of income (loss) from the early extinguishment or cancellation of Indebtedness or hedging obligations or other derivative instruments;

(13) accruals and reserves that are established within twelve (12) months after the Closing Date that are so required to be established as a result of the Transactions in accordance with GAAP;

(14) any net unrealized gains and losses resulting from hedging obligations or embedded derivatives that require similar accounting treatment and the application of Topic 815 and related pronouncements; and

(15) any deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release of any valuation allowances related to such item.

In addition, to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include (i) any expenses and charges that are reimbursed by indemnification or other reimbursement provisions in connection with any investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder, or, so long as the Initial Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed and only to the extent that such amount is (A) not denied by the applicable payor in writing within 180 days and (B) in fact

 

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reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days) and (ii) to the extent covered by insurance (including business interruption insurance) and actually reimbursed, or, so long as the Initial Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (A) not denied by the applicable carrier in writing within 180 days and (B) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption.

Consolidated Total Assets”: the consolidated total assets of the Borrower Group Members, determined in accordance with GAAP, shown on the consolidated balance sheet of the Initial Borrower as of the end of the most recently ended fiscal quarter prior to the applicable date of determination for which financial statements have been delivered; provided, that, for purposes of calculating “Consolidated Total Assets” under this Agreement, the consolidated assets of the Borrower Group Members shall be adjusted to reflect any acquisitions and dispositions of assets outside the ordinary course of business that have occurred during the period from the date of the applicable balance sheet through the applicable date of determination, including giving effect to the transaction being tested under this Agreement.

Consolidated Total Debt”: as of any date of determination, (a) the aggregate principal amount of Indebtedness for borrowed money (other than Indebtedness with respect to Cash Management Services and intercompany Indebtedness owed to the Initial Borrower or any of the Restricted Subsidiaries) of the Initial Borrower and its Restricted Subsidiaries outstanding on such date, minus (b) the aggregate amount of Unrestricted Cash included in the consolidated balance sheet of the Initial Borrower and the Restricted Subsidiaries as of such date.

Contractual Obligation”: with respect to any Person, (i) the Organizational Documents of such Person and (ii) any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

Control Investment Affiliate”: with respect to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

Controlled Account”: each deposit account or securities account maintained by a Loan Party at a Collection Bank and subject to a Cash Management Control Agreement, including any Concentration Account.

Credit Card Accounts”: payment intangibles from the proceeds of any Credit Card Processor.

Credit Card Processor”: Visa, Mastercard, American Express, Diners Club, Discover and any other major credit card processor acceptable to the Administrative Agent in its Permitted Discretion.

Credit Party”: the Administrative Agent, any Issuing Bank or any other Lender.

Cure Amount”: as defined in Section 7.2(a).

Cure Right”: as defined in Section 7.2(a).

 

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Debtor Relief Laws”: the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada) and other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, compromise, arrangement or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally, and including the statutory arrangement provisions of any corporations statute having similar effect.

Deed of Hypothec”: the deed of hypothec to be dated as of the date of this agreement and executed by each of the Canadian Loan Parties hereunder, as may be amended, restated, supplemented or otherwise modified from time to time.

Default”: any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

Defaulting Lender”: 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 (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 Holdings, the Initial Borrower, the Issuing Banks or the Administrative Agent 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 written request by the Administrative Agent, any Lender or any Issuing Bank acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit (unless such Lender 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) under this Agreement (provided, that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s and the Initial Borrower’s receipt of such certification in form and substance reasonably satisfactory to the Administrative Agent), or (d) admits that it is insolvent or has (or has a direct or indirect parent that has) become the subject of a Bankruptcy Event or a Bail-in Action. This definition is subject to the provisions of the last paragraph of Section 2.19.

Designated Non-Cash Consideration”: the fair market value (as determined in good faith by the Initial Borrower) of non-cash consideration received by a Borrower Group Member in connection with a Disposition pursuant to Section 6.5(j) that is designated as “Designated Non-Cash Consideration” pursuant to a certificate of a Responsible Officer, setting forth the basis of such valuation, less the amount of cash and Cash Equivalents received in connection with a subsequent sale of such Designated Non-Cash Consideration.

Discretionary Guarantor”: as defined in Section 10.2.

Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof (excluding Liens); and the term “Dispose” shall have a correlative meaning.

 

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Disqualified Capital Stock”: any Capital Stock which, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (i) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock), in whole or in part, (iii) provides for the scheduled payments or dividends in cash, or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is 91 days after the then Latest Maturity Date at the time of issuance, except, in the case of clauses (i) and (ii), if as a result of a change of control event or asset sale or other Disposition or casualty event, so long as any rights of the holders thereof to require the redemption thereof upon the occurrence of such a change of control event or asset sale or other Disposition or casualty event are subject to the prior payment in full of the Obligations; provided, that if such Capital Stock is issued pursuant to a plan for the benefit of employees of Holdings or any Group Member or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by Holdings or any Group Member in order to satisfy applicable statutory or regulatory obligations.

Disqualified Lender”: (i) any bank, financial institution or other institutional lender that has been identified in writing to the Arrangers as a Disqualified Lender on or prior to the date of the Commitment Letter, (ii) any other Persons who are competitors of Holdings or any Borrower Group Member that are separately identified in writing by Holdings or the Sponsor to the Arrangers (or, after the Closing Date, to the Administrative Agent) from time to time and (iii) in each case of the foregoing clauses (i) and (ii), any of such Person’s Affiliates (other than any bona-fide debt funds) that are either (x) identified in writing by Holdings or the Sponsor to the Administrative Agent from time to time or (y) clearly identifiable as an Affiliate on the basis of such Affiliate’s name. The list of Disqualified Lenders shall be made available by the Administrative Agent to the Lenders upon request therefor.

Domestic Subsidiary”: a Restricted Subsidiary that is organized under the laws of the United States or any State thereof or the District of Columbia.

Dominion Period”: any period (a) commencing on the date on which (i) a Specified ABL Default has occurred and is continuing or (ii) Excess Availability is less than the greater of (x) 10.0% of the Line Cap (without giving effect to any increase thereof during an Agent Advance Period) as then in effect and (y) $25.0 million, for a period of five (5) consecutive Business Days and (b) ending on the first date thereafter on which (i) no Specified ABL Default is continuing and (ii) Excess Availability has been equal to or greater than the greater of (x) 10.0% of the Line Cap (without giving effect to any increase thereof during an Agent Advance Period) as then in effect and (y) $25.0 million, for a period of thirty (30) consecutive days.

EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.

 

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EEA Resolution Authority”: any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

Eligible Assignee”: (i) any Lender, any Affiliate of a Lender and any Approved Fund, and (ii) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans in the ordinary course; provided, that “Eligible Assignee” shall not include (w) any Disqualified Lender, (x) any Lender that is, as of the date of the applicable assignment, a Defaulting Lender, (y) any natural person or (z) the Sponsor, Holdings, any Borrower, any Affiliate of any of the foregoing or any of their respective Subsidiaries.

Eligible Cash”: cash and Cash Equivalents of a Qualified Loan Party held in a deposit account or securities account maintained with (i) the Collateral Agent or (ii) another financial institution in which the Administrative Agent, for the benefit of the Secured Parties, has a first priority perfected security interest pursuant to a control agreement reasonably satisfactory to the Administrative Agent, subject only to First Priority Priming Liens; provided that in the case of a deposit account or securities account maintained with another financial institution pursuant to clause (ii) above, such account shall be subject to daily balance reporting to or online viewing access for the Agents.

Eligible Credit Card Accounts”: all of the Credit Card Accounts (other than any Permitted Receivables Financing Assets) owned by any Qualified Loan Party that arise in the ordinary course of business from the sale of goods or rendition of services, except Credit Card Accounts as to which any of the exclusionary criteria set forth below applies. Eligible Credit Card Accounts shall not include any Accounts of a Qualified Loan Party that:

(a) have been outstanding for more than five (5) Business Days from the date of sale;

(b) with respect to which a Qualified Loan Party does not have good, valid and marketable title thereto, free and clear of any Lien (other than Permitted Liens);

(c) are not subject to a first priority perfected security interest in favor of the Administrative Agent for its own benefit and the benefit of the other Secured Parties (other than any First Priority Priming Liens);

(d) are disputed, or with respect to which a claim, counterclaim, offset or chargeback has been asserted, by the related credit card or debit card processor (but only to the extent of such dispute, counterclaim, offset or chargeback);

(e) as to which the Credit Card Processor has the right under certain circumstances to require a Qualified Loan Party to repurchase such Accounts from such Credit Card Processor;

(f) due from Credit Card Processors (other than Visa, Mastercard, American Express, Diners Club and Discover) which the Collateral Agent determines, in its Permitted Discretion, to be unlikely to be collected; or

(g) due from Credit Card Processors which are not organized in or do not have their principal offices in the United States or Canada.

 

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Eligible Inventory”: all of the Inventory owned by any Qualified Loan Party, except any Inventory as to which any of the exclusionary criteria set forth below applies. Eligible Inventory shall not include any Inventory of a Qualified Loan Party that:

(a) consists of work-in-process;

(b) is obsolete, unsalable, shopworn, damaged or unfit for sale;

(c) is not of a type held for sale by the applicable Qualified Loan Party in the ordinary course of business as is being conducted by each such Qualified Loan Party;

(d) is not subject to a first priority perfected Lien in favor of the Administrative Agent on behalf of the Secured Parties, subject only to First Priority Priming Liens;

(e) is not owned by a Qualified Loan Party free and clear of all Liens other than Permitted Liens;

(f) is placed on consignment unless Eligible Reserves have been established with respect thereto;

(g) except as provided in clause (r) below, is covered by a negotiable document of title, unless, at either Agent’s request, such document has been delivered to the Administrative Agent or an agent thereof and the amount of any shipping fees, costs and expenses are reflected in Reserves;

(h) consists of goods that are slow moving (to the extent not included in determining Net Orderly Liquidation Value) or constitute spare parts (not intended for sale), packaging and shipping materials, promotional products (not intended for sale), or supplies used or consumed in a Qualified Loan Party business;

(i) is manufactured, assembled or otherwise produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provisions contained in Title 25 U.S.C. 215(a)(i);

(j) is not covered by property or casualty insurance required by the terms of this Agreement (except to the extent of any deductible thereunder);

(k) consists of goods which have been returned or rejected by the buyer and are not in salable condition;

(l) is Inventory with respect to which the representations or warranties pertaining to such Inventory set forth in any Loan Document are untrue in any material respect;

(m) does not conform in all material respects to all standards imposed by any governmental agency, division or department thereof which has regulatory authority over such goods or the use or sale thereof;

(n) is Commingled Inventory;

(o) except as provided in clause (r) below, is located in a jurisdiction (i) other than the United States or Canada unless such Inventory is owned by a Qualified Loan Party and supported by an irrevocable letter of credit payable in an Approved Currency issued by a

 

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financial institution reasonably acceptable to the Administrative Agent and such irrevocable letter of credit is delivered to the Administrative Agent (including any delivery of an electronic letter of credit), or (ii) containing Inventory with an aggregate value of less than $100,000;

(p) is subject to a license agreement or other arrangement with a third party which, in the Administrative Agent’s Permitted Discretion, restricts the ability of the Administrative Agent to exercise its rights under the Loan Documents with respect to such Inventory unless such third party has entered into an agreement in form and substance reasonably satisfactory to the Administrative Agent permitting the Administrative Agent to exercise its rights with respect to such Inventory or the Administrative Agent has otherwise agreed to allow such Inventory to be eligible in its Permitted Discretion;

(q) consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available;

(r) (i) is not located on premises owned, leased or rented by a Qualified Loan Party unless such Inventory is stored with a bailee or warehouseman and either (x) a reasonably satisfactory and acknowledged bailee or warehouseman letter has been received by the Collateral Agent or (y) Eligible Reserves reasonably satisfactory to the Collateral Agent have been established with respect thereto, (ii) is located on leased or rented premises unless either (x) a Collateral Access Agreement has been delivered to the Collateral Agent or (y) Rent Reserves have been established with respect thereto, provided that this clause (ii) shall not apply unless Rent Reserves are permitted to be imposed upon Inventory at the relevant location pursuant to the terms of the definition of such term, or (iii) is located at an owned location subject to a mortgage in favor of a creditor other than the Administrative Agent or the Senior Secured Notes Trustee unless either (x) a Collateral Access Agreement has been delivered to the Collateral Agent or (y) Eligible Reserves reasonably satisfactory to the Collateral Agent have been established with respect thereto; provided that in the event any Inventory that would be ineligible under this clause (r) because subclause (x) of any of clauses (i), (ii) or (iii) is not satisfied, the Collateral Agent may not unreasonably refuse to impose the Reserves referred to in subclause (y) of such clause to cause such ineligibility; provided further that any such Inventory that is (a) in transit (i) within the United States or Canada and between locations owned, leased or rented by one or more Qualified Loan Parties, or (ii) outside of the United States or Canada and in transit to locations owned, leased or rented by one or more Qualified Loan Parties and (x) supported by an irrevocable letter of credit payable in an Approved Currency issued by a financial institution reasonably acceptable to the Collateral Agent and such irrevocable letter of credit is delivered to the Collateral Agent (including any delivery of an electronic letter of credit), or (y) subject to a negotiable bill of lading or title document reasonably satisfactory to the Collateral Agent and being handled by a customs broker, freight-forwarder or other handler that has delivered a lien waiver reasonably acceptable to the Collateral Agent, and (b) would otherwise constitute Eligible Inventory (without regard to clause (g) or (o) of the definition thereof) shall constitute Eligible Inventory (provided that the maximum aggregate amount of such Eligible Inventory in transit included in the Aggregate Borrowing Base shall not exceed $30,000,000).

(s) subject to the Acquired Asset Borrowing Base, is acquired in a Permitted Acquisition unless and until the Collateral Agent has completed or received an appraisal of such Inventory and established Reserves (if applicable) therefor in its Permitted Discretion; or

(t) is Inventory for which any contract relating to such Inventory expressly includes retention of title in favor of the vendor or supplier thereof or a conditional sale; provided that such Inventory shall not be excluded from Eligible Inventory solely pursuant to this clause (t) to

 

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the extent that either (i) such retention of title or conditional sale is not effective under applicable Law to give such vendor or supplier ownership of such Inventory or a Lien, in each case prior in right to the Lien of the Administrative Agent therein, or (ii) (A) the Collateral Agent shall have received evidence reasonably satisfactory to it that the full purchase price of such Inventory has, or will have, been paid prior to or upon the delivery of such Inventory to the relevant Qualified Loan Party, or (B) Eligible Reserves reasonably satisfactory to the Collateral Agent have been established with respect thereto (which Reserves the Collateral Agent may not unreasonably refuse to establish if subclauses (i) and (ii)(A) do not apply).

Subject to the limitations in the definition of “Eligible Reserves,” the Collateral Agent shall have the right, upon at least five (5) Business Days’ prior written notice to the Borrowers (which notice shall include a reasonably detailed description of such Reserve being established, modified or eliminated), to establish, modify or eliminate Reserves against Eligible Inventory from time to time in its Permitted Discretion, except that any such Reserves shall not be duplicative of adjustments of the amount of Eligible Inventory pursuant to the other provisions of this definition. During such notice period, the Collateral Agent shall, if requested, discuss any such Reserve or change with the Borrowers and the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Reserve or change no longer exists or exists in a manner that would result in the establishment of a lower Reserve or result in a lesser change, in each case, in a manner and to the extent reasonably satisfactory to the Collateral Agent.

Eligible Reserves”: Reserves against the Canadian Borrowing Base or the US Borrowing Base established or modified in the Permitted Discretion of the Collateral Agent subject to the following: (i) the amount of any Eligible Reserves shall have a reasonable relationship to the event, condition or other matter that is the basis for the establishment of such Reserve or such modification thereto, (ii) except as otherwise expressly provided in the definition of Eligible Trade Account, Eligible Credit Card Account or Eligible Inventory, no Reserves shall be established or modified to the extent they are duplicative of Reserves or modifications already accounted for through eligibility or other criteria (including collection/advance rates), (iii) any rent reserves will be subject to the limitations set forth in the definition of “Rent Reserves,” and (iv) no Reserves will be imposed relating to obligations under any Specified Hedge Agreement without the written consent of the Borrowers (it being understood and agreed that all such obligations in respect of Specified Hedge Agreements will be at least one step junior in the waterfall priority in respect of principal obligations under this Agreement pursuant to Section 6.4 of the Guarantee and Collateral Agreement).

Eligible Trade Accounts”: all of the Accounts (other than any Credit Card Accounts and any Permitted Receivables Financing Assets) owned by any Qualified Loan Party, except any Accounts as to which any of the exclusionary criteria set forth below applies. Eligible Trade Accounts shall not include any Account of a Qualified Loan Party that:

(a) does not arise from the sale of goods or the performance of services by a Qualified Loan Party in the ordinary course of its business;

(b) (i) upon which any Qualified Loan Party’s right to receive payment is not absolute (other than as a result of rights to return inventory in the ordinary course of business of such Qualified Loan Party) or is contingent upon the fulfillment of any condition whatsoever or (ii) as to which any Qualified Loan Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to any Qualified Loan Party’s completion of further performance under such contract;

 

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(c) to the extent any Account Debtor has or has asserted a right of setoff, or has asserted a defense, counterclaim or dispute as to such Account;

(d) is not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;

(e) with respect to which an invoice has not been sent to the applicable Account Debtor;

(f) is not owned by any Qualified Loan Party;

(g) is the obligation of an Account Debtor that is a government or governmental agency but only with respect to such Accounts described in this clause (g) in an aggregate amount at any time in excess of $2.0 million, unless, in each case, the applicable Qualified Loan Party has complied (and delivered to the Collateral Agent evidence of such compliance) with respect to such obligation with the Federal Assignment of Claims Act of 1940, the Financial Administration Act (Canada) and any similar applicable foreign, state, province, territory, county or municipal law restricting the assignment thereof or the granting of a Lien thereon with respect to such obligation;

(h) is the obligation of an Account Debtor (including any government or governmental agency) located in a jurisdiction other than the United States or Canada (or any other jurisdiction approved by the Required Lenders in their reasonable discretion) unless payment thereof is assured by an irrevocable letter of credit payable in an Approved Currency issued by a financial institution reasonably acceptable to the Administrative Agent and such irrevocable letter of credit is delivered to the Administrative Agent (including any delivery of an electronic letter of credit);

(i) to the extent any Qualified Loan Party is liable for goods sold or services rendered by the applicable Account Debtor to the applicable Qualified Loan Party, but only to the extent of the potential offset;

(j) arises with respect to goods that are delivered on a bill-and-hold, cash-on delivery basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional, other than rights to return inventory in the ordinary course of business;

(k) is not paid within the earlier of sixty (60) days following its due date or ninety (90) days following its original invoice date or which has been written off the books of such Qualified Loan Party or otherwise designated as uncollectible by such Qualified Loan Party;

(l) is an Account in respect of which the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due;

(m) a Bankruptcy Event occurs with respect to the Account Debtor obligated upon such account; provided that so long as post-petition financing is being provided to such Account Debtor, post-petition accounts of such Account Debtor may be deemed Eligible Trade Accounts by and to the extent approved by the Collateral Agent, in its Permitted Discretion, on a case-by-case basis;

 

27


(n) is an Account as to which the Administrative Agent’s Lien thereon, on behalf of itself and the Secured Parties, is not a first priority perfected lien subject only to First Priority Priming Liens;

(o) is an Account with respect to which the representations or warranties pertaining to such Accounts set forth in any Loan Document are untrue in any material respect;

(p) is payable in any currency other than Approved Currency;

(q) is not owned by a Qualified Loan Party free and clear of all Liens other than Permitted Liens;

(r) is the obligation of an Account Debtor if 50% or more of the dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria listed in clause (k) of this definition;

(s) is evidenced by a judgment, instrument, note or chattel paper;

(t) is an Account to the extent that such Account, together with all other Accounts owing by such Account Debtor as of any date of determination exceed 20% of all Eligible Trade Accounts of the Qualified Loan Parties but only to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however that the amount of Eligible Trade Accounts that are excluded because they exceed the foregoing percentage shall be determined based on all of the otherwise Eligible Trade Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit;

(u) is an Account as to which any check, draft or other items of payment has previously been received which has been returned unpaid or otherwise dishonored;

(v) consists of finance charges as compared to obligations to such Qualified Loan Party for goods sold;

(w) is an Account with respect to which the Account Debtor is (i) subject to any US or Canadian sanctions administered by OFAC, Canadian Anti-Money Laundering Laws or any similar applicable law or (ii) a person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC or which is a designated person under Canadian Anti-Money Laundering Laws or any similar applicable Law;

(x) is an Account arising out of a sale made or services rendered by any Qualified Loan Party to an Affiliate of any Qualified Loan Party or to a Person controlled by an Affiliate of any Qualified Loan Party (including any employees, officers, directors or stockholders of such); provided that Accounts of other portfolio companies (other than a Loan Party) of the Permitted Investors shall not be excluded by this clause (x);

(y) is an Account that was not paid in full, and a Qualified Loan Party created a new receivable for the unpaid portion of the Account; and

(z) is an Account representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling a Qualified Loan Party to discounts on future purchase therefrom.

 

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Subject to the limitations in the definition of “Eligible Reserves,” the Collateral Agent shall have the right, upon at least five (5) Business Days’ prior written notice to the Borrowers (which notice shall include a reasonably detailed description of such Reserve being established, modified or eliminated), to establish, modify or eliminate Reserves against Eligible Trade Accounts from time to time in its Permitted Discretion, except that any such Reserves shall not be duplicative of adjustments of the amount of Eligible Trade Accounts pursuant to the other provisions of this definition. During such notice period, the Collateral Agent shall, if requested, discuss any such Reserve or change with the Borrowers and the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Reserve or change no longer exists or exists in a manner that would result in the establishment of a lower Reserve or result in a lesser change, in each case, in a manner and to the extent reasonably satisfactory to the Collateral Agent.

Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, enforceable guidelines, policies, codes, decrees, or other legally enforceable requirements of any federal, state, provincial, territorial, local, municipal or other Governmental Authority, regulating, relating to or imposing liability associated with or standards of conduct for the protection of the environment or of human health, insofar as it relates to exposure to Hazardous Materials, including those relating to employee health and safety.

Environmental Liability”: any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation or compliance with orders and directives, fines, penalties or indemnities), resulting from or based upon (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) human exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Permits”: any and all permits, licenses, approvals, registrations, and other authorizations of a Governmental Authority required under any Environmental Law.

Equity Contribution”: collectively, the cash contributions to be made on or reasonably prior to the Closing Date (a) by the Sponsor to Holdings as cash common equity and/or preferred equity (in the case of preferred equity, having terms that are reasonably acceptable to the Administrative Agent) by way of subscription for shares in Holdings, and (b) by Holdings to the Initial Borrower as cash common equity by way of subscription for shares in the Initial Borrower.

ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time, the regulations promulgated thereunder and any successor thereto.

ERISA Event”: as defined in Section 3.11.

EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

Eurodollar”: when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to (i) for any Loan or Borrowing denominated in US Dollars, the Adjusted LIBO Rate or, (ii) for any Loan or Borrowing denominated in Canadian Dollars, the CDOR Rate.

Event of Default”: any of the events specified in Section 7; provided, that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

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Excess Availability”: as of any date of determination, the amount by which (a) the Line Cap (without giving effect to any increase thereof during an Agent Advance Period) at such time exceeds (b) the Total Revolving Credit Exposure at such time.

Exchange Act”: the Securities Exchange Act of 1934.

Exchange Rate”: on any day, and subject to Section 1.8, with respect to any currency (the “Initial Currency”), the rate at which such currency may be exchanged into another currency (the “Exchange Currency”), as set forth at approximately 11:00 a.m. (New York City time) on such day on the Reuters World Currency Page for the Initial Currency; in the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Administrative Agent (in consultation with Holdings and the Borrowers), or, in the absence of such available service, such Exchange Rate shall instead be the arithmetic average of the exchange rates of the Administrative Agent in the market where its foreign currency exchange operations in respect of the Initial Currency are then being conducted, at or about 10:00 a.m. (New York City time) on such date for the purchase of the Exchange Currency for delivery two Business Days later; provided, that if at the time of any such determination, no such exchange rate can reasonably be quoted, the Administrative Agent may use any reasonable method as it deems applicable to determine such rate, and such determination shall be conclusive absent manifest error.

Excluded Assets”: the collective reference to:

(1) any fee interest in real property (x) located outside of the United States or Canada or (y) if the fair market value of such fee interest (together with improvements, other than personal property), as determined in good faith by the Initial Borrower on the Closing Date, or, if subsequently acquired, by the date of acquisition thereof, is less than $5.0 million;

(2) any leasehold interests in real property (with no requirement to deliver landlord lien waivers, estoppels, bailee letters or collateral access letters);

(3) motor vehicles and other assets subject to certificates of title (other than the proceeds thereof), Letter of Credit Rights (other than to the extent such rights can be perfected by filing a UCC-1 financing statement, PPSA financing statement or by a similar filing in any jurisdiction in the United States or Canada) and any Commercial Tort Claim with a value not exceeding $1,000,000;

(4) “margin stock” (within the meaning of Regulation U);

(5) any asset if the granting of a security interest or pledge in such asset under the Security Documents would be prohibited by any law, rule or regulation or agreements with any Governmental Authority or would require the consent, approval, license or authorization of any Governmental Authority unless such consent, approval, license or authorization has been received (except to the extent such prohibition or restriction is ineffective under the UCC or any similar applicable law in any relevant jurisdiction and other than proceeds thereof, to the extent the assignment of such proceeds is effective under the UCC, PPSA or any similar applicable law in any relevant jurisdiction notwithstanding any such prohibition or restriction);

(6) equity interests in any entities other than Wholly Owned Subsidiaries to the extent not permitted by the terms of such entity’s Organizational Documents or joint venture documents;

 

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(7) any property of a Group Member pledged or deposited to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, insurance, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, to the extent the terms of such documents (or the applicable statute) prohibit the Liens granted under the Security Documents (it being understood and agreed that such property will cease to be excluded, and will become subject to the Liens under the Security Documents, immediately and automatically at such time as such prohibitions cease to exist);

(8) with respect to the US Borrower Obligations, assets to the extent a security interest in such assets could result in an investment in ‘‘United States property’’ by a CFC (or any similar law or regulation in any applicable jurisdiction) or otherwise result in material adverse tax consequences to Holdings or one of its subsidiaries, as reasonably determined in good faith by the Initial Borrower (in consultation with the Administrative Agent), it being understood that no more than 65% of the outstanding voting equity interests and 100% of the outstanding non-voting equity interests of any Collateral Foreign Subsidiary shall be included in the Collateral;

(9) Exempt Accounts;

(10) (i) any lease, license or other agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein under the Loan Documents would violate or invalidate such lease, license or agreement, purchase money or similar arrangement or create a right of termination in favor of any other party thereto (other than a Loan Party) after giving effect to the applicable anti-assignment provisions of the UCC, PPSA or other similar law, other than proceeds and products thereof, to the extent the assignment of which is expressly deemed effective under the UCC, PPSA and any similar law in any relevant jurisdiction notwithstanding any such restriction;

(11) assets in circumstances where the Administrative Agent and the Initial Borrower reasonably agree in writing that the cost of obtaining or perfecting a security interest under the Loan Documents in such assets is excessive in relation to the benefit to the Lenders of the security to be afforded thereby;

(12) any United States intent-to-use trademark applications or intent-to-use service mark applications prior to the filing of a “statement of use” or an “amendment to allege use” with respect thereto, to the extent and for so long as the grant of a security interest therein would impair the validity or enforceability of, or render void or voidable or result in the cancellation of, the Issuers’ or a Guarantor’s right, title or interest therein or any trademark or service mark issued as a result of such application under applicable Federal law;

(13) Property of any Excluded Subsidiary (other than any Discretionary Guarantor) and any Property of any Person that is not a Subsidiary which, if a Subsidiary would constitute an Excluded Subsidiary;

(14) Permitted Receivables Financing Assets sold, conveyed or otherwise transferred to a Permitted Receivables Financing Subsidiary or otherwise pledged in connection with any Permitted Receivables Financing;

(15) Capital Stock in Immaterial Subsidiaries (or any person that is not a Subsidiary which, if a Subsidiary would constitute an Immaterial Subsidiary), captive insurance Subsidiaries, not-for-profit Subsidiaries, special purpose entities in connection with Permitted Receivables Financings and Unrestricted Subsidiaries;

 

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(16) intercompany loans, indebtedness or receivables owed by any CFC or any other Collateral Foreign Subsidiary referred to in clause (8) above;

(17) intellectual property requiring filing in a jurisdiction outside of the United States or Canada; and

(18) any margin or collateral posted by any Group Member or any counterparty to a Hedge Agreement with respect to such Hedge Agreement as a result of any regulatory requirement, swap clearing organizational rule, or other similar regulation, rule, or requirement;

except, in each case, to the extent any such asset in the foregoing clauses (1) through (18) is pledged in respect of obligations under the Senior Secured Notes Documents or Senior Secured Bridge Documents as applicable; provided, that assets described above that were deemed “Excluded Assets” as a result of a prohibition or restriction described above shall no longer be “Excluded Assets” upon termination of the applicable prohibition or restriction that caused such assets to be treated as “Excluded Assets”.

Excluded Contributions”: the net cash proceeds received by Holdings from (a) capital contributions to its common Capital Stock (other than proceeds from capital contributions constituting a Cure Amount) or (b) the sale (other than to a Subsidiary) of Capital Stock of Holdings (other than proceeds from the issuance of Disqualified Capital Stock or of any Cure Amount) which proceeds are in turn contributed to the Initial Borrower as common Capital Stock (or used to purchase Capital Stock of the Initial Borrower (other than Disqualified Capital Stock)), calculated as of any date of determination less the aggregate amount of Excluded Contributions applied prior to such date of determination as an addback to Consolidated EBITDA pursuant to clause (1)(i) of the definition thereof, a Restricted Payment under Section 6.6(m), an Investment under Section 6.7(dd) or a Specified Prepayment under Section 6.8; provided such net cash proceeds are applied within one year of receipt thereof by Holdings for one of the foregoing purposes.

Excluded Subsidiary”: (a) any Immaterial Subsidiary (subject, for the avoidance of doubt, to the proviso in the definition thereof), (b) any Unrestricted Subsidiary, (c) any Subsidiary to the extent such Subsidiary’s guaranteeing any of the Obligations or otherwise becoming a Loan Party is prohibited or restricted by any Requirement of Law or requires the consent, approval, license or authorization of any Governmental Authority (unless such consent, approval, license or authorization has been received), or is prohibited by any Contractual Obligation existing on (but not arising in contemplation of or in connection with) the Closing Date (or, if later, the date such Subsidiary is acquired or formed so long as such Contractual Obligation did not arise in contemplation of or in connection with such acquisition or formation), (d) with respect to the guarantee of any US Borrower Obligations, any direct or indirect subsidiary of Holdings that is a Specified Foreign Subsidiary, and any direct or indirect subsidiary of Holdings substantially all the assets of which constitute equity interests in or debt of Specified Foreign Subsidiaries, (e) with respect to any Subsidiary other than a Domestic Subsidiary, any such Subsidiary (A) that does not have the legal capacity to provide a guarantee (whether as a result of financial assistance, corporate benefit, thin capitalization, capital maintenance, liquidity maintenance or similar legal principles) and/or (B) for which the provision of a guarantee would conflict with the fiduciary duties of such person’s directors or result in a material risk of personal or criminal liability for such person or any of its officers of directors, (f) with respect to the guarantee of any US Borrower Obligations, any Subsidiary whose provision of a guarantee would constitute an investment in “United States property” by a CFC with respect to which any US Borrower is a “United States shareholder” within the meaning of section 956 of the Code (or any similar law or regulation in any applicable jurisdiction) or otherwise result in an adverse tax consequence to Holdings or one of its Subsidiaries, as reasonably determined by the Initial Borrower (in consultation with the Agent), (e) any Subsidiary in circumstances where the Initial Borrower and the Administrative Agent reasonably agree that any of the cost of providing a guarantee of the Revolving Credit Facility is excessive in relation to the value afforded thereby, (f) any Subsidiary that

 

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is not a Wholly Owned Subsidiary, (g) any not-for-profit Subsidiaries, (h) captive insurance Subsidiaries and (i) Permitted Receivables Financing Subsidiaries; provided, that any Subsidiary described above shall be deemed not to be an Excluded Subsidiary during any period when such Subsidiary is a Discretionary Guarantor (other than for purposes of determining whether such Subsidiary is required to remain as a Subsidiary Guarantor pursuant to the terms of this Agreement).

Excluded Swap Obligation”: with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

Excluded Taxes”: any of the following Taxes imposed on or with respect to the Administrative Agent, any Lender or any Issuing Bank or required to be withheld or deducted from any payment to any such recipient (a) Taxes imposed on (or measured by) net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender or Issuing Bank, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, US Federal withholding Taxes that are imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the applicable Borrower under Section 2.18(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.16, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such recipient’s failure to comply with Section 2.16(e), (d) any US Federal withholding Taxes imposed under FATCA, (e) Canadian withholding Taxes imposed (i) by reason of such recipient not dealing at arm’s length with the relevant Loan Parties at the time of such payment or (ii) on such recipient by reason of such recipient (A) being a “specified shareholder” (as defined in subsection 18(5) of the Income Tax Act (Canada)) of the relevant Loan Parties, or (B) not dealing at arm’s length with a “specified shareholder” (as defined in subsection 18(5) of the Income Tax Act (Canada)) of the relevant Loan Parties (other than where the non-arm’s length relationship arises, or where the recipient is a “specified shareholder” or does not deal at arm’s length with a “specified shareholder”. in connection with or as a result of the recipient having become party to, received or perfected a security interest under or received or enforced any rights under a Loan Document).

Exempt Accounts”: deposit accounts, securities accounts or other similar accounts (i) for the sole purpose of funding payroll obligations, employee benefit or health benefit obligations, tax obligations, escrow arrangements or holding funds owned by persons other than a Loan Party, (ii) that are zero-balance accounts, (iii) that are accounts in jurisdictions other than (A) the jurisdiction of organization of the applicable granting Loan Party, (B) the United States or any state thereof or (C) Canada or any province or territory thereof, (iv) only containing cash proceeds of Notes Priority Collateral (as defined in the Intercreditor Agreement), (v) that are accounts held by any Non-Loan Party Subsidiary, and (vi) that are accounts other than those described in clauses (i) through (v) and are

 

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accounts held by Loan Parties with respect to which the average daily balance of the funds maintained on deposit therein for the three month period ending on the date of determination does not exceed, individually, $1,500,000; provided that if on the last day of any calendar month the average daily balance of funds for the calendar month then ended on deposit in all deposit accounts or securities accounts that are Exempt Accounts pursuant to this clause (vi) at that time exceeds $3,000,000, the Initial Borrower shall select which of such accounts shall cease to be Exempt Accounts and take all steps necessary to comply with Sections 2.21 and 5.9 in respect thereof, in each case within 30 days after the end of such calendar month (subject, for the avoidance of doubt, to Section 5.9(d)).

Existing ABL Credit Agreement”: the ABL Credit Agreement dated as of October 9, 2015 by and among Holdings, the Initial Borrower, the Additional Borrowers party thereto, the lenders party thereto and Royal Bank of Canada, as administrative agent, as amended and in effect immediately prior to the Closing Date.

Existing Debt”: all existing Indebtedness for borrowed money of the Group Members, including the Targets and their Subsidiaries, if any, outstanding as of the Closing Date other than (a) Surviving Debt, (b) Indebtedness under the Revolving Credit Facility, and (c) Indebtedness in respect of the Senior Secured Notes or any Senior Secured Bridge Debt.

Extended Revolving Credit Commitment”: as defined in Section 2.22(a)(i).

Extending Revolving Credit Lender”: as defined in Section 2.22(a)(i).

Extension”: as defined in Section 2.22(a).

Extension Amendment”: as defined in Section 2.22(c).

Extension Offer”: as defined in Section 2.22(a).

Facility”: as defined in the definition of Revolving Credit Facility.

Facility Fee”: fees payable on the undrawn portion of the Revolving Credit Commitments pursuant to Section 2.10(a).

Facility Fee Rate”: with respect to any fiscal quarter, the rate per annum on the undrawn portion of the Revolving Credit Commitments (excluding any Commitments of Defaulting Lenders, except to the extent such Commitments are reallocated to Lenders that are not Defaulting Lenders) determined pursuant to the table below:

 

Level

  

Historical Average Utilization:

   Facility Fee Rate:  

I

   Less than 50.0%      0.375

II

   Greater than or equal to 50.0%      0.250

The Facility Fee Rate shall be determined from the grid above based on the Historical Average Utilization as of the last Business Day of each fiscal quarter of the Initial Borrower commencing with the fiscal quarter ending December 31, 2016. Notwithstanding anything to the contrary contained above in this definition, (i) the Facility Fee Rate shall be maintained at Level I above at all times during which there shall exist any Event of Default, (ii) at all times prior to the end of the fiscal quarter of the Initial Borrower during which the Closing Date occurs, the Facility Fee Rate shall be maintained at Level I above, (iii) from and after the most recent Incremental Facility Closing Date for any Incremental Facility

 

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Amendment pursuant to which the Facility Fee Rate has been increased above the Facility Fee Rate in effect immediately prior to such Incremental Facility Closing Date, the Facility Fee Rate shall be increased to those respective percentages per annum set forth in the applicable Incremental Facility Amendment and (iv) from and after any Extension, with respect to any Extended Revolving Credit Commitments, the Facility Fee Rate specified for such Extended Revolving Credit Commitments shall be those specified in the applicable Extension Amendment.

FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any intergovernmental agreements with respect thereto, any law, regulations, or other official guidance enacted in a non-US jurisdiction pursuant to an intergovernmental agreement with respect thereto, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any law, regulation, or other published administrative guidance implementing an intergovernmental agreement entered into in connection with the implementation of such section of the Code.

FCPA”: United States Foreign Corrupt Practices Act of 1977.

Federal Funds Effective Rate”: for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1.00%) 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 1.00%) 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; provided that in no event shall the Federal Funds Effective Rate be less than 0.00%.

Fee Letter”: the Fee Letter, dated as of July 4, 2016, by and between Holdings and the Commitment Parties.

Financial Covenant”: the covenant set forth in Section 6.1.

First Lien Leverage Ratio”: as of any date of determination, the ratio of (a) (i) Consolidated First Lien Debt on such day less (ii) the aggregate amount of Unrestricted Cash of the Initial Borrower and the Restricted Subsidiaries on such day to (b) Consolidated EBITDA of the Initial Borrower and the Restricted Subsidiaries for the Relevant Reference Period.

First Priority Priming Liens”: (i) any Permitted Liens applicable to such Collateral (other than any Liens securing the Senior Secured Notes or any Senior Secured Bridge Debt or any Refinancing Indebtedness with respect thereto) which as a matter of law have priority over the respective Liens on such Collateral created in favor of the Administrative Agent for the benefit of the Secured Parties pursuant to the relevant Security Document and (ii) without limitation of clause (i), any Lien on Collateral located on premises subject to a lease or held in a warehouse and in which the landlord or warehouseman thereunder has a first priority perfected security interest in such Collateral.

Fixed Amounts”: as defined in Section 1.6(b).

Foreign Currency”: an official national currency (including the Euro) of any nation other than the United States and which constitutes freely-transferable and lawful money under the laws of the country or countries of issuance.

 

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Foreign Lender”: any Lender or Issuing Bank that is not a US Person.

Foreign Loan Party”: any Loan Party that is not a US Loan Party.

Foreign Subsidiary”: any Restricted Subsidiary of Holdings that is not a Domestic Subsidiary.

GAAP”: generally accepted accounting principles in the United States as in effect from time to time; provided, however, that if the Initial Borrower notifies the Administrative Agent that the Initial Borrower requests an amendment to any provision hereof in respect of an Accounting Change (including through the adoption of IFRS) or if the Administrative Agent notifies the Initial Borrower that the Required Lenders request an amendment to any provision hereof for such purpose, GAAP shall be interpreted in accordance with Section 1.4 until such notice shall have been withdrawn or such provision amended in accordance with Section 1.4.

Governmental Authority”: any nation or government, any state, province, territory, municipal or other political subdivision thereof and any other agency, authority, instrumentality, regulatory body, court, tribunal, central bank or other entity, officer, inspector, investigator or examiner exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Group Member”: any of Holdings, any Borrower or any of the Restricted Subsidiaries of Holdings.

Guarantee Obligation”: with respect to any Person (the “guaranteeing person”), any obligation of the guaranteeing person guaranteeing or having the economic effect of guaranteeing any Indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security for such primary obligation, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, in each case, so as to enable the primary obligor to pay such primary obligation, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business or customary indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or Disposition permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation (or portion thereof) in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Initial Borrower in good faith.

Guarantors”: the collective reference to Holdings, any Intermediate Parent, the Borrowers (other than with respect to a Borrower’s own Obligations) and the Subsidiary Guarantors.

 

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Hazardous Materials”: (i) petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and explosive or radioactive substances or (ii) any chemical, material, waste, substance or pollutant that is proscribed, listed, prohibited, limited or regulated as toxic, hazardous, or as otherwise deleterious to human health and the environment pursuant to any Law.

Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity contracts or similar arrangements (which, for the avoidance of doubt, shall include any master agreement that governs the terms of one or more interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity contracts or similar arrangements) entered into by any Group Member providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

Historical Average Utilization”: for the purposes of the definition of Facility Fee Rate, in the case of any fiscal quarter (or the period from the Closing Date to the end of the fiscal quarter during which it occurs (the “Stub Period”)), an amount equal to (x) the sum of each day’s utilization of the Total Revolving Credit Commitments, as determined by the amount of the Total Revolving Credit Exposure at such time, during such fiscal quarter (or Stub Period) divided by (y) the number of days in such fiscal quarter (or Stub Period), expressed as a percentage of the Total Revolving Credit Commitments.

Historical Excess Availability”: for the purposes of the definition of Applicable Margin, in the case of each Adjustment Date, an amount equal to (x) the sum of each day’s Excess Availability during the most recently ended fiscal quarter divided by (y) the number of days in such fiscal quarter.

Holdings”: as defined in the preamble hereto.

Hudson Advisors”: Hudson Americas L.P. and its Affiliates.

IFRS”: International Financial Reporting Standards.

Immaterial Subsidiary”: a Subsidiary (other than any Borrower) (a) the Consolidated Total Assets of which equal 2.50% or less of the Consolidated Total Assets of Holdings and its Restricted Subsidiaries as of the end of Holdings’ most recently ended fiscal quarter for which financial statements have been delivered and (b) the gross revenues of which for the most recently ended four full fiscal quarters for which financial statements have been delivered constitute 2.50% or less of the total gross revenues of Holdings and its Subsidiaries, on a consolidated basis, for such period; provided, that if at any time the aggregate amount of Consolidated Total Assets as of the end of Holdings’ most recently ended fiscal quarter for which financial statements have been delivered represented by all Immaterial Subsidiaries would, but for this proviso, exceed 5.00% of Consolidated Total Assets of Holdings and its Subsidiaries as of such date, or the total gross revenues represented by all Immaterial Subsidiaries would not, but for this proviso, exceed 5.00% of the total gross revenues of Holdings and its Subsidiaries, on a consolidated basis, in each case as of the end of Holdings’ most recently ended fiscal quarter, then Holdings shall designate sufficient Immaterial Subsidiaries to no longer constitute Immaterial Subsidiaries so as to eliminate such excess, and each such designated Subsidiary shall thereupon cease to be an Immaterial Subsidiary (or, if Holdings shall make no such designation by the next date of delivery of financial statements pursuant to Section 5.1(a) or 5.1(b), one or more of such Immaterial Subsidiaries selected in descending order based on their respective contributions to the Consolidated Total Assets of Holdings and its Subsidiaries shall cease to be considered to be Immaterial Subsidiaries until such excess is eliminated) and any such Subsidiary (if not otherwise an Excluded Subsidiary) shall be required to

 

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comply with Section 5.9(c) within the time periods set forth therein. For purposes of this definition, Consolidated Total Assets shall be calculated eliminating all intercompany items.

Incremental Facility”: as defined in Section 2.20(a).

Incremental Facility Amendment”: as defined in Section 2.20(c).

Incremental Facility Closing Date”: as defined in Section 2.20(c).

Incremental Revolving Commitments”: as defined in Section 2.20(a).

Incremental Revolving Lender”: as defined in Section 2.20(c).

Incurrence-Based Amounts”: as defined in Section 1.6(b).

Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or services (other than (i) trade accounts or similar obligations to a trade creditor and accrued expenses payable in the ordinary course of business, (ii) any earn-out obligation unless such obligation is not paid promptly after becoming due and payable and (iii) accruals for payroll or other employee compensation and other liabilities accrued in the ordinary course of business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), but limited to the lesser of the fair market value (as determined in good faith by Holdings) of such Property and the principal amount of such Indebtedness if recourse is solely to such Property, (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under bankers’ acceptances, letters of credit, surety bonds and similar instruments (except unsecured and unmatured reimbursement obligations in respect thereof obtained in the ordinary course of business to secure the performance of obligations that are not Indebtedness pursuant to another clause of this definition), (g) the liquidation value of all Disqualified Capital Stock of such Person, to the extent mandatorily redeemable in cash prior to the date that is the 91st day after the relevant Latest Maturity Date (as determined on the date of issuance thereof) (other than in connection with change of control events and asset sales and other Disposition and casualty events to the extent that the terms of such Capital Stock provide that such Person may not redeem any such Capital Stock in connection with such change of control event or asset sale or other Disposition or casualty event unless such redemption is subject to the prior payment in full of the Obligations), (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above of another Person secured by any Lien on Property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligations (but limited to the lesser of the fair market value of such Property and the principal amount of such obligations) and (j) solely for the purposes of Section 6.2 and Section 7.1(e), the net obligations of such Person in respect of Hedge Agreements.

Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise defined in clause (a), Other Taxes.

Indemnitee”: as defined in Section 9.3(b).

 

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Information”: as defined in Section 9.12(a).

Initial Borrower”: as defined in the preamble.

Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA; and the term “Insolvent” shall have a correlative meaning.

Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, state, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, service marks, technology, know-how and processes, recipes, formulas, trade secrets and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

Intercreditor Agreement”: the ABL Intercreditor Agreement dated as of the Closing Date and substantially in the form of Exhibit F hereto, among the Administrative Agent, the Senior Secured Notes Trustee, any Senior Secured Bridge Agent and any other Senior Representatives or other Persons from time to time party thereto, and acknowledged by Holdings, the Borrowers and the other Guarantors party thereto from time to time.

Interest Coverage Ratio”: the ratio of (a) Consolidated EBITDA of the Initial Borrower and the Restricted Subsidiaries for the Relevant Reference Period to (b) Consolidated Interest Expense of the Initial Borrower and the Restricted Subsidiaries for the Relevant Reference Period.

Interest Election Request”: a request by a Borrower to convert or continue a Borrowing in accordance with Section 2.6.

Interest Payment Date”: (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December commencing the first such date to occur after the Closing Date and the final maturity date of such Loan, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and the final maturity date of such Loan and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

Interest Period”: with respect to any Eurodollar 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 (or, if made available by all participating Lenders, twelve months) thereafter, as the applicable Borrower may elect; provided, that (i) 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 (ii) 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; provided, further, that the initial Interest Period with respect to any Eurodollar Borrowing on the Closing Date may be for such other period specified in the applicable Borrowing Request that is acceptable to the Administrative Agent. 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.

 

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Intermediate Parent”: any Person that is a Subsidiary of Holdings and of which the Initial Borrower is a Subsidiary.

Interpolated Screen Rate”: in relation to the LIBO Rate for any Loan, the rate which results from interpolating on a linear basis between: (a) the rate appearing on ICE Benchmark Administration page (or on any successor or substitute page of such service) for the longest period (for which that rate is available) which is less than the applicable Interest Period and (b) the rate appearing on the ICE Benchmark Administration page (or on any successor or substitute page of such service) for the shortest period (for which that rate is available) which exceeds the applicable Interest Period, each as of approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

Inventory”: “inventory” as such term is defined in Article 9 of the UCC or the PPSA, as applicable.

Investments”: as defined in Section 6.7.

IP Office”: each of the United States Patent and Trademark Office, the United States Copyright Office and the Canadian Intellectual Property Office.

IP Security Agreements”: the collective reference to each Intellectual Property Security Agreement required to be entered into and delivered pursuant to the terms of this Agreement and the Security Documents.

IPO”: the first underwritten public offering (other than a public offering pursuant to a registration statement on Form S-8) by a Permitted Holding Company of its Capital Stock after the Closing Date pursuant to a registration statement that has been declared effective by the SEC.

ISP Rules” the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any subsequent revision thereof adopted by the International Chamber of Commerce and in effect on the date a Letter of Credit is issued.

Issuing Bank”: as the context may require, (a) in the case of Letters of Credit denominated in US Dollars, Wells Fargo, and (B) in the case of Letters of Credit denominated in Canadian Dollars issued to any Canadian Borrower, Royal Bank, in each case, in its respective capacity as issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.4(i) and any other Lender reasonably acceptable to the Administrative Agent and the Initial Borrower, which has agreed to act as Issuing Bank hereunder. An 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 and for all purposes of the Loan Documents. References herein and in the other Loan Documents to Issuing Banks shall be deemed to refer to the Issuing Bank in respect of the applicable Letter of Credit or to all Issuing Banks, as the context requires.

ITA”: the Income Tax Act (Canada), as amended.

Junior Debt”: any Indebtedness of a Borrower Group Member that constitutes (i) Indebtedness subordinated in right of payment to the Obligations, (ii) unsecured Indebtedness incurred pursuant to Section 6.2(f) or (iii) Indebtedness secured by a Lien on the Collateral that is junior to the Liens securing the Obligations incurred pursuant to Section 6.2(g).

 

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Latest Maturity Date”: at any date of determination, the latest Maturity Date applicable to any Loan or Commitment hereunder at such time.

LC Disbursement”: a payment made by any Issuing Bank pursuant to a Letter of Credit.

LC Exposure”: at any time, the sum of (i) the aggregate undrawn amount of all outstanding Letters of Credit (including, without limitation, any and all Letters of Credit for which documents have been presented that have not been honored or dishonored) at such time plus (ii) the aggregate amount of all LC Disbursements in respect of Letters of Credit that have not yet been reimbursed by or on behalf of the applicable Borrower at such time. The LC Exposure of any Lender at any time shall be an amount equal to its Applicable Percentage of the total LC Exposure at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.13 or Rule 3.14 of the International Standby Practices (ISP98), such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

LC Sublimit”: $10.0 million, as such amount may be increased from time to time in accordance with Section 2.20 or Section 9.2(g).

Lender Parties”: as defined in Section 9.16.

Lenders”: the Persons listed on Schedule 2.1 and any other Person that shall have become a party hereto as a lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto as a lender pursuant to an Assignment and Assumption.

Letter of Credit”: any letter of credit issued pursuant to this Agreement.

Letter of Credit Applications”: as defined in Section 2.4(b).

Letter of Credit Indemnified Costs”: as defined in Section 2.4(m).

Letter of Credit Related Person”: as defined in Section 2.4(m).

LIBO Rate”: with respect to any Interest Period pertaining to a Eurodollar Loan or Borrowing, denominated in US Dollars the rate per annum determined by the Administrative Agent to be (a) the London Interbank Offered Rate (the rate per annum equal to the offered rate administered by ICE Benchmark Administration) for deposits in Eurodollar Loans denominated in US Dollars, in each case for a duration equal to or comparable to the duration of such Interest Period which appear on the relevant Reuters Monitor Money Rates Service page (being currently the page designated as “ICE LIBOR”) (or such other commercially available source providing quotations of the London Interbank Offered Rates for deposits in Dollars as may be designated by the Administrative Agent from time to time and as consented to by the Initial Borrower) at or about 11:00 A.M. (London time) two London Business Days before the first day of such Interest Period or (b) if the rates referenced in the preceding subsection (a) are not available, the rate per annum determined by the Administrative Agent as the rate of interest, expressed on a basis of 360 days at which deposits in US Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Loan being made, continued or converted by the Administrative Agent and with a term and amount comparable to such Interest Period and principal amount of such Eurodollar Loan or Borrowing as was offered by the Administrative Agent’s London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period.

 

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Lien”: any mortgage, pledge, hypothecation, security assignment, deposit arrangement, encumbrance, lien (statutory or other), trust, deemed trust, rights of revendication (statutory or otherwise), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing); provided, that in no event shall an operating lease in and of itself constitute a Lien.

Limited Conditionality Transaction”: as defined in Section 2.20(d).

Limited Conditionality Provision”: as defined in Section 4.1.

Line Cap”: at any time, the lesser of (i) 100% (or, during an Agent Advance Period, 110%) of the Aggregate Borrowing Base at such time and (ii) the Total Revolving Credit Commitments in effect at such time.

Loan”: any loan made by any Lender pursuant to this Agreement.

Loan Documents”: this Agreement, the Letter of Credit Applications, the Security Documents, any Notes, the Intercreditor Agreement, any Permitted Amendment, the Fee Letter and any other document executed and delivered in conjunction with this Agreement from time to time and designated as a “Loan Document”.

Loan Parties”: the collective reference to the Borrowers and the Guarantors.

Management Agreement”: the Asset Advisory Agreement effective as of August 10, 2015 by and between Hudson Americas L.P. and Holdings, as may be amended, restated, modified, supplemented or replaced in accordance with Section 6.15.

Mandatory Borrowing”: as defined in Section 2.1(d).

Material Adverse Effect”: a material adverse effect on (a) the business, financial condition, assets or results of operations, in each case, of the Group Members, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents or (c) the rights and remedies of the Agents and the Lenders, taken as a whole, under any Loan Document.

Material Debt”: Indebtedness (other than Indebtedness constituting Obligations), or obligations in respect of one or more Hedge Agreements (other than to the extent constituting Obligations), of any one or more of the Initial Borrower or any Borrower Group Member in an aggregate principal amount exceeding $30.0 million. For purposes of determining Material Debt, the “obligations” of the Initial Borrower or any Borrower Group Member in respect of any Hedge Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Initial Borrower or any Borrower Group Member would be required to pay if such Hedge Agreement were terminated at such time.

Material Party”: Holdings, any Borrower or any Restricted Subsidiary (other than an Immaterial Subsidiary).

Maturity Date”: with respect to (a) Revolving Credit Commitments (including, for the avoidance of doubt, any Incremental Revolving Commitments) that have not been extended pursuant to Section 2.22, February 9, 2021, and (b) with respect to Extended Revolving Credit Commitments, the

 

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final maturity date thereof as specified in the applicable Extension Offer accepted by the respective Revolving Credit Lender or Revolving Credit Lenders.

Maximum Rate”: as defined in Section 9.16.

MNPI”: any material Nonpublic Information regarding Holdings and its Subsidiaries or the Loans or securities of any of them that has not been disclosed to the Lenders generally (other than Lenders who elect not to receive such information). For purposes of this definition “material Nonpublic Information” shall mean Nonpublic Information with respect to the business of Holdings and its Subsidiaries or that would reasonably be expected to be material to a decision by any Lender to assign or acquire any Revolving Credit Loans or to enter into any of the transactions contemplated thereby or would otherwise be material for purposes of United States Federal and state securities laws.

Moody’s”: Moody’s Investor Services, Inc.

Mortgaged Properties”: the real properties listed on Schedule 1.1C (if any), as to which the Administrative Agent, for the benefit of the Secured Parties, shall be granted a Lien in accordance with Section 5.14 pursuant to the Mortgages and such other real properties as to which the Administrative Agent, for the benefit of the Secured Parties, shall be granted a Lien after the Closing Date pursuant to Section 5.9(b).

Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Secured Parties, to be in form and substance reasonably satisfactory to the Administrative Agent and Holdings.

Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 3(37) or Section 4001(a)(3) of ERISA or any “multi-employer pension plan”, “multi-employer plan” or any similar plan or arrangement, as defined under applicable Canadian pension standards or income tax legislation.

NOLV” or “Net Orderly Liquidation Value”: the cash proceeds of Inventory which could be obtained in an orderly liquidation (net of all liquidation expenses, costs of sale, commissions, operating expenses and retrieval and related costs), as determined pursuant to the most recent third-party appraisal of such Inventory delivered to the Collateral Agent pursuant to Section 5.2(c) by an appraiser reasonably acceptable to the Collateral Agent, and in each case expressed as a recovery percentage with respect to each such category of assets. The Net Orderly Liquidation Value for each such category of assets will be increased or reduced promptly upon receipt by the Collateral Agent of each updated appraisal.

Non-Consenting Lender”: as defined Section 2.18(c).

Non-Loan Party Subsidiary”: any Restricted Subsidiary of Holdings that is not a Loan Party.

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

Note”: any promissory note evidencing any Loan substantially in the form of Exhibit G.

Notice of Additional Guarantor”: a Notice of Additional Guarantor, in substantially the form of Exhibit K-2 hereto.

 

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Notice of Additional Borrower”: a Notice of Additional Borrower and Assumption Agreement, in substantially the form of Exhibit K-1 hereto.

Notice of Intent to Cure”: as defined in Section 7.2(c).

Obligations”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrowers, whether or not a claim for post-filing or post-petition interest is allowed or allowable in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Loan Parties to the Agents or to any Lender, any Issuing Bank or any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit or any Specified Hedge Agreement, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs or expenses (including all fees, charges and disbursements of counsel to the Arrangers, to any Agent or to any Lender that are required to be paid by the Borrowers pursuant hereto), and any Cash Management Obligations; provided, that (i) obligations of the Initial Borrower or any other Loan Party under any Specified Hedge Agreement or any Cash Management Obligations shall be secured and guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed (except as otherwise contemplated by Section 6.4 of the Guarantee and Collateral Agreement) and (ii) any release of Collateral or Guarantors effected in the manner permitted by this Agreement or any Security Document shall not require the consent of holders of obligations under Specified Hedge Agreements or holders of any Cash Management Obligations. Notwithstanding the foregoing, “Obligations” of any Loan Party shall not include any Excluded Swap Obligation of such Loan Party.

OFAC”: as defined in Section 3.19(b).

Organizational Documents”: with respect to any Person and as applicable, the certificate of incorporation or formation, memorandum or articles of association, bylaws, limited liability company agreement, limited partnership agreement or other organizational documents of such Person.

Other Connection Taxes”: with respect to the Agents, any Lender or any Issuing Bank, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than a connection arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

Other Taxes”: any and all present or future recording, stamp, court or documentary, intangible, filing or similar Taxes arising from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.18(b)).

Parent Entity”: any of Holdings and any Intermediate Parent.

Participant”: as defined in Section 9.4(c).

Participant Register”: as defined in Section 9.4(c).

 

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PATRIOT Act”: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001).

Payment Conditions”: that each of the following conditions are satisfied: (i) there is no Default or Event of Default existing immediately before or immediately after the action or proposed action, (ii) 30-Day Excess Availability and Excess Availability on the date of the action or proposed action (in each case calculated on a Pro Forma Basis after giving effect to the action or proposed action, any increase in any Borrowing Base or Acquired Asset Borrowing Base in connection therewith and the Borrowing of any Loans or issuance of any Letters of Credit in connection therewith (and assuming that such Loans and Letters of Credit had remained outstanding throughout the applicable 30-day period for which 30-Day Excess Availability is to be determined)) exceeds the greater of (A) 15.0% (or solely in the case of Permitted Acquisitions and other Investments (other than the designation of a Subsidiary as an Unrestricted Subsidiary under Section 5.13 or an Investment made in an Unrestricted Subsidiary), 12.5%) of the Line Cap at such time and (B) $37.5 million (or solely in the case of Permitted Acquisitions and other Investments (other than the designation of a Subsidiary as an Unrestricted Subsidiary under Section 5.13 or an Investment made in an Unrestricted Subsidiary), $31.25 million), (iii) unless the Fixed Charge Condition (as defined below) is satisfied at such time, Holdings shall be in compliance with a Consolidated Fixed Charge Coverage Ratio of not less than 1.00:1.00 for the Relevant Reference Period on a Pro Forma Basis as if such action or proposed action had occurred on the first day of such period, and (iv) in the case of Restricted Payments under Section 6.6(n), Investments under Sections 6.7(f) (other than Permitted Acquisitions otherwise permitted without regard to Payment Conditions) and Section 6.7(t), prepayments of Junior Debt under Section 6.8(ii) and any designation of a Subsidiary as an Unrestricted Subsidiary under Section 5.13, in each case, to the extent only permitted if Payment Conditions are satisfied, the amount of which would exceed 2.5% of Consolidated Total Assets, Holdings shall have delivered to the Administrative Agent a certificate of a Responsible Officer of Holdings certifying as to compliance with preceding clauses (i) through (iii) and demonstrating (in reasonable detail) the calculations required by preceding clauses (ii) and (iii). “Fixed Charge Condition” shall mean 30-Day Excess Availability and Excess Availability on the date of the action or proposed action (in each case calculated after giving effect on a Pro Forma Basis to any increase in any Borrowing Base or Acquired Asset Borrowing Base in connection therewith and the Borrowing of any Loans or issuance of any Letters of Credit in connection with the action or proposed action) (and assuming that such Loans and Letters of Credit had remained outstanding throughout the applicable 30-Day period for which 30-Day Excess Availability is to be determined) exceeds the greater of (A) 20.0% (or solely in the case of Permitted Acquisitions and other Investments (other than the designation of a Subsidiary as an Unrestricted Subsidiary under Section 5.13 or an Investment made in an Unrestricted Subsidiary), 17.5%) of the Line Cap at such time and (B) $50.0 million (or solely in the case of Permitted Acquisitions and other Investments (other than the designation of a Subsidiary as an Unrestricted Subsidiary under Section 5.13 or an Investment made in an Unrestricted Subsidiary), $43.75 million).

PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA and any successor entity performing similar functions.

Perfection Certificate”: a certificate in the form of Exhibit D or any other form approved by the Administrative Agent.

Permitted Acquisition”: as defined in Section 6.7(f).

Permitted Amendment”: any Extension Amendment or Incremental Facility Amendment.

Permitted Discretion”: the reasonable exercise of the applicable Agent’s good faith credit judgment (from the perspective of a reasonable secured asset based lender), exercised in accordance with

 

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the applicable Agent’s customary and generally applicable credit practices, in consideration of any factor which is reasonably likely to (i) adversely affect the value of any Collateral, the enforceability or priority of the Liens thereon or the amount that the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation thereof, (ii) suggest that any collateral report or financial information delivered to the Administrative Agent, the Collateral Agent, the Issuing Banks or the Lenders by any Person on behalf of any Loan Party is incomplete, inaccurate or misleading in any material respect, or (iii) increase in any material respect the likelihood that the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders would not receive payment in full in cash for all of the Obligations. In exercising such judgment, the Administrative Agent and the Collateral Agent may consider (but not make duplicate adjustment for) such factors as are already included in or tested by the definition of Eligible Trade Accounts, Eligible Credit Card Accounts or Eligible Inventory, as well as any of the following (but only to the extent not otherwise adjusted for in the relevant calculations): (i) the changes in collection history and dilution or collectability with respect to the Accounts; (ii) changes in demand for, pricing of, or product mix of Inventory; and (iii) any other objective factors that change the credit risk of lending to any Qualified Loan Party on the security of any Qualified Loan Party’s Accounts or Inventory.

Permitted Holding Company”: any direct or indirect parent of Holdings that does not hold Capital Stock of any Person other than Holdings or another Permitted Holding Company.

Permitted Investors”: the collective reference to (i) the Sponsor and its Control Investment Affiliates and (ii) any members of management of any Group Member that own Capital Stock in Holdings, directly or indirectly, on the Closing Date; provided, that to the extent the amount of Capital Stock owned by such members of management constitutes in the aggregate a greater percentage of the aggregate ordinary voting power of Holdings than the Capital Stock of Holdings owned by the Sponsor and its Control Investment Affiliates, then such members of management shall not be Permitted Investors.

Permitted Liens”: the collective reference to (i) in the case of Collateral other than Pledged Capital Stock, Liens permitted by Section 6.3 and (ii) in the case of Collateral consisting of Pledged Capital Stock, non-consensual Liens permitted by Section 6.3 and Liens permitted by Sections 6.3(h), (j), (l), (s), (t), (v) and (w).

Permitted Management Fees”: management, monitoring, consulting, transaction, oversight, advisory or similar fees payable or reimbursable pursuant to the Management Agreement in an aggregate amount not to exceed $3,500,000 per fiscal year; provided that the foregoing limit shall not apply to (i) reimbursements of identifiable third party expenses or (ii) any such management or similar fees accrued and not paid in prior periods.

Permitted Receivables Financing”: any Receivables Financing of a Permitted Receivables Financing Subsidiary that meets the following conditions: (a) such Receivables Financing (including financing terms, covenants, termination events and other provisions) shall be in the aggregate economically fair and reasonable to the Borrower Group Members (other than any Permitted Receivables Financing Subsidiary), on the one hand, and the Permitted Receivables Financing Subsidiary, on the other, (b) all sales, transfers and/or participations of Permitted Receivables Financing Assets to the Permitted Receivables Financing Subsidiary shall be made at fair market value (as determined in good faith by Holdings), (c) the financing terms, covenants, termination events and other provisions thereof shall be market terms for similar transactions and may include Standard Securitization Undertakings, in each case as determined by the Initial Borrower in good faith and (d) if reasonably requested by the Administrative Agent, the execution and delivery of an agreement with the provider or agent of such Permitted Receivables Financing relating to the Permitted Receivables Financing Assets subject to such

 

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financing, in form and substance reasonably satisfactory to the Administrative Agent and such Permitted Receivables Financing Subsidiary.

Permitted Receivables Financing Assets”: the accounts receivable subject to a Permitted Receivables Financing, and related assets (including contract rights) which are of the type customarily transferred or in respect of which security interests are customarily granted in connection with securitizations of accounts receivables (including the Capital Stock of any Permitted Receivables Financing Subsidiary), and the proceeds thereof.

Permitted Receivables Financing Fees”: reasonable and customary distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Permitted Receivables Financing Subsidiary in connection with, any Permitted Receivables Financing.

Permitted Receivables Financing Subsidiary”: a Wholly Owned Subsidiary of the Initial Borrower (or another Person formed for the purposes of engaging in a Permitted Receivables Financing in which the Initial Borrower or any of the Restricted Subsidiaries makes an Investment and to which the Initial Borrower or any of the Restricted Subsidiaries transfers Permitted Receivables Financing Assets) that engages in no activities other than in connection with the financing of Permitted Receivables Financing Assets of the Borrower Group Members, all proceeds thereof and all rights (contingent and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Initial Borrower (as provided below) as a Permitted Receivables Financing Subsidiary and (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Initial Borrower or any Borrower Group Member, other than another Permitted Receivables Financing Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Initial Borrower or any Borrower Group Member, other than another Permitted Receivables Financing Subsidiary, in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the Initial Borrower or any Borrower Group Member, other than another Permitted Receivables Financing Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which none of the Initial Borrower or any Borrower Group Member, other than another Permitted Receivables Financing Subsidiary, has any material contract, agreement, arrangement or understanding other than (i) with Standard Securitization Undertakings or (ii) on terms no less favorable to the Initial Borrower or any Borrower Group Member than those that might be obtained at the time from Persons that are not Affiliates of the Initial Borrower and (c) to which none of the Initial Borrower or any Borrower Group Member, other than another Permitted Receivables Financing Subsidiary, has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the Initial Borrower shall be evidenced to the Agents by delivery to the Agents of a certified copy of the resolution of the Board of Directors of the Initial Borrower giving effect to such designation and a certificate executed by a Responsible Officer certifying that such designation complied with the foregoing conditions.

Permitted Refinancing”: with respect to any Indebtedness of any Person, any refinancing, refunding, renewal, replacement, defeasance, discharge or extension of such Indebtedness (each, a “refinancing”, with “refinanced” having a correlative meaning); provided, that (a) the aggregate principal amount (or accreted value, if applicable) does not exceed the then outstanding aggregate principal amount (or accreted value, if applicable) of the Indebtedness so refinanced, except by an amount equal to all unpaid accrued or capitalized interest thereon, any make-whole payments or premium (including tender premium) applicable thereto or paid in connection therewith, any swap breakage costs and other

 

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termination costs related to Hedge Agreements, plus upfront fees and original issue discount on such refinancing Indebtedness, plus other customary fees and expenses in connection with such refinancing, (b) other than in the case of a refinancing of purchase money Indebtedness and Capital Lease Obligations, such refinancing has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being refinanced, (c) the borrower/issuer under such refinancing is the same Person that is the borrower/issuer under the Indebtedness being so refinanced and the other Persons that are (or are required to be) obligors under such refinancing are not more expansive than the Persons that are (or are required to be) obligors under the Indebtedness being so refinanced, except that any Guarantor may be an obligor thereof if otherwise permitted by this Agreement, (d) in the event such Indebtedness being so refinanced is (i) contractually subordinated in right of payment to the Obligations, such refinancing shall contain subordination provisions that are substantially the same (as determined by the Initial Borrower in good faith) as those in effect prior to such refinancing or are not materially less favorable, taken as a whole (as determined by the Initial Borrower in good faith), to the Secured Parties than those contained in the Indebtedness being so refinanced or are otherwise reasonably acceptable to the Administrative Agent or (ii) secured by a junior permitted lien on the Collateral (or portion thereof) and/or subject to intercreditor arrangements for the benefit of the Lenders, in the case of this clause (ii) such refinancing shall be unsecured or secured by a junior permitted lien on the Collateral (or portion thereof), and subject to intercreditor arrangements on substantially the same terms (as determined by the Initial Borrower in good faith) as those in effect prior to such refinancing or on terms not materially less favorable, taken as a whole, to the Secured Parties than those in respect of the Indebtedness being so refinanced or on such other terms reasonably acceptable to the Administrative Agent, (e) such refinancing does not provide for the granting or obtaining of collateral security from, or obtaining any lien on any assets of, any Person, other than collateral security obtained from Persons that provided (or were required to provide) collateral security with respect to Indebtedness being so refinanced (so long as the assets subject to such liens were or would have been required to secure the Indebtedness so refinanced) (provided, that additional Persons that would have been required to provide collateral security with respect to the Indebtedness being so refinanced may provide collateral security with respect to such refinancing and any Guarantor may provide collateral security otherwise permitted by this Agreement that is junior to the Liens under the Security Documents on terms not materially less favorable to the Lenders (as determined by the Initial Borrower in good faith) than those set forth in the Intercreditor Agreement) and (f) in the event such Indebtedness being so refinanced is Junior Debt or is incurred under Section 6.2(d) or (g), the terms of such refinancing, as compared to the Indebtedness being so refinanced, are, when taken as a whole, not materially less favorable to the Secured Parties as compared to the Indebtedness being so refinanced (other than (x) with respect to interest rates, fees, funding discounts, liquidation preferences, premiums, no call periods, subordination terms and optional prepayment and optional redemption provisions and (y) terms applicable only to periods after the then Latest Maturity Date (as determined on the date of incurrence of such Indebtedness)) (in each case, as determined by the Initial Borrower in good faith).

Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

Plan”: any employee benefit plan as defined in Section 3(3) of ERISA and in respect of which the Initial Borrower or a Commonly Controlled Entity sponsors, maintains, or contributes to, is required to contribute to, or has or could reasonably expect to have liability, contingent or otherwise, under ERISA.

Platform”: as defined in Section 9.1.

Pledged Capital Stock”: as defined in the Guarantee and Collateral Agreement.

 

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PPSA”: the Personal Property Security Act (Ontario), the Civil Code of Quebec or similar personal property security legislation as in effect from time to time (except as otherwise specified) in any applicable province or territory of Canada.

Prime Rate”: the rate of interest per annum determined from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City and notified to the Initial Borrower. The prime rate is a rate set by the Administrative Agent based upon various factors, including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate.

Private Lender Information”: as defined in Section 9.1.

Pro Forma Basis”: with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Pro Forma Transactions) in accordance with Section 1.5.

Pro Forma Transaction”: (a) the Transactions, (b) any IPO, (c) any incurrence or repayment of Indebtedness (other than for working capital purposes or in the ordinary course of business), the making of any Restricted Payment pursuant to Section 6.6(n), any Investment that results in a Person becoming a Restricted Subsidiary or an Unrestricted Subsidiary, any Permitted Acquisition or any Disposition that results in a Restricted Subsidiary ceasing to be a Subsidiary or any Investment constituting an acquisition of assets constituting a business unit, line of business or division of another Person or any Disposition of a business unit, line of business or division of a Borrower Group Member, in each case whether by merger, consolidation, amalgamation or otherwise and (d) any restructuring or cost saving, operational change or business rationalization initiative or other initiative.

Process Agent”: as defined in Section 9.9(e).

Projections”: as defined in Section 5.2(b).

Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

Public Lender”: as defined in Section 9.1.

Public Lender Information”: as defined in Section 9.1.

Purchase Agreement”: the Share Purchase Agreement dated July 4, 2016 between Construction Products Acquisition, LLC, as the purchaser, on the one hand, and Superior Plus LP and Superior Plus U.S. Holdings Inc., as the sellers, on the other hand.

Qualified Capital Stock”: Capital Stock that is not Disqualified Capital Stock.

Qualified Counterparty”: with respect to any Specified Hedge Agreement or Cash Management Obligations, any counterparty thereto that, at the time such Specified Hedge Agreement or Cash Management Obligations were entered into or, in the case of a Specified Hedge Agreement or Cash Management Obligations, as the case may be, existing on the Closing Date, on the Closing Date, was an Agent, an Arranger, a Lender or an Affiliate of any of the foregoing, regardless of whether any such Person shall thereafter cease to be an Agent, an Arranger, a Lender or an Affiliate of any of the foregoing.

 

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Qualified Jurisdiction”: (a) with respect to the Initial Borrower, the United States, and (b) with respect to any other Loan Party, the United States or Canada, in each case, together with any State, Province, Territory or other political sub-division therein, or such other jurisdiction as shall be consented to by each Lender.

Qualified Loan Party”: each Loan Party that is a Wholly Owned Subsidiary of Holdings and organized or incorporated under the laws of a Qualified Jurisdiction.

Receivables Financing”: any transaction or series of transactions that may be entered into by Holdings or any Restricted Subsidiary pursuant to which Holdings or any Group Member may sell, convey or otherwise transfer to (a) a Permitted Receivables Financing Subsidiary (in the case of a transfer by Holdings or any Group Member) or (b) any other Person (in the case of a transfer by a Permitted Receivables Financing Subsidiary), or a Permitted Receivables Financing Subsidiary may grant a security interest in, any Permitted Receivables Financing Assets of Holdings or any Group Member.

Recovery Event”: any settlement of, or payment in respect of, any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.

Reference Rate”: (a) with respect to the Loans comprising each Eurodollar Borrowing denominated in US Dollars, for each day during each Interest Period with respect thereto, a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing, (b) with respect to any Eurodollar Loan denominated in Canadian Dollars, for each day during each Interest Period with respect thereto, a rate per annum equal to the CDOR Rate for the Interest Period in effect for such Borrowing, (c) with respect to any ABR Loan denominated in US Dollars, the Alternate Base Rate and (d) with respect to any ABR Loan denominated in Canadian Dollars, the Canadian Prime Rate.

Refinancing”: on the Closing Date, after giving effect to the Transactions, the repayment, satisfaction and discharge of all Existing Debt and the release and termination of all security interests and guarantees in respect thereof, if any.

Refinancing Indebtedness”: with respect to any Indebtedness, any other Indebtedness incurred in connection with a Permitted Refinancing of such Indebtedness.

Register”: as defined in Section 9.4(b)(iv).

Regulation FD”: Regulation FD as promulgated by the SEC under the Exchange Act, as in effect from time to time.

Regulation H”: Regulation H of the Board as in effect from time to time.

Regulation U”: Regulation U of the Board as in effect from time to time.

Reimbursement Obligation”: the obligation of the applicable Borrower to reimburse each Issuing Bank pursuant to Section 2.4(e) for amounts drawn under Letters of Credit issued by such Issuing Bank.

Related Parties”: with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, partners, members, trustees, managers, controlling persons, agents, advisors and other representatives of such Person and such Person’s Affiliates and the respective successors and permitted assigns of each of the foregoing.

 

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Release”: with respect to Hazardous Materials, any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within any building, structure, facility or fixture.

Relevant Reference Period”: the Test Period then most recently ended for which financial statements have been delivered pursuant to Section 5.1(a) or 5.1(b) immediately preceding the date on which the action for which such calculation is being made shall occur (or, prior to the first delivery of the financial statements pursuant to Section 5.1(a) or 5.1(b), the Test Period ended March 31, 2016).

Rent Reserve”: a reserve established by the Collateral Agent (upon at least three (3) Business Days’ notice to the Borrowers) equal to three (3) months’ rent (or a lesser amount reasonably agreed to by the Collateral Agent), in respect of rent payments made by a Qualified Loan Party for each distribution center, warehouse or other location where Inventory of Qualified Loan Parties with a book value in excess of $2.0 million (as reported to the Collateral Agent by the Initial Borrower from time to time as requested by the Collateral Agent) and (a) that is in a jurisdiction providing lessors with statutory or common law Lien rights on personal property located at such location securing payment of rent and other charges that prime a previously perfected security interest, or (b) that is subject to a lease that grants to the landlord a Lien on property that would otherwise constitute Eligible Inventory which has priority over the respective Liens on such Collateral created in favor of the Administrative Agent, unless, in each case, such location is subject to a Collateral Access Agreement.

Repayment”: as defined in Section 1.5(d).

Reportable Event”: any of the “reportable events” set forth in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Plan, other than those events as to which notice is waived pursuant to DOL Reg. Part 4043.

Required Lenders”: at any time, the holders of more than 50.0% of the Total Revolving Credit Commitments then in effect or, if the Revolving Credit Commitments have been terminated, the Total Revolving Credit Exposure; provided, that the Revolving Credit Exposure and Revolving Credit Commitment of any Defaulting Lender shall be disregarded in making any determination under this definition.

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

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

Reserves”: reserves, if any, established by the Collateral Agent from time to time hereunder in its Permitted Discretion against the US Borrowing Base or the Canadian Borrowing Base, including without limitation (but without duplication), (i) Rent Reserves, (ii) potential dilution related to Accounts, (iii) sums that the Qualified Loan Parties are or will be required to pay (such as taxes, assessments and insurance premiums) and have not yet paid, (iv) amounts owing by any Qualified Loan Party to any Person to the extent secured by a Lien on, or trust over, any Collateral, (v) amounts reflecting declines in market value or to reflect factors that may negatively impact the value of Inventory, including change in salability, obsolescence, seasonality, change in composition or mix, markdowns and vendor chargebacks, (vi) the full amount of any liabilities or amounts which rank or are capable of ranking in priority to the Administrative Agent’s Liens and/or for amounts which may represent costs relating to the enforcement

 

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of such Liens including, without limitation, (a) amounts due to employees in respect of unpaid wages, payment in lieu of notice and holiday pay, (b) rebates related to Accounts and purchase rebates related to Inventory, (c) open items relating to completion of Inventory test counts, (d) the expenses and liabilities incurred by any administrator (or other insolvency officer) and any remuneration of such administrator (or other insolvency officer) and (e) amounts subject to First Priority Priming Liens of the type described in clause (i) of the definition thereof, and (vii) such other events, conditions or contingencies as to which the Collateral Agent, in its Permitted Discretion, determines reserves should be established (without duplication of any reserves established pursuant to foregoing clauses (i) through (vi)) from time to time hereunder; provided, however, that the Collateral Agent may not implement reserves with respect to matters which are already specifically reflected as ineligible Accounts or Inventory or criteria deducted in computing the amount of Eligible Trade Accounts or Eligible Credit Card Accounts, the Value of Eligible Inventory or the Net Orderly Liquidation Value of Eligible Inventory.

Responsible Officer”: as to any Person, the chief executive officer, president, chief financial officer, chief accounting officer, treasurer or director of such Person, but in any event, with respect to financial matters, the chief financial officer, chief accounting officer, treasurer or director of such Person. Unless otherwise qualified, all references to a “Responsible Officer” shall refer to a Responsible Officer of Holdings.

Restricted Payments”: as defined in Section 6.6.

Restricted Subsidiary”: any Subsidiary other than an Unrestricted Subsidiary. For the avoidance of doubt, each Borrower is as of the date hereof and shall remain for all purposes of this Agreement a Restricted Subsidiary.

Returns”: with respect to any Investment, any dividends, interest, distributions, return of capital and other amounts received or realized in respect of such Investment.

Revolving Credit Borrowing”: a Borrowing comprised of Revolving Credit Loans.

Revolving Credit Commitments”: as to any Revolving Credit Lender, the obligation of such Revolving Credit Lender, if any, to make Revolving Credit Loans pursuant to Section 2.1, and to participate in Letters of Credit pursuant to Section 2.4, expressed as an amount representing the maximum aggregate permitted amount of such Revolving Credit Lender’s Revolving Credit Exposure hereunder, and in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Credit Commitment” opposite such Revolving Credit Lender’s name on Schedule 2.1, or, as the case may be, in the Assignment and Assumption pursuant to which such Revolving Credit Lender became a party hereto, in each case as the same may be changed from time to time pursuant to the terms hereof. The original aggregate amount of the total Revolving Credit Commitments on the Closing Date is $250.0 million.

Revolving Credit Exposure”: at any time, with respect to any Lender, the sum of such Lender’s Revolving Credit Loans, participations in Agent Advances and its LC Exposure at such time.

Revolving Credit Facility” or “Facility”: the Revolving Credit Commitments and the extensions of credit made thereunder, as the same may be increased pursuant to Section 2.20 and/or extended pursuant to Section 2.22.

Revolving Credit Lender”: each Lender that has a Revolving Credit Commitment or that is the holder of Revolving Credit Loans.

 

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Revolving Credit Loan”: a Loan made by a Revolving Credit Lender pursuant to Section 2.1. Each Revolving Credit Loan shall be a Eurodollar Loan or an ABR Loan.

Revolving Priority Collateral”: has the meaning ascribed thereto in the Intercreditor Agreement.

Royal Bank”: the Royal Bank of Canada.

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

Sale and Leaseback Transaction”: as defined in Section 6.10.

Satisfactory Auditor’s Report”: as defined in Section 5.1(a).

SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

Secured Parties”: as defined in the Guarantee and Collateral Agreement.

Securities Act”: the Securities Act of 1933.

Security Documents”: the collective reference to the US Security Documents, the Canadian Security Documents and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any Property of any Loan Party to secure any Obligations.

Seller”: as defined in the preliminary statements hereto.

Senior Representative”: with respect to any series of Indebtedness, the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.

Senior Secured Bridge Agent”: the administrative agent or trustee under the Senior Secured Bridge Documents with respect to any Senior Secured Bridge Debt.

Senior Secured Bridge Debt”: the Senior Secured Bridge Loans, Senior Secured Extended Term Loans and/or Senior Secured Exchange Securities described in the Commitment Letter or Takeout Securities described in the Fee Letter and outstanding from time to time pursuant to the Senior Secured Bridge Documents.

Senior Secured Bridge Documents”: the definitive documentation for the Senior Secured Bridge Debt that may be entered into pursuant to the Commitment Letter and the Fee Letter if all or any portion of the Senior Secured Notes are not issued on or prior to the Closing Date, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms and the terms of this Agreement.

Senior Secured Notes”: those certain 8.25% Senior Secured Notes due 2021 issued by Initial Borrower, pursuant to the Senior Secured Notes Indenture.

Senior Secured Notes Documents”: the Senior Secured Notes Indenture and the other Notes Documents, as defined therein, in each case, as may be amended, restated, modified, supplemented or replaced in accordance with its terms and the terms of this Agreement.

 

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Senior Secured Notes Indenture”: that certain Indenture dated as of August 9, 2016 by and among Initial Borrower, as issuer, various of the Guarantors, as guarantors, and the Senior Secured Notes Trustee, relating to the Senior Secured Notes, as may be amended, restated, modified, supplemented or replaced in accordance with its terms and the terms of this Agreement.

Senior Secured Notes Trustee”: Wilmington Trust, National Association, as trustee under the Senior Secured Notes, together with any successor.

Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

Solvent”: with respect to any Person, as of any date of determination, (a) the fair value of the assets of such Person exceeds the amount of all debts and liabilities of such Person, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of such Person is greater than the amount that will be required to pay the probable liability of the debts and other liabilities of such Person, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) such Person has not incurred and does not intend to incur, or believe that it will incur, debts or other liabilities, including current obligations, beyond its ability to pay such debts or other liabilities as they become due (whether at maturity or otherwise); and (d) such Person is not engaged in, and is not about to be engaged in, business for which it has unreasonably small capital and (e) in the case of any Canadian Loan Party, it is not an “insolvent person” for the purposes of the Bankruptcy and Insolvency Act (Canada). For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured. For purposes of this definition, the amount of any contingent, unliquidated and disputed claim and any claim that has not been reduced to judgment at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Specified ABL Default”: any Event of Default under Section 7.1(a), 7.1(b) (solely as a result of a breach of representations or warranties with respect to any Borrowing Base), 7.1(c)(i) (solely as a result of a failure to timely deliver a Borrowing Base certificate), 7.1(c)(ii), 7.1(c)(iii) (solely as a result of a failure to comply with the Financial Covenant) or 7.1(f).

Specified Change of Control”: a “Change of Control” or like event as defined in the agreement or agreements governing any Material Debt.

Specified Default”: any Default or Event of Default under Section 7.1(a) or 7.1(f).

Specified Foreign Subsidiary”: any direct or indirect subsidiary of Holdings that is a CFC and with respect to which any US Borrower is a “United States shareholder” within the meaning of section 951 of the Code and any subsidiary thereof.

Specified Hedge Agreement”: any Hedge Agreement entered into or assumed by any Loan Party and any Qualified Counterparty and designated by such Qualified Counterparty and Holdings in writing to the Administrative Agent as a “Specified Hedge Agreement”.

Specified Prepayment”: as defined in Section 6.8.

 

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Specified Purchase Agreement Representations”: such of the representations and warranties made by the Seller or on behalf of or with respect to the Targets in the Purchase Agreement as are material to the interests of the Lenders, but only to the extent that the Initial Borrower (or any Affiliate of the Initial Borrower) has the right (taking into account any applicable cure provisions under the Purchase Agreement) to terminate Initial Borrower’s (or any of its Affiliates’) obligations under the Purchase Agreement or the right to decline to consummate the Acquisition, in each case as a result of the failure of such representations and warranties to be accurate.

Specified Representations”: the representations and warranties with respect to the Initial Borrower and the Guarantors set forth in this Agreement under (i) Section 3.3(a); (ii) the first two sentences and the last two sentences of Section 3.4; (iii) Section 3.5 (but only in respect of violations or defaults under Organizational Documents of the Loan Parties); (iv) Section 3.10; (v) Section 3.12; (vi) Section 3.17(a) (subject to (x) the Limited Conditionality Provision, (y) Permitted Liens and (z) in the case of priority, the Intercreditor Agreement and any other intercreditor arrangements required to be entered into pursuant to this Agreement); (vii) Section 3.18; and (viii) the second sentence of Section 3.19.

Sponsor”: Lone Star Fund IX (U.S.), L.P. (“Lone Star”) or Hudson Advisors and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by Lone Star or Hudson Advisors, but not including, however, any portfolio companies of any of the foregoing.

Standard Securitization Undertakings”: reasonable and customary representations, warranties, covenants and indemnities (including repurchase obligations in the event of a breach of representation and warranty) made or provided, and servicing obligations undertaken, by any Group Member in connection with a Permitted Receivables Financing.

Statutory Reserve Rate”: 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 percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurodollar Liabilities” in Regulation D of the Board). Such reserve percentage 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 Intercompany Notes”: each of (i) the US Subordinated Intercompany Note attached as Exhibit B to the US Guarantee and Collateral Agreement and (ii) the Canadian Subordinated Intercompany Note attached as Exhibit B to each of the Canadian Guarantee and Collateral Agreements.

Subsequent Required Guarantor”: as defined in Section 5.9(c).

Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a

 

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“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Initial Borrower.

Subsidiary Guarantor”: each Subsidiary of Holdings, other than an Excluded Subsidiary (but including any Discretionary Guarantor).

Successor Initial Borrower”: as defined in Section 6.4(g).

Surviving Debt”: the Indebtedness set forth on Schedule 1.1D.

Swap Obligation”: with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

Targets”: as defined in the preliminary statements hereto.

Taxes”: any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholdings), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Test Period”: on any date of determination, the period of four consecutive fiscal quarters of Holdings then most recently ended, taken as one accounting period.

Total Canadian Revolving Credit Exposure”: at any time, the aggregate amount of the Canadian Revolving Credit Exposure of all Revolving Credit Lenders outstanding at such time.

Total Leverage Ratio”: as of any date of determination, the ratio of (a) Consolidated Total Debt as of such date to (b) the aggregate amount of Consolidated EBITDA for the Relevant Reference Period.

Total Revolving Credit Commitments”: at any time, the aggregate amount of the Revolving Credit Commitments then in effect.

Total Revolving Credit Exposure”: at any time, the aggregate amount of the Revolving Credit Exposure of all Revolving Credit Lenders outstanding at such time.

Total US Revolving Credit Exposure”: at any time, the Total Revolving Credit Exposure at such time minus the Total Canadian Revolving Credit Exposure at such time.

Transaction Costs”: all fees (including original issue discount), costs and expenses incurred by Holdings or any Group Member in connection with the Transactions.

Transactions”: the collective reference to (a) the Acquisition, (b) the Equity Contribution, (c) the execution, delivery and performance by the Initial Borrower and each other Loan Party of this Agreement and each other Loan Document required to be delivered hereunder, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder, (d) the execution, delivery and performance by the Initial Borrower and each other Loan Party of the Senior Secured Notes Documents or any Senior Secured Bridge Documents required to be delivered thereunder, the issuance of the Senior Secured Notes or the borrowing of any Senior Secured Bridge Debt, and the use of the proceeds thereof, (e) the Refinancing and (f) the payment of the Transaction Costs.

 

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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, the CDOR Rate or the Alternate Base Rate.

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

United States” and “US”: the United States of America.

Unrestricted Cash”: (i) unrestricted cash and Cash Equivalents, and (ii) cash and Cash Equivalents that are restricted in favor of the Administrative Agent or the Senior Secured Notes Trustee (it being agreed that cash and Cash Equivalents (A) subject to Liens permitted by Section 6.3(h), (l), (o), (t) or, if such Liens secure any Consolidated Total Debt, (s), (v) or (w) shall not be deemed to be restricted by virtue of such Liens and (B) shall not be deemed restricted by virtue of the provisions of the Intercreditor Agreement) (in each case whether cash or Cash Equivalents are “unrestricted” or “restricted” is to be determined in accordance with GAAP).

Unrestricted Subsidiary”: any Subsidiary of Holdings (other than any Borrower) designated by the Board of Directors of Holdings as an Unrestricted Subsidiary pursuant to Section 5.13 subsequent to the date hereof, until such Person ceases to be an Unrestricted Subsidiary of Holdings in accordance with Section 5.13.

US Acquired Asset Borrowing Base”: as defined in the definition of US Borrowing Base.

US Borrower”: the Initial Borrower and each Additional US Borrower.

US Borrowing Base”: as of any date of calculation, the amount calculated as the “US Borrowing Base” pursuant to the Borrowing Base Certificate most recently delivered to the Agents in accordance with Section 5.2(c) (but as modified as provided below in this definition), equal to, without duplication, the sum of:

(a) 85.0% of the book value of Eligible Trade Accounts of each US Loan Party; plus

(b) 90.0% of the book value of Eligible Credit Card Accounts of each US Loan Party; plus

(c) the lesser of (i) 75.0% of Value of Eligible Inventory of each US Loan Party and (ii) 85.0% of the NOLV of Eligible Inventory for each US Loan Party; plus

(d) 100% of Eligible Cash of each US Loan Party; minus

(e) the Eligible Reserves on the US Borrowing Base.

Notwithstanding the foregoing, any Inventory (including inventory in transit) and Accounts (i) acquired by any US Loan Party in a Permitted Acquisition or (ii) of any Person that becomes a US Loan Party in connection with such Permitted Acquisition, in each case, subject to a first-priority Lien in favor of the Administrative Agent (subject to First Priority Priming Liens), may be immediately included in a Borrowing Base Certificate delivered by the Borrowers in an amount equal to 50.0% of the book value thereof as set forth in the consolidated balance sheet of the relevant acquired entities or sellers (in the case

 

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of an asset acquisition) for the most recently ended fiscal quarter of the US Loan Parties for which financial statements have been delivered pursuant to Section 5.1(a) or (b), and applying eligibility and reserve criteria consistent with those applied to the calculation of the US Borrowing Base (other than eligibility and reserve criteria based in whole or in part upon the absence of a field examination or inventory appraisal), until the completion by the Collateral Agent of a reasonably satisfactory field examination and inventory appraisal in respect thereof (the “US Acquired Asset Borrowing Base”). To the extent that the Collateral Agent has not completed, at the Borrowers’ expense, a field examination and inventory appraisal reasonably satisfactory to the Collateral Agent within 90 days of the acquisition of such Inventory and Accounts (or such longer period as the Collateral Agent may reasonably agree) such Inventory and Accounts will cease to be eligible for inclusion in the US Borrowing Base.

The Collateral Agent shall have the right (but not the obligation) to review such computations and if the Collateral Agent shall have reasonably determined in good faith in its Permitted Discretion that such computations have not been calculated in accordance with the terms of this Agreement, the Collateral Agent shall have the right to correct any such errors.

US Dollar Equivalent”: on any date of determination, (a) with respect to any amount in US Dollars, such amount, and (b) with respect to any amount in a Foreign Currency, the equivalent in US Dollars of such amount, determined by the Administrative Agent using the Exchange Rate with respect to such Foreign Currency at the time in effect for such amount.

US Dollars” and “$”: lawful currency of the United States.

US Borrower Obligations”: the Obligations of the US Borrowers.

US Guarantee and Collateral Agreement”: the ABL US Guarantee and Collateral Agreement among Holdings, each US Borrower, each US Subsidiary Guarantor and the Administrative Agent, substantially in the form of Exhibit A-3.

US Guarantors”: Holdings, each US Borrower (except with respect to its own Obligations) and each US Subsidiary Guarantor.

US IP Security Agreements”: the collective reference to each Intellectual Property Security Agreement required to be entered into and delivered pursuant to the terms of this Agreement and the Security Documents with respect to Intellectual Property of the Loan Parties registered in the United States, in each case, in substantially the form of Exhibit A to the US Guarantee and Collateral Agreement or the Canadian NY Law Guarantee and Collateral Agreement.

US Line Cap”: at any time, the lesser of (i) 100% (or, during an Agent Advance Period, 110%) of the US Borrowing Base at such time and (ii) the Total Revolving Credit Commitments in effect at such time minus the Total Canadian Revolving Credit Exposure at such time.

US Loan Parties”: the US Borrowers and US Guarantors.

US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

US Security Documents”: the collective reference to (a) the US Guarantee and Collateral Agreement, (b) any US IP Security Agreements, (c) any Mortgage with respect to owned real property located in the United States and (d) all other security documents governed by the laws of the United

 

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States or any State or other political sub-division thereof hereafter delivered to the Administrative Agent granting a Lien on any Property of any Loan Party to secure any Obligations.

US Subsidiary Guarantor”: each Domestic Subsidiary of Holdings that is a Subsidiary Guarantor.

US Tax Compliance Certificate”: as defined in Section 2.16(e)(ii)(B)(3).

Value”: with respect to Eligible Inventory, the lower of (i) the cost thereof computed on a first-in first-out basis in accordance with GAAP and (ii) the market value thereof.

Weighted Average Life to Maturity”: when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal (excluding nominal amortization), including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

Wells Fargo” means Wells Fargo Bank, National Association.

Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than (a) directors’ qualifying shares and (b) nominal shares issued to foreign nationals to the extent required by applicable Requirements of Law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

Withholding Agent”: any Loan Party or the Administrative Agent, as applicable.

Write-Down and Conversion Powers”: with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, unless otherwise specified herein or in such other Loan Document:

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

(ii) Section, Schedule and Exhibit references refer to (A) the appropriate Section, Schedule or Exhibit in this Agreement or (B) to the extent such references are not present in this Agreement, to the Loan Document in which such reference appears;

(iii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

 

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(iv) the word “will” shall be construed to have the same meaning and effect as the word “shall”;

(v) the word “incur” shall be construed to mean incur, create, issue, assume or become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings);

(vi) unless the context requires otherwise, the word “or” shall be construed to mean “and/or”;

(vii) unless the context requires otherwise, (A) any reference to any Person shall be construed to include such Person’s legal successors and permitted assigns, (B) any reference to any law or regulation shall refer to such law or regulation as amended, modified or supplemented from time to time, and any successor law or regulation, (C) the words “asset” and “property” shall be construed to have the same meaning and effect, and (D) references to agreements (including this Agreement) or other Contractual Obligations shall be deemed to refer to such agreements or Contractual Obligations as amended, restated, amended and restated, supplemented or otherwise modified from time to time (in each case, to the extent not otherwise prohibited hereunder); and

(viii) capitalized terms not otherwise defined herein and that are defined in the UCC shall have the meanings therein described.

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

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e) The expressions “payment in full”, “paid in full” and any other similar terms or phrases when used herein with respect to the Obligations shall mean the payment in full, in immediately available funds, of all of the Obligations (excluding Obligations in respect of any Specified Hedge Agreements, Cash Management Obligations and contingent reimbursement and indemnification obligations, in each case, that are not then due and payable) and the expiration or termination of all undrawn Letters of Credit (or cash collateralization (in a manner consistent with Section 2.4(j)) or provision of backstop letters of credit (in a manner reasonably satisfactory to the relevant Issuing Bank) with respect thereto).

1.3 Interpretation (Quebec). For purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall be deemed to include “movable property,” (b) “real property” shall be deemed to include “immovable property,” (c) “tangible property” shall be deemed to include “corporeal property,” (d) “intangible property” shall be deemed to include “incorporeal property,” (e) “security interest,” “mortgage” and “lien” shall be deemed to include a “hypothec,” “prior claim” and a “resolutory clause,” (f) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code of Quebec, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset,” “right of setoff” or similar expression shall be deemed to include a “right of

 

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compensation,” (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary,” (k) “construction liens” shall be deemed to include “legal hypothecs,” (l) “joint and several” shall be deemed to include “solidary,” (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault,” (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary,” (o) “easement” shall be deemed to include “servitude,” (p) “priority” shall be deemed to include “prior claim,” (q) “survey” shall be deemed to include “certificate of location and plan,” (r) “fee simple title” shall be deemed to include “absolute ownership” and (s) “ground lease” shall be deemed to include “emphyteutic lease.” The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any applicable law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en langue anglaise seulement (sauf si une autre langue est requise en vertu d’une loi applicable).

1.4 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time (provided, that (i) notwithstanding anything to the contrary herein, all accounting or financial terms used herein shall be construed, and all financial computations pursuant hereto shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar effect) to value any Indebtedness or other liabilities of Holdings or any Subsidiary at “fair value”, as defined therein, and (ii) for purposes of determinations of the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio and the Interest Coverage Ratio, GAAP shall be construed as in effect on the Closing Date). In the event that any Accounting Change shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then upon the written request of Holdings or the Administrative Agent, Holdings, the Administrative Agent and the Lenders shall enter into good faith negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating Holdings’ financial condition shall be the same after such Accounting Change as if such Accounting Change had not occurred; provided, that such Accounting Change shall be disregarded for purposes of this Agreement until the effective date of such amendment. “Accounting Change” refers to (i) any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants, (ii) the adoption by Holdings of IFRS or (iii) any change in the application of accounting principles adopted by Holdings from time to time which change in application is permitted by GAAP. Notwithstanding anything to the contrary above or in the definitions of Capital Lease Obligations or Capital Expenditures, in the event of a change under GAAP (or the application thereof) requiring all or certain operating leases to be capitalized, only those leases that would result in Capital Lease Obligations or Capital Expenditures on the Closing Date (assuming for purposes hereof that they were in existence on the Closing Date) hereunder shall be considered capital leases hereunder and all calculations and deliverables under this Agreement or any other Loan Document shall be made in accordance therewith.

1.5 Pro Forma Calculations. (a) Notwithstanding anything to the contrary herein, the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.5; provided, that, notwithstanding anything to the contrary in clause (b), (c) or (d) of this Section 1.5, when calculating the Consolidated Fixed Charge Coverage Ratio for the purposes of determining actual compliance (not compliance on a Pro Forma Basis) with the Financial Covenant, the events described in this Section 1.5

 

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that occurred subsequent to the end of the applicable Test Period, other than consummation of the Transactions, shall not be given pro forma effect.

(b) For purposes of calculating the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio and the Interest Coverage Ratio, Pro Forma Transactions (and the incurrence or repayment of any Indebtedness in connection therewith) that have been made (i) during the applicable Test Period or (ii) subsequent to such Test Period and prior to or simultaneously with the event with respect to which the calculation of any such ratio is being made shall be calculated on a pro forma basis assuming that all such Pro Forma Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Pro Forma Transaction) had occurred on the first day of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into Holdings or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Pro Forma Transaction that would have required adjustment pursuant to this Section 1.5, then the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated to give pro forma effect thereto in accordance with this Section 1.5.

(c) Whenever pro forma effect is to be given to a Pro Forma Transaction, the pro forma calculations shall be made in good faith by a Responsible Officer of the Initial Borrower and shall include, without duplication, (i) the EBITDA (as determined in good faith by the Initial Borrower) of any Person or line of business acquired or disposed of, (ii) the Borrowing Base assets (as determined in good faith by the Initial Borrower and subject to the limits of the Acquired Asset Borrowing Base) attributable to any Person or line of business acquired or disposed of, and (iii) the adjustments to Consolidated EBITDA under clause (b)(x) of the definition of such term.

(d) In the event that Initial Borrower or any Restricted Subsidiary (i) incurs (including by assumption or guarantee) or (ii) repays, redeems, defeases, retires, extinguishes or is released from, or is otherwise no longer obligated in respect of (each, a “Repayment”), any Indebtedness included in the calculation of the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio or the Interest Coverage Ratio, as the case may be (in each case, other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes), (x) during the applicable Test Period or (y) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event with respect to which the calculation of any such ratio is being made, then the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated giving pro forma effect to such incurrence or Repayment of Indebtedness, to the extent required, as if the same had occurred on the last day of the applicable Test Period (it being understood and agreed that Consolidated Interest Expense of such Person attributable to interest on any Indebtedness bearing floating interest rates, for which pro forma effect is being given, shall be computed on a pro forma basis as if the rates that would have been in effect during the period for which pro forma effect is being given had been actually in effect during such periods).

1.6 Classification of Permitted Items.

(a) For purposes of determining compliance at any time with Sections 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.11 or 6.12, in the event that any Lien, Investment, Indebtedness, Disposition, Restricted Payment, Contractual Obligation, encumbrance or restriction or payment, prepayment, repurchase, redemption, defeasance or amendment, modification or other change in respect of Indebtedness meets the criteria of more than one of the categories of transactions permitted pursuant to any clause of such Sections 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.11 or 6.12, such transaction (or portion thereof) shall be permitted

 

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under one or more of such clauses as determined by the Initial Borrower in its sole discretion at, or substantially concurrent to, the time at which such transaction is consummated. For purposes of determining compliance at any time with Sections 6.2, 6.3 or 6.7, (i) any Indebtedness incurred under Section 6.2(o) may be reclassified, as the Initial Borrower elects from time to time, as incurred under Section 6.2(f) subject to a compliance with a Total Leverage Ratio determined on a Pro Forma Basis not to exceed 6.00:1.00 as of the date of determination, (ii) any Liens incurred under Section 6.3(v) may be reclassified, as the Initial Borrower elects from time to time, as incurred, with respect to Liens securing Indebtedness ranking pari passu with the Liens incurred under Section 6.3(t) above so long as the First Lien Net Leverage Ratio determined on a Pro Forma Basis does not exceed 5.25:1.00 as of the date of determination and (iii) Investments made under Section 6.7(s), as the Initial Borrower elects from time to time, as incurred under Section 6.7(t) so long as the Payment Conditions are satisfied as of the date of determination.

(b) Notwithstanding anything to the contrary herein, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that does not require compliance with a financial ratio (any such amounts or transactions, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio (including any Total Leverage Ratio or First Lien Leverage Ratio test) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to any substantially concurrent utilization of the Incurrence-Based Amounts.

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

1.8 Currency Equivalents Generally.

(a) Unless otherwise specifically set forth in this Agreement, monetary amounts are in US Dollars. Any amounts denominated or reported under a Loan Document in a currency other than US Dollars, including the Loans and Letters of Credit hereunder denominated in Canadian Dollars, shall, except as otherwise provided, be calculated based upon the US Dollar Equivalent thereof, as of the relevant date of determination. For the purposes of determining any threshold amount forming any part of any representation or warranty, covenant or Event of Default, all relevant amounts denominated in Canadian Dollars shall be calculated, as of such time of determination, at the US Dollar Equivalent thereof. For purposes of determining compliance with Sections 6.2, 6.3 and 6.7 with respect to any amount of Indebtedness or Investment in a currency other than US Dollars, no Default shall be deemed to have occurred solely as a result of changes in rates of currency exchange occurring after the time such Indebtedness or Investment is incurred, made or acquired (so long as such Indebtedness or Investment, at the time incurred, made or acquired, was permitted hereunder).

(b) For purposes of determining the Consolidated Fixed Charge Coverage Ratio, the Total Leverage Ratio, the First Lien Leverage Ratio, the Interest Coverage Ratio, Excess Availability (to the extent used to calculate 30-Day Excess Availability, Historical Excess Availability and other calculations for prior periods), 30-Day Excess Availability, Historical Excess Availability and Historical Average Utilization, amounts denominated in a currency other than US Dollars will be converted to US Dollars at the currency exchange rates used in preparing the Initial Borrower’s financial statements corresponding to the Test Period with respect to the applicable date of determination and will, in the case

 

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of Indebtedness, reflect the currency translation effects, determined in accordance with GAAP, of Hedge Agreements permitted hereunder for currency exchange risks with respect to the applicable currency in effect on the date of determination of the US Dollar Equivalent of such Indebtedness.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Revolving Credit Commitments. (a) Subject to the terms and conditions set forth herein, including Section 2.1(b) below, each Revolving Credit Lender severally agrees to make Revolving Credit Loans to the Initial Borrower or Additional Borrowers from time to time during the Availability Period in US Dollars or Canadian Dollars, as selected by the applicable Borrower, in an aggregate principal amount at any one time outstanding that will not (after giving effect to any concurrent use of the proceeds thereof to repay LC Disbursements in respect of Letters of Credit) result in (i) such Revolving Credit Lender’s Revolving Credit Exposure exceeding such Revolving Credit Lender’s Revolving Credit Commitment or (ii) the Total Revolving Credit Exposure exceeding Total Revolving Credit Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Initial Borrower or applicable Additional Borrower may borrow, repay, prepay and reborrow Revolving Credit Loans during the Availability Period. Notwithstanding anything herein to the contrary, Revolving Credit Loans may only be borrowed on the Closing Date to (i) pay consideration under the Purchase Agreement, (ii) pay Transaction Costs and/or (iii) fund the amount needed to fund any OID or upfront fees required to be funded on the Closing Date due to the exercise of the “Market Flex” provisions under the Fee Letter; provided that the aggregate amount drawn under the Revolving Credit Facility on the Closing Date shall not exceed $150.0 million (the “Closing Date Availability Amount”).

(b) Notwithstanding anything to the contrary in Section 2.1(a), but subject to Section 2.1(c), Revolving Credit Loans shall not be made (and shall not be required to be made) by any Lender in any instance where the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause (i) the Total Revolving Credit Exposure to exceed the Line Cap at such time, (ii) the Total Canadian Revolving Credit Exposure to exceed the Canadian Line Cap at such time or (iii) the Total US Revolving Credit Exposure to exceed the US Line Cap at such time.

(c) In the event that (i) any Borrower is unable to comply with the limitation set forth in Section 2.1(b) or (ii) such Borrower is unable to satisfy the conditions precedent to the making of Revolving Credit Loans set forth in Section 4.2, in either case, the Lenders, subject to the immediately succeeding proviso, hereby authorize the Administrative Agent, for the account of the Lenders, to make Revolving Credit Loans to such Borrower, in either case solely in the event that the Administrative Agent in its Permitted Discretion deems necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof, (B) to enhance the likelihood of repayment of the Obligations, or (C) to pay any other amount chargeable to any Borrower pursuant to the terms of this Agreement, including, without limitation, expenses and fees, which Revolving Credit Loans may only be made as ABR Loans (each, an “Agent Advance”) for a period commencing on the date the Administrative Agent first receives a Borrowing Request requesting an Agent Advance or otherwise makes an Agent Advance until the earlier of (x) the date such Borrower is again able to comply with the Borrowing Base limitations and the conditions precedent to the making of Revolving Credit Loans, or obtain an amendment or waiver with respect thereto, (y) the date that is 60 days after the funding of the initial Agent Advances and (z) the date the Required Lenders instruct the Administrative Agent to cease making Agent Advances or the Administrative Agent elects to cease making Agent Advances (in each case, the “Agent Advance Period”); provided that the Administrative Agent shall not make any Agent Advance to the extent that at the time of the making of such Agent Advance, the amount of such Agent Advance (I) when added to the aggregate outstanding amount of all other Agent Advances made to the Borrowers at such time, would exceed 10% of the Aggregate Borrowing Base at such time, or (II) when added to the Total

 

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Revolving Credit Exposure as then in effect (immediately prior to the incurrence of such Agent Advance), would exceed the Total Revolving Credit Commitments at such time. Agent Advances may be made by the Administrative Agent in its sole discretion and the Borrowers shall have no right whatsoever to require that any Agent Advances be made.

(d) On any Business Day (but in any event no less frequently than once per week), the Administrative Agent may, in its sole discretion give notice to the Lenders that the Administrative Agent’s outstanding Agent Advances shall be funded with one or more Borrowings of Revolving Credit Loans (provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under Section 7.1(f) or upon the exercise of any of the remedies provided in the last paragraph of Section 7.1), in which case one or more Borrowings of Revolving Credit Loans constituting ABR Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day by all Lenders pro rata based on each such Lender’s Applicable Percentage (determined before giving effect to any termination of the Revolving Credit Commitments pursuant to the last paragraph of Section 7.1) and the proceeds thereof shall be applied directly by the Administrative Agent to repay the Administrative Agent for such outstanding Agent Advances. Each Lender hereby irrevocably agrees to make Revolving Credit Loans upon one (1) Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Administrative Agent notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the minimum Borrowing amounts otherwise required hereunder, (ii) whether any conditions specified in Section 4 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing, (v) the amount of any Borrowing Base at such time, and (vi) whether such Lender’s Revolving Credit Commitment has been terminated at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to any Borrower), then each Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrowers on or after such date and prior to such purchase) from the Administrative Agent such participations in the outstanding Agent Advances as shall be necessary to cause the Lenders to share in such Agent Advances ratably based upon their respective Revolving Credit Commitments (determined before giving effect to any termination of the Revolving Credit Commitments pursuant to the last paragraph of Section 7.1); provided that (x) all interest payable on the Agent Advances shall be for the account of the Administrative Agent until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after the time any purchase of participations is actually made and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Lender shall be required to pay the Administrative Agent interest on the principal amount of the participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the overnight Federal Funds Effective Rate for the first three (3) days and at the interest rate otherwise applicable to Revolving Credit Loans maintained as ABR Loans hereunder for each day thereafter.

2.2 Loans and Borrowings. (a) Each Revolving Credit Loan shall be made as part of a Borrowing consisting of Revolving Credit Loans made by the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit 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.

(b) Subject to Section 2.13, each Revolving Credit Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan or ABR Loan by causing any

 

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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 applicable Lender to make such Loan and the obligation of the applicable Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an increment of, in the case of (i) ABR Loans, $500,000 or a whole multiple of $100,000 (or with respect to ABR Loans denominated in Canadian Dollars, CDN $500,000 or a whole multiple of CDN $100,000 in excess thereof) and (ii) Eurodollar Loans, $500,000 or a whole multiple of $500,000 in excess thereof (or with respect to Eurodollar Loans denominated in Canadian Dollars, CDN $500,000 or a whole multiple of CDN $500,000 in excess thereof); provided, that a Revolving Credit Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Revolving Credit Commitments under the Revolving Credit Facility or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.4(e). Borrowings of more than one Class may be outstanding at the same time; provided, that there shall not, at any time, be more than a total of twelve Eurodollar Borrowings outstanding.

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

2.3 Requests for Revolving Credit Borrowing. To request a Revolving Credit Borrowing, the applicable Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing (other than Eurodollar Borrowings to be incurred on the Closing Date which notice may be given not later than 11:00 a.m., New York City time, two Business Days prior to the Closing Date) or (b) in the case of an ABR Borrowing (including Agent Advances), not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery, facsimile or (subject to Section 9.1) email to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the applicable Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.2:

(i) the Borrower with respect to such Borrowing, including whether such Borrower is a Canadian Borrower or a US Borrower;

(ii) the currency and aggregate amount of the requested Borrowing;

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

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

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

(vi) the location and number of the account to which funds are to be disbursed, which shall comply with the requirements of Section 2.5;

(vii) the US Borrowing Base, the Canadian Borrowing Base and the Aggregate Borrowing Base at such time; and

 

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(viii) in the case of an ABR Borrowing, whether the Revolving Credit Loans made pursuant to such Borrowing constitute Agent Advances (it being understood that the Administrative Agent shall be under no obligation to make such Agent Advance).

If no election as to the Type of Revolving Credit Borrowing is specified, then the requested Revolving Credit Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration. If no currency is specified with respect to any Eurodollar Borrowing, then the applicable Borrower shall be deemed to have requested a Borrowing in US Dollars. Promptly following receipt of a Borrowing Request in accordance with this Section 2.3, the Administrative Agent shall advise each Revolving Credit Lender of the relevant Facility or Facilities of the details thereof and of the amount of such Revolving Credit Lender’s Loan to be made as part of the requested Revolving Credit Borrowing. Without in any way limiting the obligation of the Borrowers to confirm in writing any telephonic notice of any Borrowing or prepayment of Loans, the Administrative Agent may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, believed by the Administrative Agent in good faith to be from a Responsible Officer of the applicable Borrower, prior to receipt of written confirmation. In each such case, each Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice of such Borrowing or prepayment of Loans, as the case may be, absent manifest error.

2.4 Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, any Issuing Bank, in reliance on the agreements of the Revolving Credit Lenders set forth in Section 2.4(d) and otherwise herein, agrees to issue trade, commercial and standby Letters of Credit (which must be, in the case of any Letters of Credit issued by the Issuing Bank referenced in clause (a) of the definition thereof, denominated in US Dollars or, in the case of any Letters of Credit issued to any Canadian Borrower by the Issuing Bank referenced in clause (b) of the definition thereof, Canadian Dollars) for the account of the Initial Borrower or an Additional Borrower, or the account of such Borrower for the benefit of any Restricted Subsidiary so long as the Borrower and any Restricted Subsidiary are co-applicants and jointly and severally liable in respect of such Letter of Credit), on any Business Day during the Availability Period until the day that is five Business Days prior to the expiry of the Maturity Date in such form as may be approved from time to time by such Issuing Bank; provided, that no Issuing Bank shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the LC Exposure with respect to all Letters of Credit would exceed the LC Sublimit, (ii) the Total Revolving Credit Exposure would exceed the Line Cap at such time, (iii) the Total Canadian Revolving Credit Exposure would exceed the Canadian Line Cap at such time, (iv) the Total US Revolving Credit Exposure would exceed the US Line Cap at such time, or (v) solely with respect to each Lender on the Closing Date, the amount of the LC Exposure attributable to the Letters of Credit issued by such Lender in its capacity as an Issuing Bank would exceed the amount set forth opposite such Lender’s name on Schedule 2.4. Additionally, no Issuing Bank shall be under any obligation to issue or renew any Letter of Credit if the Letter of Credit is to be denominated in a currency other than US Dollars or Canadian Dollars. Additionally, (I) any Issuing Bank may, but shall not be obligated to, issue a Letter of Credit that supports the obligations of Holdings or any Loan Party or any of their respective Subsidiaries in respect of (A) a lease of real property, or (B) an employment contract, and (II) no Issuing Bank shall have any obligation to issue a Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any law applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit or request that such Issuing Bank refrain from the issuance of letters of credit generally or such Letter of Credit in particular or (B) the issuance of such Letter of Credit would violate one or more policies of general application of such Issuing Bank, now or hereafter applicable to letters of credit generally. Subject to the terms and conditions set forth herein, the applicable Borrower may request the

 

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issuance of Letters of Credit for its own account or for its own account for the benefit of any Restricted Subsidiary, in a form reasonably acceptable to the applicable Issuing Bank, at any time and from time to time during the Availability Period (but not later than the date that is five business days prior to the Maturity Date). In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the applicable Borrower to, or entered into by the applicable Borrower with, the applicable Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(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 applicable Borrower shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable Issuing Bank and the Administrative Agent (at least three Business Days (or such shorter period as may be agreed by the applicable Issuing Bank and the Administrative Agent) 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 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 2.4), the amount and currency of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by an Issuing Bank, the applicable Borrower also shall submit a letter of credit application (a “Letter of Credit Application”) on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the applicable Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (i) the LC Exposure with respect to all Letters of Credit shall not exceed the LC Sublimit, (ii) the Total Revolving Credit Exposure shall not exceed the Line Cap at such time, (iii) the Total Canadian Revolving Credit Exposure shall not exceed the Canadian Line Cap at such time and (iv) the Total US Revolving Credit Exposure shall not exceed the US Line Cap at such time. With respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit Application related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit 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 such time. Unless otherwise expressly agreed by the Issuing Bank and the Borrower, when a Letter of Credit is issued, the ISP Rules shall apply to each standby Letter of Credit and as to all matters not governed thereby, the laws of the State of New York.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, the date that is one year after the date of such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date (unless other provisions or arrangements reasonably satisfactory to the applicable Issuing Bank shall have been made with respect to such Letter of Credit). If the applicable Borrower so requests in any notice requesting the issuance of a Letter of Credit, the applicable Issuing Bank may, in its sole discretion, issue a Letter of Credit that has automatic renewal provisions (each, an “Auto Renewal Letter of Credit”). Once an Auto Renewal Letter of Credit has been issued, the applicable Revolving Credit Lenders shall be deemed to have authorized the renewal of such Letter of Credit at any time to an expiry date not later than the earlier of (i) the date that is one year from the date of such renewal (or such longer period as may be agreed by the applicable Issuing Bank pursuant to arrangements reasonably satisfactory to such Issuing Bank) and (ii) the date that is five Business Days prior to the Maturity Date (unless other provisions or arrangements reasonably satisfactory to the applicable Issuing Bank shall have been made with respect to such Letter of Credit); provided, that the applicable Issuing Bank shall not permit any such renewal if such Issuing Bank has

 

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determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 4.2 or otherwise).

(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 any Issuing Bank or the Lenders, the applicable Issuing Bank hereby grants to each Revolving Credit Lender and each Revolving Credit Lender hereby irrevocably acquires without recourse or warranty (regardless of whether the conditions set forth in Section 4.1 or 4.2 shall have been satisfied) and shall be deemed to have purchased from the applicable Issuing Bank, a participation in such Letter of Credit equal to such 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 Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Bank, such Revolving Credit Lender’s Applicable Percentage of each LC Disbursement with respect to a Letter of Credit made by such Issuing Bank, and, in each case, not reimbursed by the applicable Borrower on the date due as provided in paragraph (e) of this Section 2.4, or of any reimbursement payment required to be refunded to the applicable Borrower for any reason in respect thereof. Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit, and such Revolving Credit Lender’s obligations under Section 2.4(e) are absolute and unconditional and shall not be affected by any circumstance including (i) any setoff, counterclaim, recoupment, defense or other right that such Lender may have against the applicable Issuing Bank, the applicable Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 4, (iii) any adverse change in the condition (financial or otherwise) of the applicable Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrowers, any other Loan Party or any other Lender or any reduction in or termination of the Revolving Credit Commitments or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

(e) Reimbursement. If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the applicable Borrower shall reimburse such LC Disbursement by paying to the applicable Issuing Bank an amount and currency equal to such LC Disbursement in the same currency as the LC Disbursement not later than 2:00 p.m., New York City time, on the first Business Day immediately following the day that such Borrower receives notice that such LC Disbursement is made (or, if such Borrower receives such notice after 12:00 noon, New York City time, on the second Business Day immediately following the day that such Borrower receives such notice); provided, that (if the conditions of Sections 4.2(a), (b) and (d) are satisfied) the applicable Borrower shall have the absolute and unconditional right to require that such payment be financed with an ABR Borrowing, in each case in an equivalent amount and currency (subject to the requirements of set forth in Sections 2.4 through 2.6, as applicable) and, to the extent so financed, the applicable Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Revolving Credit Borrowing. If the applicable Borrower fails to make such payment when due, or finance such payment in accordance with the proviso to the preceding sentence, the applicable Issuing Bank shall promptly notify the Administrative Agent of the applicable LC Disbursement and the Administrative Agent shall promptly notify each Revolving Credit Lender of the applicable LC Disbursement, the payment then due from the applicable Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Credit Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the applicable Borrower by wire transfer of immediately available funds to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders not later than 2:00 p.m., New York City time, on the date such notice is received (or, if such Revolving Credit Lender shall have received such notice later than 12:00 noon, New York City time on such day, not later than 10:00 a.m., New York City time, on the immediately following Business Day), and the

 

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Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the applicable Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Revolving Credit Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Credit Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Credit Loans or Eurodollar Revolving Credit Loans as contemplated above) shall not constitute a Loan and shall not relieve the applicable Borrower of its obligation to reimburse such LC Disbursement. If any Revolving Credit Lender shall not have made its Applicable Percentage of an LC Disbursement available to the Administrative Agent as provided above, such Revolving Credit Lender, the Initial Borrower and, in the case of a Letter of Credit obtained by an Additional Borrower, such Additional Borrower severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with this Section 2.4(e) to but excluding the date such amount is paid, to the Administrative Agent for the account of the applicable Issuing Bank at (i) in the case of the Borrowers, a rate per annum equal to the interest rate applicable to ABR Revolving Credit Loans and (ii) in the case of such Revolving Credit Lender, (A) in the case of Letters of Credit denominated in US Dollars, for the first such day, the Federal Funds Effective Rate, and for each day thereafter, the Alternate Base Rate, and (B) in the case of Letters of Credit denominated in Canadian Dollars, the Canadian Prime Rate.

(f) Obligations Absolute. Each Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) and each Revolving Credit Lenders obligations under paragraphs (d) and (e) of this Section 2.4 shall be 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 Loan Document, or any term or provision therein, (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 the applicable 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 (iv) any Issuing Bank or any of its branches or Affiliates being the beneficiary of any Letter of Credit; (v) any Issuing Bank or any correspondent honoring a drawing against any Letter of Credit or any other document presented for purposes of drawing under any Letter of Credit up to the amount available under any Letter of Credit even if such drawing document claims an amount in excess of the amount available under the Letter of Credit; (vi) the occurrence of any Default or Event of Default, (vii) the existence of any claim, counterclaim, setoff, defense or other right that Holdings, any Borrower or any of their respective Subsidiaries may have at any time against any beneficiary, any assignee of proceeds, any Issuing Bank or any other Person or (viii) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.4, constitute a legal or equitable discharge of, or provide a right of setoff against, each Borrower’s obligations hereunder, whether against Issuing Bank or the beneficiary, or any other Person. None of the Administrative Agent, the Lenders or the Issuing Banks, or any of their respective Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or 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 consequence arising from causes beyond the control of the applicable Issuing Bank; provided, that the provisions of this Section 2.4(f) shall not be construed to excuse the applicable Issuing Bank from liability to any Borrower to the extent of any direct damages (as opposed to indirect, consequential, special and punitive damages, claims in respect of which are hereby waived by such Borrower to the extent permitted by applicable law) suffered by such Borrower that are caused by such

 

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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, bad faith or willful misconduct on the part of any Issuing Bank (as finally determined by a court of competent jurisdiction), the applicable 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 which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable 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.

(g) Disbursement Procedures. Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by such Issuing Bank. Each Issuing Bank shall promptly notify the Administrative Agent and the applicable Borrower by telephone (confirmed by facsimile or, in accordance with the second paragraph of Section 9.1, email) 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 the applicable Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then, unless the applicable 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 applicable Borrower reimburses such LC Disbursement, at the rate per annum equal to the Alternate Base Rate (in the case of Letters of Credit denominated in US Dollars) or the Canadian Prime Rate (in the case of Letters of Credit denominated in Canadian Dollars); provided, that, if the applicable Borrower fails to reimburse such LC Disbursement, including by requiring that such payment be financed with an ABR Revolving Credit Borrowing, pursuant to paragraph (e) of this Section 2.4, then Section 2.12(b) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section 2.4 to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i) Resignation or Replacement of Issuing Bank. An Issuing Bank may resign upon 30 days prior written notice to the Borrowers and the Administrative Agent. An Issuing Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Bank (provided, that no consent of the replaced Issuing Bank will be required if it has no Letters of Credit or Reimbursement Obligations with respect thereto outstanding) and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such resignation or replacement of such Issuing Bank. At the time any such resignation or replacement shall become effective, the Initial Borrower and any Additional Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.10(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the resignation or replacement of an Issuing Bank hereunder, the resigned or replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to renew existing Letters of Credit or issue additional Letters of Credit.

 

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(j) Cash Collateralization. If any Event of Default under clause (i) or (ii) of paragraph (f) of Section 7.1 with respect to Holdings or any Borrower shall occur and be continuing or if the Loans have been accelerated pursuant to Section 7 as a result of any Event of Default, on the Business Day that Holdings and the Borrowers receive notice from an Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50.0% of the total LC Exposure), in each case, demanding the deposit of cash collateral pursuant to this paragraph, the applicable Borrower, shall deliver cash collateral to the Administrative Agent, and the applicable Borrower hereby grants a security interest in such account in favor of the Administrative Agent, for the benefit of the Lenders and the Issuing Banks, an amount in cash equal to 103% of the applicable LC Exposure as of such date plus any accrued and unpaid interest thereon. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Letter of Credit obligations (including related fees and expenses) of the applicable Borrower under this Agreement. 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 in Cash Equivalents at the option and reasonable discretion of the Administrative Agent and at the applicable 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 released by the Administrative Agent and applied by the Administrative Agent to reimburse the applicable Issuing Bank for LC Disbursements for which it has not been reimbursed and to pay all fees and expenses relating to Letters of Credit that were not otherwise paid when due and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the applicable Borrower for the applicable LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of each Issuing Bank and Lenders with LC Exposure representing greater than 50.0% of the total LC Exposure), be applied to satisfy other obligations of such Borrower under this Agreement. If any Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default specified above, such amount (to the extent not applied as aforesaid) shall be returned to such Borrower within two Business Days after such Event of Default has been cured or waived (unless the Commitments have been terminated and the Obligations have been accelerated, in each case in accordance with Section 7.1).

(k) Provisions Related to Extended Revolving Credit Commitments. If the Maturity Date in respect of any tranche of Revolving Credit Commitments occurs prior to the expiration of any Letter of Credit, then (i) if one or more other tranches of Revolving Credit Commitments in respect of which the Maturity Date shall not have occurred are then in effect and such Letter of Credit would otherwise be available under such tranche of Revolving Credit Commitments, such Letters of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of the Revolving Credit Lenders to purchase participations therein and to make payments in respect thereof pursuant to Section 2.4(d) and (e)) under (and ratably participated in by Lenders pursuant to) the Revolving Credit Commitments in respect of such non-maturing tranches up to an aggregate amount not to exceed the aggregate amount of the unutilized Revolving Credit Commitments thereunder at such time (it being understood that no partial face amount of any Letter of Credit may be so reallocated) and (ii) to the extent not reallocated pursuant to immediately preceding clause (i), the applicable Borrower shall cash collateralize any such Letter of Credit in accordance with Section 2.4(j). For the avoidance of doubt, commencing with the Maturity Date of any tranche of Revolving Credit Commitments, the sublimit for Letters of Credit under any tranche of Revolving Credit Commitments that has not so then matured shall be as agreed in the relevant Permitted Amendment with the applicable Revolving Credit Lenders.

(l) Additional Provisions Regarding Letters of Credit. Without limiting any other provision of this Agreement, each Issuing Bank and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and such Issuing Bank’s rights and remedies

 

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against Borrowers and the obligation of Borrowers to reimburse such Issuing Bank for each drawing under each Letter of Credit shall not be impaired by:

(i) honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Letter of Credit or any document presented for purposes of drawing under any Letter of Credit that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such any Letter of Credit or any document presented for purposes of drawing under any Letter of Credit or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Letter of Credit or any document presented for purposes of drawing under any Letter of Credit or the form, accuracy, genuineness or legal effect of any Letter of Credit or any document presented for purposes of drawing under any Letter of Credit (other than such Issuing Bank’s determination that any document presented for purposes of drawing under any Letter of Credit appears on its face substantially to comply with the terms and conditions of the Letter of Credit);

(v) acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that such Issuing Bank in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrowers;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any any Letter of Credit or any document presented for purposes of drawing under any Letter of Credit be presented to it at a particular hour or place;

(ix) payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under applicable laws or letter of credit practices applicable to it;

(x) acting or failing to act as required or permitted under applicable laws or standard letter of credit practices applicable to where such Issuing Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by such

 

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Issuing Bank if subsequently such Issuing Bank or any court or other finder of fact determines such presentation should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by such Issuing Bank to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

(m) Limitation of Liabilities. The liability of any Issuing Bank (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers or the account party that are caused directly by such Issuing Bank’s gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit; provided that in determining whether to honor any drawing or under any Letter of Credit, the Issuing Bank shall be responsible only to the examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of the Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and conditions of such Letter of Credit or (iii) retaining a document presented for purposes of drawing under a Letter of Credit and which are presented under a Letter of Credit. Each Issuing Bank shall be deemed to have acted with due diligence and reasonable care if such Issuing Bank’s conduct is in accordance with applicable law and its standard letter of credit practices or in accordance with this Agreement. Borrowers’ aggregate remedies against any Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored any document presented for drawing under a Letter of Credit shall in no event exceed the aggregate amount paid by Borrowers to such Issuing Bank in respect of the honored presentation in connection with such Letter of Credit under Section 2.4(e), plus interest at the rate then applicable to ABR Loans hereunder. Borrowers shall take action to avoid and mitigate the amount of any damages claimed against any Issuing Bank or any other Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Letters of Credit. Any claim by Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct complained of; and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing the applicable Issuing Bank to effect a cure.

(m) Special Provisions Regarding Indemnification Relating to Letters of Credit. Each Borrower agrees to indemnify, defend and hold harmless each Agent and each Lender, any each Issuing Bank (including each Issuing Bank and its branches, Affiliates, and correspondents) and each such Person’s respective directors, officers, employees, attorneys and agents (each, including each Issuing Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any Letter of Credit Related Person (other than Taxes, which shall be governed by Section 2.16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result of this Agreement, any Letter of Credit, any document relating to any Letter of Credit which is executed and delivered or submitted in connection with such Letter of Credit or

 

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the making of any draw or disbursements thereunder or any document, certificate, or other writing referred to in or related to any Letter of Credit, or any action or proceeding arising out of any of the foregoing (whether administrative, judicial or in connection with arbitration); in each case, including that resulting from the Letter of Credit Related Person’s own negligence; provided, however, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence or willful misconduct of the Letter of Credit Related Person claiming indemnity. This indemnification provision shall survive termination of this Agreement and all Letters of Credit.

2.5 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 in the applicable currency by 12:00 p.m., 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 same-day ABR Revolving Credit Loans will be made by each Lender on the proposed date thereof by wire transfer of immediately available funds in the applicable currency by 2:00 p.m., New York City time; provided, further, that Revolving Credit Loans to be made on the Closing Date shall be made not later than 12:00 p.m., New York City time (or, if later, promptly following the satisfaction of the conditions precedent to the initial extension of credit hereunder set forth in Section 4.1). The Administrative Agent will make such Loans available to the applicable Borrower by promptly crediting the amounts so received, in like funds, to an account of the applicable Borrower maintained with the Administrative Agent in New York City or such other account reasonably approved by the Administrative Agent, in each case, as is designated by the applicable Borrower in the applicable Borrowing Request; provided, that ABR Revolving Credit Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.4(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank.

(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 2.5 and may, in reliance upon such assumption, make available to the applicable 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 applicable 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 such Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, (x) in the case of Loans denominated in US Dollars, 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 and (y) in the case of Loans in Canadian Dollars, the rate reasonably determined in accordance with customary practice by the Administrative Agent to be the cost to it of funding such amount, or (ii) in the case of the applicable Borrower, the interest rate applicable to ABR Loans of the applicable Class. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

2.6 Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request; provided, that, if the applicable Borrower fails to specify a Type of Loan in the Borrowing Request, then the Loans shall be made as ABR Loans and if the applicable Borrower requests a Borrowing of Eurodollar Loans, but fails to specify an Interest Period, it will be deemed to have requested an Interest Period of one month’s duration. Thereafter, the applicable Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in

 

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the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.6. The applicable 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.

(b) To make an election pursuant to this Section 2.6, the applicable Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.3 if the applicable Borrower were requesting a Revolving Credit 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, facsimile or other electronic transmission to the Administrative Agent of a written Interest Election Request signed by the applicable Borrower.

(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.2:

(i) the Borrower with respect to such Borrowing, including whether such Borrower is a Canadian Borrower or a US Borrower;

(ii) 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);

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

(iv) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(v) if the resulting Borrowing is a Eurodollar 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 Eurodollar Borrowing but does not specify an Interest Period, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration.

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

(e) If the applicable Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar 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. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the applicable Borrower, then, so long as an Event of Default is continuing (x) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (y) unless

 

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repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

2.7 Termination and Reduction of Commitments. (a) Unless previously terminated, the Revolving Credit Commitments shall terminate on the applicable Maturity Date. The commitments of the Issuing Banks to issue, amend, renew or extend any Letters of Credit shall automatically terminate on the earlier to occur of (i) the termination of the Revolving Credit Commitments and (ii) the date that is five Business Days prior to the applicable Maturity Date.

(b) The applicable Borrower may at any time terminate, without premium or penalty, or from time to time reduce, the Revolving Credit Commitments under the Revolving Credit Facility (or under any tranche of the Revolving Credit Commitments); provided, that (i) each reduction of the Revolving Credit Commitments shall be in an amount that is an integral multiple of $500,000 and not less than $1.0 million (or the remainder of such Revolving Credit Commitments) and (ii) in any event, the applicable Borrower shall not terminate or reduce the Revolving Credit Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.9, (x) the Total Revolving Credit Exposure would exceed the Line Cap at such time, (y) the Total Canadian Revolving Credit Exposure would exceed the Canadian Line Cap at such time or (z) the Total US Revolving Credit Exposure would exceed the US Line Cap at such time.

(c) The applicable Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Credit Commitments under the Revolving Credit Facility (or any tranche thereof) pursuant to paragraph (b) of this Section 2.7 at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the applicable Revolving Credit Lenders of the contents thereof. Each notice delivered by the applicable Borrower pursuant to this Section 2.7 shall be irrevocable; provided, that a notice of termination of the Revolving Credit Commitments delivered by the applicable Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or any other financing, sale or other transaction. Any termination or reduction of the Revolving Credit Commitments shall be permanent (but subject to any increase pursuant to Section 2.20). Each reduction of the Revolving Credit Commitments under the Revolving Credit Facility (other than any such reduction resulting from the termination of the Revolving Credit Commitment of any Lender as provided in Section 2.18) shall be made ratably among the Revolving Credit Lenders.

2.8 Repayment of Revolving Credit Loans; Evidence of Debt. (a) The applicable Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Revolving Credit Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender advanced to such Borrower on the applicable Maturity Date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the applicable Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the applicable Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

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(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section 2.8 shall be conclusive, absent manifest error, of the existence and amounts of the obligations recorded therein; provided, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the applicable Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request through the Administrative Agent that Loans made by it be evidenced by a promissory note. In such event, the applicable 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 the form of Exhibit G. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.4) be represented by one or more promissory notes in such form payable to the payee named therein (and its registered assigns).

2.9 Prepayment of Loans. (a) Each Borrower shall have the right at any time and from time to time to prepay any Borrowing made by it in whole or in part, without premium or penalty (but subject to Section 2.15), subject to prior notice in accordance with paragraph (c) of this Section 2.9.

(b) Prior to any optional or mandatory prepayment of Borrowings hereunder, the applicable Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (c) of this Section 2.9.

(c) The applicable Borrower shall notify the Administrative Agent by telephone (confirmed by facsimile or other electronic transmission) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment (or such later time and/or date as may be agreed by the Administrative Agent in its reasonable discretion), or (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 such later time and/or date as may be agreed by the Administrative Agent in its reasonable discretion). Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided, that any notice of prepayment may be conditioned upon the effectiveness of other credit facilities or any other financing, Disposition, sale or other transaction. Promptly following receipt of any such notice relating to a Borrowing, 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 2.2. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12. Each repayment of a Borrowing shall be applied to the Loans included in the repaid Borrowing such that each Revolving Credit Lender holding Loans included in such repaid Borrowing receives its ratable share of such repayment (based upon the respective Revolving Credit Exposures of the Revolving Credit Lenders holding Loans included in such repaid Borrowing at the time of such repayment).

2.10 Facility Fees. (a) The Initial Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender (other than any Defaulting Lenders) in accordance with its Applicable Percentage, a Facility Fee for the period from the Closing Date to but excluding the applicable Maturity Date (or such earlier date on which the Revolving Credit Commitments shall have expired or terminated) equal to the Facility Fee Rate divided by three hundred and sixty (360) days and multiplied by the number of days in the fiscal quarter and then multiplied by the amount, if any, by which the Average Revolving Credit Facility Balance with respect to the Revolving Credit Facility for such fiscal quarter (or portion thereof that the Revolving Credit Commitments are in effect) is less than the aggregate amount of the Revolving Credit Commitments; provided that if the Revolving Credit Commitments are terminated

 

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on a day other than the first day of a fiscal quarter, then any such fee payable for the fiscal quarter in which termination shall occur shall be paid on the effective date of such termination and shall be based upon the number of days that have elapsed during such period. The foregoing notwithstanding, in accordance with Section 2.20(b), the applicable lenders may consent to a different Facility Fee Rate to be paid pursuant to the terms of any applicable Incremental Facility Amendment or Extension Offer. Accrued Facility Fees shall be payable in arrears on the last Business Day of each March, June, September and December of each year and on the date on which the Revolving Credit Commitments terminate, commencing on September 30, 2016. All Facility Fees shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) (i) The Initial Borrower agrees to pay to the Administrative Agent for the account of each Revolving Credit Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at (x) in the case of standby Letters of Credit, the same Applicable Margin used to determine the interest rate applicable to Eurodollar Revolving Credit Loans and (y) in the case of trade or commercial Letters of Credit, 50.0% of the Applicable Margin used to determine the interest rate applicable to Eurodollar Revolving Credit Loans, in each case, on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Revolving Credit Commitment terminates and the date on which such Lender ceases to have any LC Exposure. Each Borrower, severally but not jointly, agrees to pay 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 (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable to the Letters of Credit issued by such Issuing Bank on account of such Borrower during the period from and including the Closing Date to but excluding the later of the date of termination of the Revolving Credit Commitments and the date on which there ceases to be any LC Exposure attributable to the Letters of Credit issued by such Issuing Bank, 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. Accrued participation fees and fronting fees under this paragraph (b) shall be payable in US Dollars on the last Business Day of each March, June, September and December of each year and on the date on which the Revolving Credit Commitments terminate, commencing on September 30, 2016; provided, that any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to any Issuing Bank pursuant to this paragraph shall be payable within 30 days after written demand therefor. 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 Initial Borrower agrees to pay to the Administrative Agent for its own account, the administrative agent fees with respect to the Revolving Credit Facility described in the Fee Letter.

(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Collateral Agent or the applicable Issuing Bank in the case of fees payable to it) for distribution, in the case of Facility Fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances (except as otherwise expressly agreed).

2.11 Mandatory Prepayments. (a) If for any reason, at any time (i) the Total Revolving Credit Exposure exceeds the Line Cap, (ii) the Total Canadian Revolving Credit Exposure exceeds the Canadian Line Cap or (iii) the Total US Revolving Credit Exposure exceeds the US Line Cap, the applicable Borrowers shall within one Business Day prepay Revolving Credit Loans and/or cash

 

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collateralize Letters of Credit (in accordance with Section 2.4(j)) in an aggregate amount equal to such excess.

(b) Amounts to be applied pursuant to this Section 2.11 shall be applied first to reduce outstanding ABR Loans of the applicable Class. Any amounts remaining after each such application shall be applied to prepay Eurodollar Loans of such Class. No permanent reduction of Revolving Credit Commitments will be required in connection with any prepayment pursuant to this Section 2.11.

2.12 Interest. (a) Subject to Section 9.16, each Loan shall bear interest at the Reference Rate plus the Applicable Margin.

(b) Following the occurrence and during the continuation of a Specified Default, the applicable Borrower shall pay interest on overdue amounts hereunder at a rate per annum equal to (i) in the case of overdue principal of, or interest on, any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.12 or (ii) in the case of any other overdue amount, 2.00% plus the rate applicable to ABR Loans in the applicable currency as provided in paragraph (a) of this Section 2.12.

(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Revolving Credit Commitments; provided, that (i) interest accrued pursuant to paragraph (b) of this Section 2.12 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 Credit Loan that is not made in connection with the termination or permanent reduction of Revolving Credit Commitments), 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 any Eurodollar 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.

(d) All interest hereunder shall be computed on the basis of a year of 360 days (or a 365- or 366-day year, as the case may be, in the case of ABR Loans based on the Prime Rate or the Canadian Prime Rate). The applicable Reference Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(e) Notwithstanding anything to the contrary in the foregoing clauses (a) and (b), and to the extent in compliance with Section 2.20 or 2.22, as applicable, Loans made pursuant to an Incremental Facility or extended in connection with an Extension Offer shall bear interest at the rate set forth in the applicable Permitted Amendment to the extent a different interest rate is specified therein.

(f) For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day year or any other period other than a calendar year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or the actual number of days in such period, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.

(g) If prohibited by applicable law, any provision of this Agreement that would oblige a Canadian Loan Party to pay any fine, penalty or rate of interest on any arrears of principal or interest secured by a mortgage on real property or hypothec on immovables that has the effect of

 

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increasing the charge on arrears beyond the rate of interest payable on principal money not in arrears shall not apply to such Canadian Loan Party, which shall be required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears.

(h) If any provision of this Agreement would oblige a Canadian Loan Party to make any payment of interest or other amount payable to any Secured Party in an amount or calculated at a rate which would result in a receipt by that Secured Party of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not so result in a receipt by that Secured Party of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:

(i) first, by reducing the amount or rate of interest; and

(ii) thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would constitute interest for purposes of section 347 of the Criminal Code (Canada).

2.13 Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar 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 or CDOR Rate, as applicable, for such Interest Period; or

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

then the Administrative Agent shall give notice thereof to the applicable Borrower and the Lenders by telephone, facsimile or other electronic communication as promptly as practicable thereafter and, until the Administrative Agent notifies the applicable 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 Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving Credit Borrowing, such Borrowing shall be made as, or converted to, an ABR Borrowing.

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

(i) subject the Administrative Agent, any Lender or any Issuing Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (f) of the definition of Excluded Taxes or (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

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

 

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(iii) impose on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense (excluding any condition, cost or expense relating to Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender (or in the case of clause (i) above, to the Administrative Agent, such Lender or such Issuing Bank, as the case may be) of making or maintaining any Eurodollar Loan (or in the case of clause (i) above, any Loan) (or of maintaining its obligation to make any such Loan) or to increase the cost to the Administrative Agent, such Lender or such Issuing Bank, as the case may be, of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, hereunder (whether of principal, interest or otherwise), the applicable Borrower will pay to the Administrative Agent, such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate the Administrative Agent, such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered; provided, in each case, that the Administrative Agent or such Lender or such Issuing Bank has requested such payments from similarly situated borrowers.

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

(c) A certificate of a Lender or an Issuing Bank setting forth in reasonable detail the matters giving rise to a claim under this Section 2.14 by such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.14 shall be delivered to the applicable Borrower and shall be conclusive absent manifest error. The applicable Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten Business Days after receipt thereof.

(d) Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section 2.14 shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided, that the Initial Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section 2.14 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the applicable Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

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(e) If any Lender reasonably determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Eurodollar Loans, or to determine or charge interest rates based upon the Adjusted LIBO Rate or the CDOR Rate, then, on notice thereof by such Lender to the applicable Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended until such Lender notifies the Administrative Agent and the applicable Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the applicable Borrower may at its option revoke any pending request for a borrowing of, conversion to or continuation of Eurodollar Loans and shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans. Upon any such prepayment or conversion, the applicable Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different lending office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise cause economic, legal or regulatory disadvantage to such Lender.

2.15 Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar 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 Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is conditional as contemplated by Section 2.9(c) and such condition is not satisfied) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the applicable Borrower pursuant to Section 2.18(b) or (c), then, in any such event, the applicable Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall consist of an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate (determined without regard to the proviso in the definition thereof) or the CDOR Rate, in each case, that would have been applicable to such Loan, 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 which 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 deposits of a comparable amount and in the same currency and period from other banks in the eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.15 shall be delivered to the applicable Borrower and shall be conclusive absent manifest error. Absent manifest error in the determination of such amount, the applicable Borrower shall pay such Lender the amount shown as due on any such certificate within ten Business Days after receipt thereof.

2.16 Taxes. (a) Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by Requirement of Tax Law. If the applicable Withholding Agent shall be required (as determined by such Withholding Agent in its good faith discretion) by Requirement of Tax Law to deduct or withhold any Taxes from such payments, then (i) in the case of deduction or withholding for Indemnified Taxes, the sum payable shall be increased by the applicable Loan Party as necessary so that after making all required deductions (including such deductions and withholdings applicable to additional sums payable under this Section 2.16(a)) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received

 

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had no such deductions or withholdings been made, (ii) the applicable Withholding Agent shall make or cause to be made such deductions or withholdings and (iii) the applicable Withholding Agent shall pay or cause to be paid the full amount deducted to the relevant Governmental Authority in accordance with Requirement of Tax Law.

(b) In addition, the applicable Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c) The Loan Parties shall jointly and severally indemnify the Administrative Agent, each Lender and each Issuing Bank, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.16) payable or paid by the Administrative Agent, such Lender or such Issuing Bank or required to be withheld or deducted from a payment to such Administrative Agent or Lender or Issuing Bank, as the case may be, 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. A certificate setting forth in reasonable detail the basis for such claim and the calculation of the amount of any such payment or liability shall be delivered to the Initial Borrower by a Lender (with a copy to the Administrative Agent) or an Issuing Bank (with a copy to the Administrative Agent) or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, and shall be conclusive absent manifest error. Notwithstanding the foregoing, no Loan Party described in clause (d) or (f) of the definition of Excluded Subsidiary shall indemnify the Administrative Agent, a Lender or an Issuing Bank for Taxes imposed with respect a US Borrower Obligation, and no assets that constitute Excluded Assets described in clause (8) of such defined term shall be applied to satisfy any such indemnification claim.

(d) As soon as practicable after any payment of Taxes by a Loan Party to a Governmental Authority pursuant to this Section 2.16, the 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.

(e) (i) Any Lender or Issuing Bank that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the applicable Borrower and the Administrative Agent, at the time or times reasonably requested by the applicable Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the applicable Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender or Issuing Bank, if reasonably requested by the applicable Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the applicable Borrower or the Administrative Agent as will enable the applicable Borrower or the Administrative Agent to determine whether or not such Lender or Issuing Bank is subject to 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(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s or Issuing Bank’s reasonable judgment such completion, execution or submission would subject such Lender or Issuing Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender or Issuing Bank.

(ii) Without limiting the generality of the foregoing,

 

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(A) any Lender or Issuing Bank that is a US Person shall deliver to the applicable Borrower and the Administrative Agent on or prior to the date on which such Lender or Issuing Bank becomes a Lender or Issuing Bank under this Agreement (and from time to time thereafter upon the reasonable request of the applicable Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender or Issuing Bank is exempt from US Federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the applicable Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender or Issuing Bank under this Agreement (and from time to time thereafter upon the reasonable request of the applicable Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, US Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, US Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the applicable Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, as applicable, a US Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a US Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the applicable Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender or Issuing Bank under this Agreement (and from time to time thereafter upon the reasonable request of the applicable Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as

 

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a basis for claiming exemption from or a reduction in US Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the applicable Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) If a payment made to a Lender or Issuing Bank under any Loan Document would be subject to US Federal withholding Tax imposed pursuant to FATCA if such Lender or Issuing Bank were to fail to comply with any requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender or Issuing Bank shall deliver to the applicable Borrower and the Administrative Agent, on or before the date it becomes a party to this Agreement and from time to time thereafter upon the request of the applicable Borrower and the Administrative Agent, such documentation prescribed by any Requirement of Tax Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the applicable Borrower or the Administrative Agent as may be necessary for the applicable Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine whether such Lender or Issuing Bank has or has not complied with such Lender’s or Issuing Bank’s obligations under FATCA and to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender and Issuing Bank agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the applicable Borrower and the Administrative Agent in writing of its legal inability to do so.

(f) Each Lender or Issuing Bank shall indemnify the Administrative Agent for the full amount of any Taxes imposed by any Governmental Authority that are attributable to such Lender or Issuing Bank (but only to the extent that an applicable Loan Party has not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the applicable Loan Parties to do so) and that are payable or paid by the Administrative Agent in connection with any Loan Document, together with all interest, penalties, reasonable costs and expenses arising therefrom or with respect thereto, as determined by the Administrative Agent in good faith, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Should the Administrative Agent not deduct or withhold any Taxes imposed by FATCA from a payment under any Loan Document based on the documentation provided by a Lender or Issuing Bank pursuant to Section 2.16(e)(ii), any amounts subsequently determined by a Governmental Authority to be subject to US Federal withholding Tax imposed pursuant to FATCA (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) shall be indemnified by such Lender or Issuing Bank. A certificate as to the amount of such payment or liability delivered to any Lender or Issuing Bank by the Administrative Agent shall be conclusive absent manifest error. Each Lender and each Issuing Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such Issuing Bank under any Loan Document or otherwise payable by the Administrative Agent to such Lender or such Issuing Bank from any other source against any amount due to the Administrative Agent under this Section 2.16(f).

(g) If the Administrative Agent or any Lender or Issuing Bank 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 by a Loan Party pursuant to this Section 2.16 or with respect to which a Loan Party has paid additional amounts pursuant to this Section 2.16, it shall pay over an amount equal to such refund to the applicable Loan Party within a reasonable period (but only to the extent of indemnity payments made, or

 

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additional amounts paid, by such Loan Party under this Section 2.16 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Administrative Agent or such Lender or Issuing Bank and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that such Loan Party, upon the request of the Administrative Agent or such Lender or Issuing Bank, agrees to repay the amount paid over to such Loan Party pursuant to this Section 2.16(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender or Issuing Bank in the event the Administrative Agent or such Lender or Issuing Bank is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.19(g), in no event will the Administrative Agent or such Lender or Issuing Bank be required to pay any amount to a Loan Party pursuant to this Section 2.16(g) the payment of which would place the Administrative Agent or such Lender or Issuing Bank in a less favorable net after-Tax position than the Administrative Agent or such Lender or Issuing Bank would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.16(g) shall not be construed to require the Administrative Agent or any Lender or Issuing Bank to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to any Loan Party or any other Person.

(h) Each party’s obligations under this Section 2.16 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

2.17 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) 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 1:00 p.m. New York City time), on the date when due, in immediately available funds, without set off 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 the Administrative Agent at its offices at Eleven Madison Avenue, New York, New York, except payments to be made directly to an Issuing Bank as expressly provided herein and except that payments pursuant to Section 2.14, 2.15, 2.16 or 9.3 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 payments received by it for the account of any other Person to the appropriate recipient recorded in the Register promptly following receipt thereof. If any payment under any Loan Document 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 of principal or interest in respect of any Loan (or of any breakage indemnity in respect of any Loan) shall be made in the currency of such Loan and, except as otherwise set forth in any Loan Document, all other payments under each Loan Document shall be made in US 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 (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC

 

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Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements 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 of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; 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 Borrowers pursuant to and in accordance with the express terms of this Agreement (including Sections 2.21(b) or (c), 2.23 and 2.25 or pursuant to the terms of any Permitted Amendment) 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 to any assignee or participant permitted under this Agreement. Each 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 such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the applicable Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or an Issuing Bank hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or an Issuing Bank, as the case may be, the amount due. In such event, if the applicable Borrower has not in fact made such payment, then each of the Lenders or an Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such 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 (i) 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 (in the case of an amount denominated in US Dollars) and (ii) the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount (in the case of an amount denominated in Canadian Dollars).

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(d) or (e), 2.5(b), 2.17(d) or 8.7, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

2.18 Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.14, or if a Borrower is required to pay any Indemnified Taxes or additional amount to any Lender or Issuing Bank or any Governmental Authority for the account of any Lender or Issuing Bank pursuant to Section 2.16, then such Lender or Issuing Bank shall use reasonable efforts to designate a different lending office for funding or booking its Loans or Letters of Credit hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the

 

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reasonable judgment of such Lender or Issuing Bank, such designation or assignment (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 or Issuing Bank to any unreimbursed cost or expense and would not otherwise cause economic, legal or regulatory disadvantage to such Lender or Issuing Bank. The applicable Borrower hereby agrees to pay all reasonable and documented out-of-pocket costs and expenses incurred by any Lender or Issuing Bank in connection with any such designation or assignment.

(b) If any Lender (or any Participant in the Loans held by such Lender) requests compensation under Section 2.14, or if a Borrower is required to pay any Indemnified Taxes or additional amount to any Lender (or its Participant) or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender, then the applicable Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, either (i) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.4), all its interests, rights and obligations under this Agreement (other than surviving rights to payments pursuant to Section 2.14 or 2.16) and the related Loan Documents to an assignee (other than a Disqualified Lender) that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, that (A) the applicable Borrower shall have received the prior written consent of the Administrative Agent and each Issuing Bank, to the extent consent for an Assignment and Assumption would be required by such Person pursuant to Section 9.4, which consent, in each case, shall not be unreasonably withheld, conditioned or delayed, (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the applicable Borrower (in the case of all other amounts) and (C) in the case of any such assignment 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, or (ii) so long as no Default or Event of Default shall have occurred and be continuing, terminate the Commitment of such Lender and repay all obligations of the Borrowers owing to such Lender relating to the Loans held by such Lender as of such termination date. A Lender shall not be required to make any such assignment and delegation, or to have its Commitments terminated and its obligations hereunder repaid, if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the applicable Borrower to require such assignment and delegation, or to terminate such Commitments and repay such obligations, cease to apply.

(c) If any Lender (such Lender, a “Non-Consenting Lender”) has failed to consent to a proposed amendment, waiver, discharge or termination which pursuant to the terms of Section 9.2 requires the consent of all of the Lenders or all affected Lenders or all Lenders or all affected Lenders of a certain Class or Classes or with respect to a certain Class or Classes of the Loans and with respect to which the Required Lenders with respect to the applicable Class or Classes shall have granted their consent, then the applicable Borrower shall have the right (unless such Non-Consenting Lender grants such consent) to either (i) replace such Non-Consenting Lender by requiring such Non-Consenting Lender to assign all or the affected portion of its Loans and its Commitments hereunder to one or more assignees reasonably acceptable to the Administrative Agent (other than a Disqualified Lender); provided, that (A) all Obligations (other than Obligations in respect of any Specified Hedge Agreements, Cash Management Obligations, contingent reimbursement and indemnification obligations, in each case, which are not due and payable) of the Borrowers owing to such Non-Consenting Lender being replaced shall be paid in full to such Non-Consenting Lender concurrently with such assignment, (B) the replacement Lender shall purchase the foregoing by paying to such Non-Consenting Lender a price equal to the principal amount thereof plus accrued and unpaid interest thereon, (C) in connection with any such assignment the Borrowers, such Non-Consenting Lender and the replacement Lender shall otherwise comply with Section 9.4 (including obtaining the consent of the Administrative Agent and

 

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each Issuing Bank if so required thereunder); provided, that, if the required Assignment and Assumption is not executed and delivered by such Non-Consenting Lender, such Non-Consenting Lender will be unconditionally and irrevocably deemed to have executed and delivered such Assignment and Assumption as of the date such Non-Consenting Lender receives payment in full of the Obligations (other than Obligations in respect of any Specified Hedge Agreements, Cash Management Obligations, contingent reimbursement and indemnification obligations, in each case, which are not due and payable) of the Borrowers owing to such Non-Consenting Lender, (D) the replacement Lender shall pay any processing and recordation fee referred to in Section 9.4(b)(ii)(C), if applicable, in accordance with the terms of such Section and (E) the replacement Lender shall grant its consent with respect to the applicable proposed amendment, waiver, discharge or termination, or (ii) so long as no Default or Event of Default shall have occurred and be continuing, terminate the Commitment of such Non-Consenting Lender and repay all obligations of the Borrowers owing to such Lender relating to the Loans held by such Non-Consenting Lender as of such termination date; provided, that such termination shall be sufficient (together with all other consenting Lenders) to cause the adoption of the applicable waiver or amendment of the applicable Loan Document or Loan Documents.

(d) Each Lender agrees that if it is replaced pursuant to this Section 2.18, it shall execute and deliver to the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative Agent any Note (if the assigning Lender’s Loans are evidenced by Notes) subject to such Assignment and Assumption; provided, that the failure of any Lender replaced pursuant to this Section 2.18 to execute an Assignment and Assumption or deliver such Notes shall not render such sale and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in the Register and the Notes shall be deemed cancelled upon such failure. Each Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Lender’s attorney-in-fact, with full authority in the place and stead of such Lender and in the name of such Lender, from time to time in the Administrative Agent’s discretion, with prior written notice to such Lender, to take any action and to execute any such Assignment and Assumption or other instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions of clause (b) or (c) of this Section 2.18.

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) Facility Fees shall cease to accrue on the unfunded portion of the Revolving Credit Commitment of such Defaulting Lender pursuant to Section 2.10(a);

(b) the Commitments and Aggregate Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or other requisite Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.2); 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 if such amendment, waiver or modification would adversely affect such Defaulting Lender compared to other similarly affected Lenders; provided, further, that no amendment, waiver or modification that would require the consent of a Defaulting Lender under clause (A)(1), (A)(2), (A)(3) or (C)(2) of the first proviso of Section 9.2(b) may be made without the consent of such Defaulting Lender;

(c) if any LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

 

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(i) all or any part of the 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 (A) the sum of all non-Defaulting Lenders’ Revolving Credit Exposure plus such Defaulting Lender’s LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Credit Commitments, (B) the Revolving Credit Exposure of each non-Defaulting Lender after giving effect to such reallocation does not exceed the Revolving Credit Commitment of such non-Defaulting Lender and (C) the conditions precedent in Sections 4.2(a), (b) and (d) are satisfied at such time;

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, each Borrower shall, within three Business Days following notice by the Administrative Agent, cash collateralize for the benefit of each applicable Issuing Bank in accordance with Section 2.4(j) only such 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 7.1 for so long as such LC Exposure is outstanding;

(iii) if a Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, such Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.10(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized except to the extent of such fees that became due and payable by such Borrower prior to the date such Lender became a Defaulting Lender (it being understood that any cash collateral provided pursuant to this Section 2.19(c) shall be released promptly following the termination of the Defaulting Lender status of the applicable Lender);

(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 Section 2.10(a) and Section 2.10(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages;

(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 any Issuing Bank or any other Lender hereunder, all fees payable under Section 2.10(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to each applicable Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized;

(d) so long as such Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless it is reasonably satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the applicable Borrower in accordance with Section 2.19(c), and participating interests in 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); and

(e) for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit, the Applicable Percentage of

 

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each non-Defaulting Lender with a Revolving Credit Commitment shall be computed without giving effect to the Revolving Credit Commitment, as applicable, of the Defaulting Lender.

In the event that the Administrative Agent, Holdings, each Borrower and each Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Credit Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders, if any, as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage, and such Lender shall then cease to be a Defaulting Lender with respect to subsequent periods unless such Lender shall thereafter become a Defaulting Lender.

2.20 Incremental Facilities. (a) At any time and from time to time, subject to the terms and conditions set forth herein, the Initial Borrower may, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy of such notice to each of the Lenders), request to incur one or more increases in the Revolving Credit Commitments (“Incremental Revolving Commitments” or the “Incremental Facilities”); provided, that on the date of each such request and except as otherwise provided below in Section 2.20(c), upon the effectiveness of each Incremental Facility Amendment, (i) no Default or Event of Default has occurred and is continuing or shall result therefrom, and (ii) the representations and warranties made by any Loan Party in or pursuant to the Loan Documents being true and correct in all material respects on and as of such date as if made on and as of such date, except for representations and warranties expressly stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (provided, that in each case such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified by materiality or “Material Adverse Effect”). Notwithstanding anything to the contrary herein, without the consent of the Required Lenders, the aggregate amount of the Incremental Facilities shall not exceed, at any time the greater of (i) $50.0 million and (ii) such amount as would not cause the Total Revolving Credit Commitments to exceed the Aggregate Borrowing Base by more than $50.0 million, in each case, as of the date of effectiveness of such Incremental Facility (after giving effect to any change in any Borrowing Base resulting from any acquisition or other transaction occurring substantially contemporaneously with such Incremental Facility). All Incremental Revolving Commitments shall be in an integral multiple of $1.0 million and in an aggregate principal amount that is not less than $5.0 million (or in such lesser minimum amount agreed by the Administrative Agent); provided, that such amount may be less than the applicable minimum amount if such amount represents all the remaining availability in respect of the Incremental Facilities.

(b) Any Incremental Revolving Commitment shall be on terms identical to the Revolving Credit Commitments, including with respect to having the same Guarantors and being secured by the same Collateral on a pari passu basis with all other Obligations, and, for the avoidance of doubt, such Incremental Revolving Commitment shall be deemed a Revolving Credit Commitment pursuant to the applicable Incremental Facility Amendment (it being understood that an Incremental Facility establishing Incremental Revolving Commitments will not create a separate Revolving Credit Facility and such Incremental Revolving Commitments be deemed a part of the Revolving Credit Facility); provided, that the Applicable Margin and the Facility Fee Rate, in each case applicable to the Revolving Credit Commitments and Revolving Credit Loans of such Revolving Credit Facility, may be increased, without the consent of any Lender, in connection with the incurrence of any Incremental Revolving Commitment such that the Applicable Margin and the Facility Fee Rate of such Revolving Credit Commitments are identical to those of the Incremental Revolving Commitments. With the consent of each applicable Issuing Bank, a portion of any Incremental Revolving Commitment may

 

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increase the LC Sublimit. A portion designated by the Initial Borrower of up to 30% of any Incremental Revolving Commitment may increase the Canadian ABL Sublimit.

(c) Each notice from any Borrower pursuant to this Section 2.20 shall set forth the requested amount of the relevant Incremental Revolving Commitments. Any Additional Lenders that elect to extend Incremental Revolving Commitments shall be reasonably satisfactory to Holdings and the Initial Borrower, and (unless such Additional Lender is already a Lender or an Affiliate of a Lender) the Administrative Agent and each Issuing Bank (in each case, any approval thereof not to be unreasonably withheld, delayed or conditioned), and, if not already a Lender, shall become a Lender under this Agreement pursuant to an Incremental Facility Amendment. Each Incremental Facility shall become effective pursuant to an amendment (each, an “Incremental Facility Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, the Borrowers, such Additional Lender or Additional Lenders and the Administrative Agent. No Incremental Facility Amendment shall require the consent of any Lenders or any other Person other than Holdings, the Initial Borrower, the Administrative Agent and the Additional Lenders with respect to such Incremental Facility Amendment. The Lenders hereby irrevocably authorize the Administrative Agent to enter into Incremental Facility Amendments and, as appropriate, amendments to the other Loan Documents as may be necessary in order to establish new tranches or sub-tranches in respect of the existing Revolving Credit Commitments and such technical amendments as may be necessary or appropriate in the opinion of the Administrative Agent, Holdings and the applicable Borrower to effect the provisions of this Section 2.20 (including to provide for class voting provisions applicable to the Additional Lenders on terms comparable to the provisions of Section 9.2(b)). No Lender shall be obligated to provide any Incremental Revolving Commitments, unless it so agrees. Commitments in respect of any Incremental Revolving Commitments shall become Commitments under this Agreement. The effectiveness of any Incremental Facility Amendment shall, unless otherwise agreed to by the Administrative Agent and the Additional Lenders party thereto, be subject to (i) the payment in full of all fees and expenses owing to the Administrative Agent and the Additional Lenders in respect of such Incremental Facility, to the extent invoiced prior to such date, and (ii) the satisfaction or waiver on the date of the effectiveness of the Incremental Revolving Commitments thereunder (each, an “Incremental Facility Closing Date”) of (x) the representations and warranties made by any Loan Party in or pursuant to the Loan Documents being true and correct in all material respects on and as of the Incremental Facility Closing Date as if made on and as of such date, except for representations and warranties expressly stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (provided, that in each case such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified by materiality or “Material Adverse Effect”; provided, further, that, notwithstanding anything in this Section 2.20 or Section 4.2(a) to the contrary, in connection with the effectiveness of any Incremental Revolving Commitments being used to fund all or a portion of a Limited Conditionality Transaction or the funding of Revolving Credit Loans or other extensions of credit to fund such Limited Conditionality Transaction in an amount not to exceed the amount of such Incremental Revolving Commitments (a “Specified Extension of Credit”), the only representations and warranties that will be required to be true and correct in all material respects as a condition to effectiveness of such Incremental Revolving Commitments as of the applicable Incremental Facility Closing Date or as a condition to the funding of such Specified Extension of Credit as of the date thereof (the “Specified Incremental Facility Funding Date”) shall be (a) the Specified Representations and (b) with respect to a Permitted Acquisition or other Investment permitted under Section 6.7, such of the representations and warranties made by or on behalf of the applicable acquired company or business (or the seller thereof) in the applicable acquisition agreement as are material to the interests of the Lenders, but only to the extent that Holdings or the Initial Borrower (or any Subsidiary of Holdings or the Initial Borrower) has the right to terminate the obligations of Holdings, the Initial Borrower or such Subsidiary under such acquisition agreement or not consummate such acquisition as a result of the inaccuracy of such representations or warranties in such acquisition agreement) and (y) no

 

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Event of Default having occurred and being continuing on the Incremental Facility Closing Date after giving effect to the Incremental Facility requested to be made on such date; provided, that notwithstanding anything in this Section 2.20 or Section 4.2(b) to the contrary, in the case of any Incremental Revolving Commitment being used to fund all or a portion of a Limited Conditionality Transaction, to the extent agreed to by the lenders and other investors providing such Incremental Facilities, the condition under this clause (ii)(y) or Section 2.20(a) to the effectiveness of such Incremental Revolving Commitment or under Section 4.2(b) to the making of any Specified Extension of Credit thereunder shall instead be no Specified Default having occurred and being continuing on the applicable Incremental Facility Closing Date or the applicable Specified Incremental Facility Funding Date, as the case may be, and after giving effect thereto. To the extent reasonably requested by the Administrative Agent, the effectiveness of an Incremental Facility Amendment may be conditioned on the Administrative Agent’s receipt of customary legal opinions with respect thereto, board resolutions and officers’ certificates and/or reaffirmation agreements consistent with those delivered on the Closing Date under Section 4.1, with respect to the Borrowers and the Restricted Subsidiaries. Upon each increase in the Revolving Credit Commitments pursuant to this Section 2.20, each Revolving Credit Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Incremental Revolving Commitment (each an “Incremental Revolving Lender”) in respect of such increase, and each such Incremental Revolving Lender will automatically and without further act be deemed to have assumed, a portion of such Revolving Credit Lender’s participations hereunder in outstanding Letters of Credit such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding participations hereunder in Letters of Credit held by each Revolving Credit Lender (including each such Incremental Revolving Lender) will equal the percentage of the aggregate Revolving Credit Commitments of all Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment. Each of the parties hereto hereby agrees that the Administrative Agent may, in consultation with the Initial Borrower, take any and all actions as may be reasonably necessary to ensure that, after giving effect to any Incremental Revolving Commitment, the outstanding Revolving Credit Loans are held by the Revolving Credit Lenders in accordance with their respective Applicable Percentages. The foregoing may be accomplished at the discretion of the Administrative Agent, following consultation with the Initial Borrower, (A) by requiring the outstanding Revolving Credit Loans to be prepaid with the proceeds of a new Revolving Credit Borrowing, (B) by causing non-increasing Revolving Credit Lenders to assign portions of their outstanding Revolving Credit Loans to new or increasing Revolving Credit Lenders, (C) by a combination of the foregoing or (D) by any other means agreed to by the Administrative Agent and the Initial Borrower, and any such prepayment or assignment shall be subject to Section 2.15 but shall otherwise be without premium or penalty. 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 any of the transactions effected pursuant to the immediately preceding sentence.

(d) Notwithstanding anything to the contrary in this Agreement, with respect to any Incremental Facility the proceeds of which are to be used by the Initial Borrower or any other Borrower Group Member to finance, in whole or in part, a Permitted Acquisition, other Investment permitted under Section 6.7 or a Specified Prepayment permitted under Section 6.8 (a “Limited Conditionality Transaction”), for purposes of determining (x) compliance with the Financial Covenant or any financial ratio, (y) accuracy of representations and warranties (other than Specified Representations which shall be accurate in all material respects as of the Incremental Facility Closing Date) or occurrence of a Default or Event of Default (other than a Specified Default), or (z) Excess Availability or availability under baskets (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets or based on the Payment Conditions), in each case, in connection with such Permitted Acquisition, Investment or Specified Prepayment, and any related incurrence of Indebtedness or Liens under Section 6.2, 6.3 or 6.10, the Initial Borrower shall have the option of making the applicable

 

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determinations under this Agreement as of the date the definitive agreement for such Permitted Acquisition or permitted Investment is executed, or the redemption or prepayment notice is given for such Specified Prepayment (and the applicable financial ratios, Excess Availability or basket shall be calculated as if the Limited Conditionality Transaction and other Pro Forma Transactions in connection therewith, were consummated on such date until consummated or terminated); provided that (i) Excess Availability is subject to the limits of the Acquired Asset Borrowing Base, if applicable, (ii) the foregoing clause (d) shall be not applicable for purposes of Section 4.2 (it being understood that the provisions of Section 2.20(c) shall be applicable to Sections 4.2(a) and (b)) and (iii) if the Initial Borrower elects to have such determinations occur as of the date such definitive agreement or redemption or prepayment notice, any related incurrence of Indebtedness or Liens shall be deemed to have occurred on such date and outstanding thereafter for purposes of subsequently calculating any ratios under this Agreement after such date and before the consummation of such Limited Conditionality Transaction and to the extent baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated Total Assets or Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or determining the permissibility of other transactions (not related to such Limited Conditionality Transaction) shall not reflect such Limited Conditionality Transaction until it is closed.

2.21 Cash Management.

(a) Holdings, the Borrowers and each other Loan Party shall, along with the Administrative Agent and certain financial institutions selected by the Loan Parties that are reasonably satisfactory to the Administrative Agent and located in the United States and Canada (the “Collection Banks”), enter into within 75 days after the Closing Date (or such longer period as the Administrative Agent may reasonably agree), and thereafter maintain, separate Cash Management Control Agreements with respect to all deposit accounts and securities accounts of such Loan Party (other than Exempt Accounts). Each Loan Party shall instruct all Account Debtors of such Loan Party to remit all payments to the applicable “P.O. Boxes” or “Lockbox Addresses” of the applicable Collection Bank (or to remit such payments to the applicable Collection Bank by electronic settlement) with respect to all Accounts of such Account Debtor which remittances shall be collected by the applicable Collection Bank and deposited in the applicable deposit account or securities account of the applicable Loan Party. All amounts received by any Loan Party and any Collection Bank, in respect of any Account, in addition to all other cash received from any other source (other than cash and Cash Equivalents maintained in Exempt Accounts or otherwise by Loan Parties not to exceed $4.5 million in the aggregate at any time), shall promptly upon receipt be deposited or swept into a Controlled Account. The Loan Parties shall instruct each Collection Bank for the applicable deposit accounts or securities accounts of such Loan Party (other than Exempt Accounts) that are not Controlled Accounts that the funds on deposit and available at the close of each Business Day in such account should be swept to a Concentration Account no less frequently than once every Business Day, subject to the procedures of such Collection Bank, such instructions to be irrevocable unless otherwise agreed to by the Administrative Agent.

(b) So long as no Dominion Period then exists, the Loan Parties shall be permitted to withdraw cash and Cash Equivalents from Controlled Accounts to be used for working capital and general corporate purposes. If a Dominion Period exists, all collected amounts held in the Controlled Accounts shall be applied as provided in Section 2.21(c).

(c) Each Cash Management Control Agreement relating to a Controlled Account shall (unless otherwise reasonably agreed by the Administrative Agent) include provisions that allow, during any Dominion Period, for all collected amounts held in such Controlled Account from and after the date requested by the Administrative Agent, to be sent by ACH or wire transfer or similar electronic transfer no less frequently than once per Business Day to one or more accounts maintained with the

 

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Administrative Agent (each, an “Administrative Agent Deposit Account”). Subject to the terms of the respective Security Document, during any Dominion Period, all amounts received in an Administrative Agent Deposit Account shall be applied (and allocated) by the Administrative Agent on a daily basis in the following order: (i) first, to the payment (on a ratable basis) of any outstanding expenses actually due and payable to the Administrative Agent under any of the Loan Documents and to repay or prepay outstanding Loans advanced by the Administrative Agent on behalf of the Lenders pursuant to Section 2.1(c); (ii) second, to the extent all amounts referred to in preceding clause (i) have been paid in full, to pay (on a ratable basis) all outstanding expenses actually due and payable to each Issuing Bank under any of the Loan Documents and to repay all outstanding unpaid LC Disbursements and all interest thereon; (iii) third, to the extent all amounts referred to in preceding clauses (i) and (ii) have been paid in full, to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Loans and all accrued and unpaid fees actually due and payable to the Administrative Agent, the Issuing Banks and the Lenders under any of the Loan Documents; (iv) fourth, to the extent all amounts referred to in preceding clauses (i) through (iii), inclusive, have been paid in full, to repay (on a ratable basis) the outstanding principal of Revolving Credit Loans (whether or not then due and payable); (v) fifth, to the extent all amounts referred to in preceding clauses (i) through (iv), inclusive, have been paid in full, to the cash collateralization (on a ratable basis) of all LC Exposure in accordance with Section 2.4(j); (vi) sixth, to the extent all amounts referred to in preceding clauses (i) through (v), inclusive, have been paid in full, to pay (on a ratable basis) all other outstanding Obligations then due and payable to the Administrative Agent, the Issuing Banks and the Lenders under any of the Loan Documents; and (vii) seventh, to the extent all amounts referred to in preceding clauses (i) through (vi), inclusive, have been paid in full and so long as no Specified Default then exists, to be returned to the Borrowers for the Borrowers’ own account. Notwithstanding the foregoing, in no event shall the cash collections from any Canadian Subsidiary be applied to any US Borrower Obligations.

(d) All costs and expenses to effect the foregoing (including reasonable legal fees and disbursements of counsel) shall be paid by the Loan Parties.

(e) Notwithstanding anything to the contrary in this Agreement or any Loan Document, to the extent that any Borrower Group Member or counterparty to a Hedge Agreement is required to post any margin or collateral under a Hedge Agreement as a result of any regulatory requirement, swap clearing organization rule, or other similar regulation, rule, or requirement,

(i) A Borrower Group Member shall be permitted to make payments of such margin or collateral to the counterparty in satisfaction of any such regulation, rule, or requirement; and

(ii) If any such counterparty posts any such margin or collateral with any Borrower Group Member, such margin or collateral shall not be subject to any cash trap, cash sweep, or other cash management provision or restriction in any Loan Document, save and except any pledge or assignment of such hedging agreement, with the express intention that the relevant Borrower Group Member shall be permitted to receive, return (including any return payment), or apply such margin or collateral in accordance with the relevant Hedge Agreement; provided, however, that such Borrower Group Member shall not use any such margin or collateral for any other purpose than in accordance with the relevant Hedge Agreement.

2.22 Extensions of Revolving Credit Commitments. (a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made from time to time by the Initial Borrower to all Lenders with Revolving Credit Commitments with a like maturity date on a pro rata basis (based on the aggregate outstanding principal amount of the Revolving Credit

 

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Commitments with a like maturity date) and on the same terms to each such Lender, the Initial Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Revolving Credit Commitments and otherwise modify the terms of such Revolving Credit Commitments pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable in respect of such Revolving Credit Commitments (and related outstandings)) (each, an “Extension”, and each group of Revolving Credit Commitments, as so extended, as well as the original Revolving Credit Commitments (not so extended), being a “tranche”; any Extended Revolving Credit Commitments shall constitute a separate tranche of Revolving Credit Commitments from the tranche of Revolving Credit Commitments from which they were extended), so long as the following terms are satisfied: (i) except as to pricing (including interest rates, fees and funding discounts), conditions precedent and maturity (which shall be set forth in the relevant Extension Offer), the Revolving Credit Commitment of any Revolving Credit Lender that agrees to an Extension with respect to such Revolving Credit Commitment (an “Extending Revolving Credit Lender”) extended pursuant to an Extension (an “Extended Revolving Credit Commitment”), and the related outstandings, shall be a Revolving Credit Commitment (or related outstandings, as the case may be) with the same terms as the original Revolving Credit Commitments (and related outstandings) (provided, that (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on Extended Revolving Credit Commitments (and related outstandings), (B) repayments required upon the Maturity Date of the non-extending Revolving Credit Commitments and (C) repayment made in connection with a permanent repayment and termination of commitments) of Loans with respect to Extended Revolving Credit Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Credit Commitments, (2) the permanent repayment of Revolving Credit Loans with respect to, and termination of, Extended Revolving Credit Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Credit Commitments, except that the applicable Borrower shall be permitted to permanently repay and terminate commitments of any such Class on a better than a pro rata basis as compared to any other Class with a later maturity date than such Class, (3) assignments and participations of Extended Revolving Credit Commitments and extended Revolving Credit Loans shall be governed by the same assignment and participation provisions applicable to Revolving Credit Commitments and Revolving Credit Loans and (4) at no time shall there be Revolving Credit Commitments hereunder (including Extended Revolving Credit Commitments and any original Revolving Credit Commitments) which have more than four different maturity dates), (ii) if the aggregate principal amount of Revolving Credit Commitments in respect of which Revolving Credit Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Revolving Credit Commitments offered to be extended by the Initial Borrower pursuant to such Extension Offer, then the Revolving Credit Loans of such Revolving Credit Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Revolving Credit Lenders have accepted such Extension Offer and (iii) all documentation in respect of such Extension shall be consistent with the foregoing.

(b) With respect to all Extensions consummated by the Initial Borrower pursuant to this Section 2.22, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of this Agreement and (ii) each Extension Offer shall specify the minimum amount of Revolving Credit Commitments to be tendered. The transactions contemplated by this Section 2.22 (including, for the avoidance of doubt, payment of any interest or fees in respect of any Extended Revolving Credit Commitments on such terms as may be set forth in the relevant Extension Offer) shall not require the consent of any Lender or any other Person (other than as set forth in clause (c) below), and the requirements of any provision of this Agreement (including Sections 2.9 and 2.17) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 2.22 shall not apply to any of the transactions effected pursuant to this Section 2.22.

 

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(c) No consent of any Lender or any other Person shall be required to effectuate any Extension, other than the consent of Holdings, the Initial Borrower (and such other Borrower, as applicable) and each Lender agreeing to such Extension with respect to one or more of its Revolving Credit Commitments (or a portion thereof) and each Issuing Bank, which consent shall not be unreasonably withheld, conditioned or delayed. All Extended Revolving Credit Commitments and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents (an “Extension Amendment”) with the applicable Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Revolving Credit Commitments so extended and such technical amendments as may be necessary or appropriate in the opinion of the Administrative Agent and the applicable Borrower to effect the provisions of this Section 2.22 (including in connection with the establishment of such new tranches or sub-tranches, or to provide for class voting provisions applicable to the Additional Lenders on terms comparable to the provisions of Section 9.2(b)). In addition, if so provided in such Extension Amendment and with the consent of the applicable Issuing Banks, participations in Letters of Credit expiring on or after the Maturity Date shall be re-allocated from Lenders holding Revolving Credit Commitments to Lenders holding Extended Revolving Credit Commitments in accordance with the terms of such Extension Amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Extended Revolving Credit Commitments, be deemed to be participation interests in respect of such Extended Revolving Credit Commitments and the terms of such participation interests (including the commission applicable thereto) shall be adjusted accordingly. Without limiting the foregoing, in connection with any Extension the respective Loan Parties shall (at their expense), within 90 days of the applicable Extension Amendment (or such later date as may be approved by the Administrative Agent), amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then Latest Maturity Date so that such maturity date is extended to the then Latest Maturity Date (or such later date as may be advised by local counsel to the Administrative Agent).

(d) In connection with any Extension, the Initial Borrower shall provide the Administrative Agent at least five Business Days (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably, to accomplish the purposes of this Section 2.22.

(e) Notwithstanding anything to the contrary above, at any time and from time to time following the establishment of a Class of Extended Revolving Credit Commitments, the Initial Borrower may offer any Lender with Revolving Credit Commitments that had been subject to an Extension Amendment (without being required to make the same offer to any or all other Lenders) who had not elected to participate in such Extension Amendment the right to convert all or any portion of its Revolving Credit Commitments into such Class of Extended Revolving Credit Commitments; provided, that (i) such offer and any related acceptance shall be in accordance with such procedures, if any, as may be reasonably requested by, or acceptable to, the Administrative Agent; (ii) such additional Extended Revolving Credit Commitments shall be on identical terms (including as to the proposed interest rates and fees payable, but excluding any arrangement, structuring or other fees payable in connection therewith that are not generally shared with the relevant Lenders) with the existing Extended Revolving Credit Commitments, (iii) any Lender which elects to participate in an Extension Facility pursuant to this clause (e) shall enter into a joinder agreement to the respective Extension Amendment, in form and substance reasonably satisfactory to the Administrative Agent and executed by such Lender, the

 

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Administrative Agent, Holdings, the Initial Borrower, and any applicable Additional Borrowers and (iv) any such additional Extended Revolving Credit Commitments shall be in an aggregate principal amount that is not less than $1.0 million (or, in the case of an outstanding Class with an entire outstanding principal amount of existing Revolving Credit Commitments less than a $1.0 million that is to be refinanced in full, such outstanding principal amount or commitments), unless each of the Initial Borrower and the Administrative Agent otherwise consents. Notwithstanding anything to the contrary contained herein, any Loans made as provided above shall be treated as part of the Class to which such Loans are added, and shall not constitute a new Class of new Extended Revolving Credit Commitments.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Arrangers, the Agents, the Lenders and the Issuing Banks to enter into this Agreement and to make the Loans and/or issue or participate in the Letters of Credit, Holdings and each Borrower hereby jointly and severally represent and warrant, subject on the Closing Date to the Limited Conditionality Provision, to each Arranger, each Agent and each Lender that:

3.1 Financial Condition. (a) (i) The pro forma combined balance sheet of Holdings as of the fiscal quarter ended March 31, 2016, in each case, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (including the notes thereto) and (ii) the related pro forma combined statements of income of Holdings for the periods referenced in subclause (x) and (y) of this Section 3.1(a), in each case prepared after giving effect to the Transactions (including the acquisitions referenced in clauses (iii) and (iv) of Section 3.1(b)) as if the Transactions (and the acquisitions referenced in clauses (iii) and (iv) of Section 3.1(b)) had occurred at the beginning of such date, copies of which have heretofore been furnished to the Administrative Agent, have been prepared in good faith based on information available to Holdings as of the date of delivery thereof and assumptions believed by the Initial Borrower to be reasonable when made and at the time so furnished, and present fairly in all material respects on a pro forma basis, in the case of (i) above, the estimated financial position of the Initial Borrower (after giving effect to the Transactions as described in clause (i) above) as at March 31, 2016, and, in the case of (ii) above, the estimated results of operations for the period covered thereby (after giving effect to the Transactions the acquisitions referenced in clauses (iii) and (iv) of Section 3.1(b)) as if the Transactions (and the acquisitions referenced in clauses (iii) and (iv) of Section 3.1(b)) had occurred at the beginning of such period.

(b) Each of (i) the GAAP (or in the case of the Targets, IFRS with reconciliation to GAAP) audited consolidated balance sheets as of December 31, 2015 and December 31, 2014 for Holdings and December 31, 2015, December 31, 2014 and December 31, 2013 for the Targets and related statements of income, stockholders’ equity and cash flows of each of Holdings and the Targets for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013 (and the related audit reports), (ii) the GAAP (or in the case of the Targets, IFRS) unaudited consolidated balance sheets as of March 31, 2016 and related statements of income and cash flows of each of Holdings and the Targets and statements of stockholders’ equity for the Targets for the fiscal quarter ended March 31, 2016 (and the corresponding period of the preceding fiscal year), (iii) audited consolidated balance sheets and related audited statements of operations, in each case prepared in accordance with GAAP, of Oxnard Building Materials, Inc. (Oxnard), Great Western Building Materials, Inc. (GWBM AZ) and ProWall Building Products, Inc. (ProWall), on a combined basis (“Great Western”), for the fiscal year ended December 31, 2014 and the period ended March 12, 2015 (and the related audit reports), (iv) audited consolidated balance sheets and related audited statements of operations, changes in stockholders’ equity and cash flows, in each case prepared in accordance with GAAP, of Gypsum Supply Co., an Illinois corporation, for the year ended December 31, 2014 and period ended December 30, 2015 (and the related audit reports) and (v) any financial statements delivered pursuant to Sections 5.1(a), 5.1(b) and 5.1(c), present fairly in all material respects the financial condition of (w) in the case

 

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of clauses (i) and (ii), Holdings and the Targets, (x) in the case of clause (iii), Great Western, (y) in the case of clause (iv), Gypsum Supply Co. and (z) in the case of clause (v), the Initial Borrower and its consolidated Subsidiaries, as at such date and for the period to which they relate, and the results of its operations, changes in stockholders’ equity and cash flows. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP (unless otherwise noted therein) applied consistently throughout the periods involved (except as disclosed therein).

3.2 No Change. Since the Closing Date, there has been no development or event, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.

3.3 Corporate Existence; Compliance with Law. Each of Holdings and each Group Member (a) is duly organized or, as the case may be, incorporated, validly existing and in good standing or in full force and effect under the laws of the jurisdiction of its organization (to the extent such concepts exist in such jurisdictions), (b) has the organizational power and authority, and the legal right, to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) in the case of any Domestic Subsidiary (or any Foreign Subsidiary organized in a jurisdiction where such concept exists), is duly qualified as a foreign organization and in good standing or in full force and effect under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except, in the case of the foregoing clauses (a) (solely with respect to Restricted Subsidiaries other than the Borrowers), (b), (c) and (d), as would not, in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

3.4 Organizational Power; Authorization; Enforceable Obligations. Each Loan Party has the corporate or other organizational power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrowers, to borrow hereunder. Each Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party. No material consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) consents, authorizations, filings and notices that have been obtained or made and are in full force and effect, (ii) the consents, authorizations, filings and notices described in Schedule 3.4, (iii) the filings referred to in Section 3.17, (iv) filings necessary to create or perfect Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties (including the corresponding filings under the Senior Secured Notes Documents and any Senior Secured Bridge Documents) and (v) those consents, authorizations, filings and notices the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each Loan Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

3.5 No Legal Bar. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law applicable to, or violate or result in a default under, any Contractual Obligation of Holdings or any Group Member, except, in each case, as would not have or reasonably be expected to have, individually or in the aggregate, a

 

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Material Adverse Effect and will not result in, or require, the creation or imposition of any Lien on any of their respective Properties or revenues pursuant to any such Requirement of Law or any such Contractual Obligation (other than Permitted Liens).

3.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Holdings or the Borrowers, threatened in writing by or against Holdings or any Group Member or against any of their respective properties or revenues (a) with respect to this Agreement or any of the other Loan Documents or any of the transactions contemplated hereby or thereby or (b) that would have or reasonably be expected to have a Material Adverse Effect (after giving effect to applicable insurance).

3.7 Ownership of Property; Liens. Each of Holdings and each Group Member has good title to, or a valid leasehold interest in, all real property and other Property material to the conduct of its business except where the failure to have such title or interests would not have or reasonably be expected to have a Material Adverse Effect. None of the Pledged Capital Stock is subject to any Lien except Permitted Liens.

3.8 Intellectual Property. Except as would not have or reasonably be expected to result in a Material Adverse Effect, (i) each of Holdings and each Group Member owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted (“Company Intellectual Property”); (ii) no claim has been asserted in writing and is pending by any Person challenging or questioning the use of any Company Intellectual Property or the validity or effectiveness of any Company Intellectual Property, nor do any of Holdings or the Borrowers know of any valid basis for any such claim; and (iii) to the knowledge of Holdings and the Borrowers, the use of Company Intellectual Property by Holdings and the Group Members does not infringe on the rights of any Person.

3.9 Taxes. Each of Holdings and each Group Member has timely filed or caused to be filed all Federal and non-US income and all state, provincial, territorial and other tax returns that are required to be filed and has timely paid or caused to be paid all Federal and non-US income and all state, provincial, territorial and other Taxes, assessments, fees and other governmental charges levied or imposed upon it or its Properties or income due and payable by it (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings or any of the Group Members, as the case may be), except, in each case, where the failure to do so would not have or reasonably be expected to have a Material Adverse Effect. To the knowledge of Holdings and the Borrowers, no material written claim has been asserted with respect to any Taxes (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings or the Group Members, as the case may be).

3.10 Federal Reserve Board Regulations. No part of the proceeds of any Loans will be used by Holdings, the Borrowers or any of their respective Subsidiaries for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If reasonably requested by the Administrative Agent on behalf of any Lender, the applicable Borrower will furnish to the Administrative Agent (for delivery to such Lender) a statement to the foregoing effect for the benefit of such Lender in conformity with the requirements of FR Form G-3 or FR Form U 1 referred to in Regulation U. On the Closing Date, “margin stock” (within the meaning of Regulation U) does not constitute more than 25.0% of the value of the consolidated assets of the Group Members.

 

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3.11 ERISA; Canadian Pension Plans. (a) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, (i) each Plan and, with respect to each Plan, any Loan Party or any Commonly Controlled Entity are in compliance in all material respects with the applicable provisions of ERISA and the Code, (ii)each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS indicating that such Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which would cause such Plan to lose its qualified status, (iii) none of the following events (each, an “ERISA Event”) have occurred: (A) a Reportable Event or the failure of any Loan Party or Commonly Controlled Entity to make by its due date a required installment under Section 430(j) of the Code with respect to any Single Employer Plan or any failure by any Single Employer Plan to satisfy the minimum funding standards (within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA) applicable to such Plan, whether or not waived, during the five year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan, and each Plan failing to comply in all material respects with the applicable provisions of ERISA and the Code, (B) termination of a Single Employer Plan or a Lien in favor of the PBGC or a Single Employer Plan, during such five-year period, (C) Holdings or any Commonly Controlled Entity has had, or is reasonably likely to have, a complete or partial withdrawal from any Single Employer Plan or Multiemployer Plan that has resulted or would reasonably be expected to result in a material liability under ERISA, (D) failure by any Loan Party or any Commonly Controlled Entity to make any required contribution to a Multiemployer Plan pursuant to Sections 431 or 432 of the Code, (E) there has been a determination that any Single Employer Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA), (F) to the knowledge of Holdings or the Borrowers, no Multiemployer Plan is Insolvent or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), (G) the receipt by any Loan Party or Commonly Controlled Entity from the PBGC or a plan administrator of any notice relating to an intention to terminate any Single Employer Plan or to appoint a trustee to administer any Single Employer Plan has not occurred, (H) the adoption of any amendment to a Single Employer Plan that would require the provision of security pursuant to Section 436(f) of the Code has not occurred and (I) a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in material liability to any Loan Party or any Commonly Controlled Entity has not occurred, and (iv) neither any Loan Party nor any Commonly Controlled Entity contributes to, or has any liability with respect to, any Multiemployer Plan or has any contingent liability with respect to any post-retirement welfare benefit under a Plan that is subject to ERISA, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) each Canadian Pension Plan that is required to be funded is fully funded on a going-concern and solvency basis using actuarial methods and assumptions in accordance with all Applicable Law and the terms of each such Canadian Pension Plan; (ii) no promises of benefit improvements under any Canadian Pension Plan have been made except where such improvement would not increase the liabilities of a Group Member in respect of a Canadian Pension Plan; (iii) all material obligations of each Borrower Group Member (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and the funding agreements therefor have been performed on a timely basis, and, without limiting the generality of the foregoing, all contributions or premiums required to be made or paid by each Group Member to any Canadian Pension Plan have been made or paid in a timely fashion in accordance with the terms of such Canadian Pension Plan and all Requirements of Law; (iv) all employee contributions to all Canadian Pension Plans by way of authorized payroll deduction or otherwise have been properly withheld or collected by and fully paid into such plans in a timely manner. There have been no improper withdrawals or applications of the assets of any Canadian Pension Plan; and (v) each Borrower Group Member’s sole obligation to or in respect of any Canadian Multiemployer Plan is to make monetary

 

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contributions to such plan in the amounts and in the manner set forth in the applicable collective agreement(s). No Group Member sponsors, maintains, contributes to, or otherwise has any liability or obligation in respect of, a Canadian Defined Benefit Plan.

3.12 Investment Company Act. No Loan Party is an “investment company” within the meaning of, or required to register under, the Investment Company Act of 1940.

3.13 Restricted Subsidiaries. (a) The Restricted Subsidiaries listed on Schedule 3.13(a) constitute all the Restricted Subsidiaries of Holdings as of the Closing Date. Schedule 3.13(a) sets forth as of the Closing Date the exact legal name (as reflected on the certificate of incorporation (or formation)) and jurisdiction of incorporation (or formation) of each Restricted Subsidiary of Holdings and, as to each such Restricted Subsidiary, the percentage and number of each class of Capital Stock of such Restricted Subsidiary owned by the Group Members.

(b) As of the Closing Date, except as set forth on Schedule 3.13(b), there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees, directors, managers and consultants and directors’ qualifying shares) of any nature relating to any Capital Stock of Holdings or any Restricted Subsidiary.

(c) As of the Closing Date, Holdings has no Unrestricted Subsidiaries.

3.14 Use of Proceeds. The proceeds of the Revolving Credit Loans shall be used (a) on the Closing Date, to (i) pay consideration under the Purchase Agreement, (ii) pay Transaction Costs and/or (iii) fund the amount needed to fund any OID or upfront fees required to be funded on the Closing Date due to the exercise of the “Market Flex” provisions under the Fee Letter; provided that the aggregate amount drawn under the Revolving Credit Facility on the Closing Date shall not exceed Closing Date Availability Amount and (b) from time to time thereafter, for general corporate purposes of the Group Members. The proceeds of any Loans under an Incremental Facility shall be used as specified in the relevant Incremental Facility Amendment. Letters of Credit shall be used solely to support payment and other obligations incurred in the ordinary course of business by Holdings and its Subsidiaries.

3.15 Environmental Matters. Except as would not have or reasonably be expected to have a Material Adverse Effect:

(a) each of Holdings and each Group Member: (i) is, and for the period of three years immediately preceding the Closing Date has been, in compliance with all applicable Environmental Laws; (ii) holds all Environmental Permits required for current operations at any property it owns, leases, or otherwise operates; and (iii) is in compliance with all Environmental Permits;

(b) Hazardous Materials have not been Released at, on, under or in any real property now or formerly owned, leased or operated by Holdings or any Group Member, or at any other location (including any location to which Hazardous Materials have been sent by Holdings or any Group Member for re-use, recycling, treatment, storage, or disposal) which would reasonably be expected to (i) give rise to the imposition of Environmental Liabilities on Holdings or any Group Member, or (ii) interfere with Holdings’ or any Group Member’s continued operations, or (iii) impair the fair saleable value of any real property owned by Holdings or any Group Member;

(c) there is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) pursuant to any Environmental Law to which Holdings or any Group Member is named as a party that is either pending or, to the knowledge of Holdings or any Group Member, threatened in writing;

 

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(d) neither Holdings nor any Group Member has received any written request for information, or been notified in writing that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law;

(e) neither Holdings nor any Group Member has entered or agreed to enter into any consent decree, order, or settlement, or is subject to any judgment, decree, order, or other agreement in any judicial, administrative, arbitral, or other forum for dispute resolution, in each case relating to compliance with Environmental Law or Environmental Liability; and

(f) neither Holdings nor any Group Member has assumed or retained by contract or operation of law any Environmental Liability of any other Person.

3.16 Accuracy of Information, Etc. No written information, report, financial statement, exhibit or schedule furnished by or on behalf of Holdings or any Group Member to any Agent or any Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto (as modified or supplemented by other information so furnished but excluding projected financial information (including the Projections) and information of a general economic, forward looking or industry-specific nature), when taken as a whole, contained or contains as of the date the same was or is furnished any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements contained therein, in the light of the circumstances under which they were or are made (after giving effect to all supplements and updates thereto), not materially misleading; provided, that to the extent any such information, report, financial statement, exhibit or schedule was based upon or constitutes a forecast, projection or other forward looking statement, each of Holdings and the Borrowers represents only that it acted in good faith based upon assumptions believed by management of Holdings or the Borrowers, as the case may be, to be reasonable at the time made and at the time furnished (it being understood that forecasts and projections by their nature are inherently uncertain, that actual results may differ significantly from the forecasted or projected results and that such differences may be material and no assurances are being given that the results reflected in the forecasts and projections will be achieved).

3.17 Security Documents.

(a) The US Guarantee and Collateral Agreement and each other US Security Document (other than any Mortgages) executed and delivered by a Loan Party is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid, binding and enforceable security interest in the Collateral described therein, except as enforceability may be limited by applicable Debtor Relief Laws and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). Subject to the terms of Section 5.9(d) and the delivery requirements of the Intercreditor Agreement and any other applicable intercreditor arrangements and except as otherwise provided under applicable Requirements of Law (including the UCC), in the case of (i) the Pledged Capital Stock described in the US Guarantee and Collateral Agreement, when any stock certificates representing such Pledged Capital Stock (and constituting “certificated securities” within the meaning of the UCC) are delivered to the Administrative Agent, (ii) Collateral with respect to which a security interest may be perfected only by possession or control, upon the taking of possession or control by the Administrative Agent of such Collateral, and (iii) the other personal property Collateral described in the Security Documents, when financing statements in appropriate form are filed in the appropriate filing offices, appropriate assignments or notices are filed in each applicable IP Office and such other filings as are specified by the US Guarantee and Collateral Agreement have been completed, the Lien on the Collateral created by the US Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral, as security for the Obligations, in each case prior to the Liens of any other Person (except Permitted Liens).

 

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(b) Each of the Mortgages executed and delivered by a Loan Party is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid, binding and enforceable Lien on the Mortgaged Properties described therein; and when the Mortgages are filed or recorded in the offices designated by Holdings, each Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged Properties described therein, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person (other than Persons holding Liens or other encumbrances or rights permitted by the relevant Mortgage or the Loan Documents, including Permitted Liens).

(c) Each of the Canadian Security Documents (other than any Mortgages) executed and delivered by a Loan Party is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid, binding and enforceable security interest in the Collateral described therein, except as enforceability may be limited by applicable Debtor Relief Laws and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). Subject to the terms of Section 5.9(d) and except as otherwise provided under applicable Requirements of Law (including the PPSA), when financing statements or equivalent materials in appropriate form are filed in the appropriate filing offices, the Lien on the Collateral created by each of the Canadian Security Documents shall constitute a fully perfected or opposable Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral, as security for the Obligations of such Loan Parties, in each case prior to the Liens of any other Person (except Permitted Liens).

3.18 Solvency. As of the Closing Date, after giving effect to the Transactions to be consummated on the Closing Date, Holdings and its Subsidiaries, on a consolidated basis, are Solvent.

3.19 Anti-Terrorism, -Money Laundering and -Corruption Laws. (a) To the extent applicable, each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto (“OFAC Regulations”), (ii) the PATRIOT Act, (iii) the Corruption of Foreign Public Officials Act (Canada) (“CFPOA”), (iv) Canadian Anti-Money Laundering Laws and (v) other anti-terrorism, -money laundering and -corruption laws promulgated by the federal government of the United States or Canada. No part of the proceeds of the Loans will be used by Holdings, the Borrowers or any of their respective Subsidiaries, directly or indirectly, in material violation of the OFAC Regulations, the PATRIOT Act, the FCPA, CFPOA or Canadian Anti-Money Laundering Laws.

(b) Neither Holdings nor any Group Member nor, to the knowledge of Holdings or the Initial Borrower, any director, officer, agent, employee or Affiliate of Holdings or any Group Member, (i) is a person on the list of “Specially Designated Nationals and Blocked Persons” or (ii) is currently subject to any US sanctions administered by the Office of Foreign Assets Control of the US Treasury Department (“OFAC”) or Canadian sanctions administered under Canadian Anti-Money Laundering Laws; and none of Holdings or any Group Member will directly or indirectly use the proceeds of the Loans or any Letter of Credit or otherwise knowingly make available such proceeds to any person, (x) for the purpose of financing the activities of any person currently subject to any US sanctions administered by OFAC, Canadian sanctions administered under Canadian Anti-Money Laundering Laws or (y) in any manner that would result in a violation by any Secured Party or Loan Party of any sanctions administered by the federal government of the United States or Canada.

3.20 Broker’s or Finder’s Commissions. No broker’s or finder’s fee or commission will be payable with respect to the execution and delivery of this Agreement and the other Loan Documents.

 

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3.21 Labor Matters. Except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, (a) there are no strikes, lockouts or slowdowns against Holdings or any Group Member pending or, to the knowledge of Holdings or the Borrowers, threatened, (b) the hours worked by and payments made to employees of Holdings or any Group Member have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, provincial, territorial, local or foreign law dealing with such matters and (c) all payments due from Holdings or any Group Member, or for which any claim may be made against Holdings or any Group Member, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of Holdings or any such Group Member. 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 to which Holdings or any Group Member is bound.

3.22 Borrowing Base Calculation. The calculation by any Borrower of each Borrowing Base in any Borrowing Base Certificate delivered to the Administrative Agent and the Collateral Agent and the valuation thereunder is complete and accurate in all material respects as of the date of such delivery.

3.23 Insurance. Each of the Loan Parties and each of their respective Subsidiaries and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of any Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar Properties in localities where such Person operates. A true and complete listing of such insurance, including issuers, coverages and deductibles, in all material respects, has been provided to the Administrative Agent as of the Closing Date.

3.24 Status as Senior Debt. The Obligations under the Loan Documents are “first lien debt” and “senior debt” or “designated senior debt” (or any comparable terms) under, and as may be defined in, any indenture or document governing any applicable Indebtedness that is subordinated in right of payment to such Obligations.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions to Closing Date. The agreement of each Lender and Issuing Bank to make the initial extension of credit requested to be made by it hereunder is subject to the satisfaction (or waiver in accordance with Section 9.2), prior to or concurrently with the making of such extension of credit on the Closing Date, of the following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have received this Agreement, the US Guarantee and Collateral Agreement, the Canadian Guarantee and Collateral Agreements and the Intercreditor Agreement, in each case, executed and delivered by each party thereto.

(b) Acquisition Transactions. The following transactions shall have been consummated, or shall be consummated substantially currently with the effectiveness of the Revolving Credit Commitments hereunder:

(i) The Acquisition shall have been consummated in accordance with applicable law and the terms of the Purchase Agreement (without any amendments, modifications, or waivers thereof, or consents thereunder, that are materially adverse to the interests of the Initial Borrower, the Lenders or the Arrangers (unless the Administrative Agent and the Arrangers have given their prior written consent (such consent not to be unreasonably withheld, delayed or conditioned); provided, with respect to any amendment to the Purchase Agreement requiring the consent of the Administrative

 

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Agent and the Arrangers, such consent shall be deemed given if the Administrative Agent or the Arrangers have not responded to such proposed amendment to the Purchase Agreement within four Business Days of being provided a copy of such amendment by Holdings or its counsel)); provided, that (A) a reduction by less than 15.0% in the consideration payable under the Purchase Agreement shall not be deemed to be materially adverse to the interests of the Initial Borrower, the Lenders or the Arrangers, and (B) any increase in the purchase price shall be deemed to be not materially adverse so long as such increase is funded solely by amounts permitted to be drawn under the Revolving Credit Facility or with proceeds of a contribution of cash to Holdings by way of subscription for shares (which shall in turn be contributed to the Initial Borrower by way of subscription for shares) (otherwise, any change in the purchase price of the Acquisition other than those described in clause (A) or (B) shall be deemed to be materially adverse to the interests of the Initial Borrower, the Lenders and the Arrangers).

(ii) The Equity Contribution shall have been made in an amount not less than the greater of (x) $50.0 million and (y) such amount as would cause the Total Leverage Ratio as of the Closing Date, after giving effect to the Transactions on a pro forma basis, not to exceed 5.30:1.00.

(iii) Either (i) the Initial Borrower shall have issued the Senior Secured Notes in a Rule 144A offering or other private placement in an aggregate principal amount of $575.0 million or (ii) if all or any portion of the Senior Secured Notes are not issued, the Initial Borrower will obtain Senior Secured Bridge Debt on the terms described in the Commitment Letter and the Fee Letter.

(iv) The Refinancing shall have been consummated.

(c) Financial Statements. The Administrative Agent shall have received (i) GAAP (or in the case of the Targets, IFRS with reconciliation to GAAP) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of each of Holdings and the Targets for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013 (and the related audit reports, which shall not be subject to any “going concern” qualifications), (ii) GAAP (or in the case of the Targets, IFRS with reconciliation to GAAP) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of each of Holdings and the Targets for the fiscal quarter ended March 31, 2016 (and the corresponding period of the preceding fiscal year), (iii) audited consolidated balance sheets and related audited statements of operations, in each case prepared in accordance with GAAP, of Great Western for the fiscal year ended December 31, 2014 (and the related audit reports), (iv) audited consolidated balance sheets and related audited statements of operations, changes in stockholders’ equity and cash flows, in each case prepared in accordance with GAAP, of Gypsum Supply Co. for the years ended December 31, 2014 and December 31, 2015 (and the related audit reports) and (v) the pro forma financial statements referred to in Section 3.1(a). The Administrative Agent shall also have received projections for Holdings and its Restricted Subsidiaries for each fiscal quarter of fiscal year 2016 and for each fiscal year to and including fiscal year 2019.

(d) Fees. All fees and expenses in connection with the Revolving Credit Facility (including reasonable out-of-pocket legal fees and expenses) payable by Holdings or the Borrowers to the Lenders, the Arrangers and the Agents on or before the Closing Date shall have been paid to the extent then due; provided, that all such amounts shall be required to be paid, as a condition precedent to the Closing Date, only to the extent invoiced at least one Business Day prior to the Closing Date.

 

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(e) Solvency Certificate. The Administrative Agent shall have received a solvency certificate in the form of Exhibit J from a Responsible Officer of Holdings with respect to the solvency of Holdings and its Subsidiaries, on a consolidated basis, after giving effect to the Transactions.

(f) Closing Certificate. The Administrative Agent shall have received a certificate of the Borrowers, dated the Closing Date confirming satisfaction of the conditions set forth in clauses (b), (j) and (m) of this Section 4.1, substantially in the form of Exhibit C, and including appropriate insertions and attachments.

(g) Other Certifications. The Administrative Agent shall have received the following:

(i) a copy of the charter or other similar Organizational Document of each Loan Party and each amendment thereto, certified (as of a date reasonably near the date of the initial extension of credit) as being a true and correct copy thereof by the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized or incorporated;

(ii) a copy of a certificate of the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized, dated reasonably near the date of the initial extension of credit, certifying that such Person is in good standing under the laws of such jurisdiction; and

(iii) a certificate of the Secretary, Assistant Secretary or other appropriate Responsible Officer of each Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws, or operating or partnership agreement of such Loan Party as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and, in the case of the Borrowers, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation, partnership agreement or other constitutive documents of such Loan Party have not been amended since the date the documents furnished pursuant to clause (i) above were certified, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party;

(h) Legal Opinions. The Administrative Agent shall have received the legal opinion of (i) Gibson, Dunn & Crutcher LLP, New York counsel to the Loan Parties, and (ii) each other legal opinion as set forth on Schedule 4.1(h), in each case in form and substance reasonably satisfactory to the Administrative Agent.

(i) Pledged Capital Stock; Stock Powers; Pledged Notes. Subject to the Limited Conditionality Provision and to the extent delivery thereof is required under the applicable Security Document and the Intercreditor Agreement, the Administrative Agent shall have received (i) the certificates representing the shares of Capital Stock pledged pursuant to any Security Document (if such shares are certificated), together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and such other documents as are required by the applicable Security Documents and (ii) each promissory note required to be delivered by the Loan

 

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Parties pursuant to any Security Document endorsed in blank or accompanied by an executed transfer form in blank (in each case to the extent delivery of such endorsements or transfer forms are customary under applicable Requirements of Law) by the pledgor thereof.

(j) No Material Adverse Effect. Since July 4, 2016, there shall not have occurred a Company Material Adverse Effect.

(k) Security Interests. The Administrative Agent shall have received a completed Perfection Certificate dated as of the Closing Date and signed by a Responsible Officer of Holdings and the Initial Borrower, together with all attachments contemplated thereby, the results of a search of the UCC, PPSA and any IP Office filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and the results of the tax lien searches and copies of the financing statements and any tax and judgment lien statements (or similar documents) disclosed by such searches and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements and tax and judgment lien statements (or similar documents) are permitted by Section 6.3. Subject to the Limited Conditionality Provision, each document, notice or acknowledgment (including any UCC or PPSA financing statement or any IP Security Agreement) required by the Security Documents to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Permitted Liens), shall have been filed, registered or recorded or shall have been delivered to the Administrative Agent in proper form for filing, registration or recordation.

(l) Know Your Customer and Other Required Information. The Administrative Agent and the Arrangers shall have received, no later than three Business Days prior to the Closing Date, all documentation and other information about the Loan Parties as has been reasonably requested in writing at least ten Business Days prior to the Closing Date by the Administrative Agent and the Arrangers with respect to applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and Canadian Anti-Money Laundering Laws.

(m) Representations and Warranties. The Specified Purchase Agreement Representations and the Specified Representations shall be true and correct in all material respects (or, in the case of any such representation that is qualified by materiality, in all respects) as of the Closing Date, except in the case of any Specified Purchase Agreement Representation or Specified Representation expressly stated to relate to a specific earlier date, in which case such Specified Purchase Agreement Representation or Specified Representation shall be true and correct in all material respects (or, in the case of any such representation that is qualified by materiality, in all respects) as of such earlier date. Notwithstanding anything to the contrary contained herein, to the extent any of the Specified Purchase Agreement Representations or the Specified Representations is qualified or subject to “material adverse effect” or “Material Adverse Effect”, the definition thereof shall be “Company Material Adverse Effect” for purposes of any such representations and warranties made or to be made on, or as of, the Closing Date.

(n) Insurance. Subject to the Limited Conditionality Provision, the Administrative Agent shall have received current insurance certificates with respect to the Loan Parties and setting forth the insurance maintained for the benefit of each of the Loan Parties, which shall meet the requirements set forth in Section 5.5 hereof and shall be endorsed or otherwise amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as applicable) and shall name the Administrative Agent, on behalf of the Secured Parties, as additional insured, in form and substance reasonably satisfactory to the Administrative Agent.

 

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(o) Borrowing Notice. Delivery of a Borrowing Request pursuant to Section 2.3

(p) Borrowing Base Certificate. Delivery of a Borrowing Base Certificate.

Notwithstanding anything to the contrary herein or otherwise, to the extent any Collateral (including the perfection of any security interest therein) or any insurance certificate or endorsement is not or cannot be provided on the Closing Date (other than (A) the pledge and perfection of security interests, to the extent required hereunder and under the US Guarantee and Collateral Agreement, in the Capital Stock of the Initial Borrower and the Subsidiaries of Holdings organized under the laws of the United States, Canada or any State, Province, Territory or other sub-division thereof with respect to which a Lien may be perfected by the delivery of a certificate representing such Capital Stock, if any, and which have been delivered to Holdings under the terms of the Purchase Agreement, (B) the pledge and perfection of security interests in Collateral with respect to which a Lien may be perfected by the filing of financing statements under the Uniform Commercial Code or the Personal Property Security Act in the office of the Secretary of State (or equivalent filing office of the relevant State, Province or Territory of the respective jurisdiction of organization of the Initial Borrower or any Guarantor) and (C) the pledge and perfection of security interests in Collateral consisting of Intellectual Property held by any Loan Party, with respect to which IP Security Agreements are required to be filed under the US Guarantee and Collateral Agreement or any Canadian Guarantee and Collateral Agreement), in each case after Holdings’ and the Initial Borrower’s use of commercially reasonable efforts to do so, then the providing of any such Collateral (or the perfection of any security interest therein) or such insurance certificate or endorsement shall not constitute a condition precedent to the availability of the Revolving Credit Facility on the Closing Date, but may instead be provided after the Closing Date in accordance with Section 5.14 (this paragraph, collectively, the “Limited Conditionality Provision”).

4.2 Conditions to Each Post-Closing Extension of Credit. The agreement of each Lender and any Issuing Bank to make any extension of credit requested to be made by it hereunder on any date (other than (w) the initial extensions of credit on the Closing Date (except with respect to the condition precedent specified in clause (d) below), and (x) Agent Advances, (y) a conversion of Loans to the other Type, or a continuation of Eurodollar Loans and (z) at the option of the Issuing Bank, any amendment, modification, renewal or extension of a Letter of Credit which does not increase the face amount of such Letter of Credit) is subject to the satisfaction of the following conditions precedent (except as otherwise set forth in Section 2.20(c)):

(a) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except for representations and warranties expressly stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (provided, that, in each case such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified by materiality or “Material Adverse Effect”).

(b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

(c) Borrowing Notice. Delivery of a Borrowing Request pursuant to Section 2.3.

(d) Borrowing Base Limitations. After giving effect thereto (and the use of the proceeds thereof):

 

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(i) the Total Revolving Credit Exposure would not exceed the Line Cap at such time;

(ii) the Total Canadian Revolving Credit Exposure at such time would not exceed the Canadian Line Cap at such time; and

(iii) the Total US Revolving Credit Exposure at such time would not exceed the US Line Cap at such time.

Each Borrowing of a Loan (other than a conversion of Loans to the other Type, or a continuation of Eurodollar Loans) by and issuance of a Letter of Credit on behalf of one or more Borrower hereunder shall constitute a representation and warranty by Holdings and such Borrower as of the date of such extension of credit that the conditions contained in this Section 4.2 have been satisfied. Notwithstanding the foregoing or anything else in this Agreement to the contrary, solely to the extent set forth in Section 2.20(c), in connection with any Limited Conditionality Transaction, (y) accuracy of representations and warranties (other than Specified Representations in connection with an acquisition, which shall be accurate in all material respects as of the closing date of such acquisition) or (y) occurrence of a Default or Event of Default, in each case, in connection with any Specified Extension of Credit may, at the option of the Initial Borrower, be determined as of the date the definitive agreement for such Permitted Acquisition or Investment is signed or the redemption notice is given.

SECTION 5. AFFIRMATIVE COVENANTS

The Borrowers hereby jointly and severally agree that, so long as any Commitments remain in effect, any undrawn and unexpired Letter of Credit remains outstanding (unless such Letter of Credit has been cash collateralized in a manner consistent with Section 2.4(j) or otherwise backed by another letter of credit in a manner reasonably satisfactory to the applicable Issuing Bank) or any Loan or other amount (excluding Obligations in respect of any Specified Hedge Agreements, Cash Management Obligations and contingent reimbursement and indemnification obligations that are not due and payable) is owing to any Lender, the Administrative Agent or any Arranger hereunder, each of the Borrowers shall and shall cause each of the Restricted Subsidiaries to:

5.1 Financial Statements. Furnish to the Administrative Agent for further delivery to the Collateral Agent and each Lender:

(a) within 90 days (or 120 days with respect to the fiscal year ending December 31, 2016) after the end of each fiscal year of the Initial Borrower, a copy of the audited consolidated balance sheets of the Initial Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income, stockholders’ (or members’) equity and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, all in reasonable detail and prepared in accordance with GAAP, reported on without a “going concern” qualification, or qualification as to the scope of the audit (other than any such qualification that is solely with respect to, or resulting solely from, (x) an upcoming maturity date under any of the Revolving Credit Facility, the Senior Secured Notes, any Senior Secured Bridge Debt, or any Refinancing Indebtedness with respect thereto, in each case occurring within one year from the time such report is delivered or (y) any potential inability to satisfy any financial maintenance covenant on a future date or in a future period), by Deloitte & Touche LLP or other independent certified public accountants of nationally recognized standing (such report, a “Satisfactory Auditor’s Report”);

(b) within 45 days (or 60 days with respect to the fiscal quarters ending June 30, 2016, September 30, 2016 and March 31, 2017) after the end of each of the first three quarterly periods

 

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of each fiscal year of the Initial Borrower, the unaudited consolidated balance sheets of the Initial Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income, stockholders’ (or members’) equity and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, all in reasonable detail and certified by a Responsible Officer as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Initial Borrower and its consolidated Subsidiaries in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes);

(c) (i) together with each set of consolidated financial statements referred to in Sections 5.1(a) and 5.1(b) above, the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) (which may be in footnote form only) from such consolidated financial statements, and (ii) together with each set of audited consolidated financial statements referred to in Section 5.1(a) above, a management discussion and analysis report, in reasonable detail, describing the operations and financial condition of the Borrower Group Members for the fiscal year then ended; and

(d) within ten Business Days after the required delivery of the consolidated financial statements referred to in Section 5.1(a) above, a conference call (which may be password protected) to discuss such report and the results of operations for the relevant reporting period (with the time and date of such conference call, together with all information necessary to access the call, to be provided to the Administrative Agent no fewer than three Business Days prior to the date of such conference call, for posting on the Platform); provided, that if requested by Required Lenders with respect to any fiscal quarter of the Borrower, the Administrative Agent may request that a conference call be held within ten Business Days after the required delivery of the consolidated financial statements referred to in Section 5.1(b) above with respect to such fiscal quarter.

Notwithstanding the foregoing, the obligations in clauses (a), (b) and (c) of this Section 5.1 may be satisfied with respect to financial information of the Initial Borrower and its Subsidiaries by furnishing (A) the applicable financial statements of any direct or indirect parent company of the Initial Borrower that directly or indirectly owns all of the Capital Stock of the Initial Borrower or (B) the Initial Borrower’s (or such direct or indirect parent’s) Form 10-K or 10-Q, as applicable, filed with the SEC; provided, that, with respect to each of clauses (A) and (B),(i) to the extent such information relates to a parent of the Initial Borrower, such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to the Initial Borrower (or such parent), on the one hand, and the information relating to the Initial Borrower and the Restricted Subsidiaries on a standalone basis, on the other hand (which consolidating information shall be certified by a Responsible Officer of the Initial Borrower as fairly presenting such information, unless such consolidating information is contained in the financial statements included in a Form 10-K or 10-Q filed with the SEC), and (ii) to the extent such information is in lieu of information required to be provided under Section 5.1(a), the consolidated financial statements included in the materials provided pursuant to the foregoing clause (A) or (B) are accompanied by a Satisfactory Auditor’s Report.

Any financial statements required to be delivered pursuant to this Section 5.1 shall not be required to contain all purchase accounting adjustments relating to the Transactions to the extent in the reasonable determination of the Initial Borrower it is not practicable to include any such adjustments in such financial statements, so long as the absence of such adjustments in the financial statements would not otherwise cause the Initial Borrower to fail to comply with obligations under the Loan Documents (including, for example, the obligation to deliver financial statements accompanied by an audit opinion meeting the requirements of Section 5.1(a)).

 

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5.2 Certificates; Other Information. Furnish to the Administrative Agent in each case for further delivery to each Lender, or, in the case of clause (f) or (g), to the relevant Lender:

(a) concurrently with the delivery of any financial statements pursuant to Sections 5.1(a) and 5.1(b) (or the annual or quarterly financial statements or Form 10-K or 10-Q, as applicable, referred to in clause (A) or (B) of the penultimate paragraph of Section 5.1), (i) a certificate of a Responsible Officer stating that such Responsible Officer has obtained no knowledge of any continuing Default or Event of Default, or if any such Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof and any action taken or proposed to be taken with respect thereto, (ii) a Compliance Certificate (which shall include calculations with respect to the Financial Covenant irrespective of whether a Compliance Period exists at such time) and (iii) solely with respect to the delivery of any financial statements pursuant to Section 5.1(a) (or the annual financial statements or Form 10-K referred to in clause (A) or (B) of the penultimate paragraph of Section 5.1), an updated Perfection Certificate, signed by a Responsible Officer of the Initial Borrower, (A) setting forth the information required pursuant to the Perfection Certificate and indicating any changes in such information from the most recent Perfection Certificate delivered pursuant to this clause (iii) (or, prior to the first delivery of a Perfection Certificate pursuant to this clause (iii), from the Perfection Certificate delivered on the Closing Date) or (B) certifying that there has been no change in such information from the most recent Perfection Certificate delivered pursuant to this clause (iii) (or, prior to the first delivery of a Perfection Certificate pursuant to this clause (iii), from the Perfection Certificate delivered on the Closing Date);

(b) as soon as available, and in any event no later than 90 days (or 120 days with respect to the fiscal year ending December 31, 2016) after the end of each fiscal year of the Initial Borrower, a consolidated budget in reasonable detail for the following fiscal year (including a projected consolidated balance sheet of the Initial Borrower and the Restricted Subsidiaries as of the end of the following fiscal year, and the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a statement of all material assumptions used in preparation of such budget) (collectively, the “Projections”), which Projections shall set forth such information on a quarterly basis and in each case be accompanied by a certificate of a Responsible Officer stating that such Projections are based on reasonable estimates, information and assumptions at the time made and at the time delivered (it being understood that the Projections are based upon good faith estimates and assumptions believed by management of the Initial Borrower to be reasonable at the time made and at the time delivered, it being recognized that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of management, and that no assurance can be given that any particular Projections will be realized and that variances from the Projections and the actual results during the period or periods covered by such Projections may be material);

(c) from and after the Closing Date, (i) unless clause (ii) below applies, not later than 5:00 P.M. (New York time) on or before the fifteenth (15th) Business Day of each fiscal month, (ii) during any period in which a Dominion Period is in effect, not later than 5:00 P.M. (New York time) on or before Friday of each week, (iii) at the Initial Borrower’s discretion, at the time of the consummation of a Permitted Acquisition (subject to the limits of the Acquired Asset Borrowing Base) and (iv) at the time of the consummation of a sale or other Disposition (including a sale of Accounts to a Permitted Receivables Financing Subsidiary) of, or any designation of a Restricted Subsidiary as an Unrestricted Subsidiary which holds, Borrowing Base assets with a value in excess of $10,000,000 (other than any Disposition of cash or Inventory in the ordinary course of business), a borrowing base certificate setting forth the US Borrowing Base, the Canadian Borrowing Base and the Aggregate Borrowing Base (in each case with supporting calculations in reasonable detail) substantially in the form of Exhibit L (each, a “Borrowing Base Certificate”), which shall be prepared as of the last Business Day of the preceding

 

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fiscal month in the case of each subsequent Borrowing Base Certificate (or, if any such Borrowing Base Certificate is delivered more frequently than monthly, as of the last Business Day of the week preceding such delivery). Each such Borrowing Base Certificate shall include such supporting information as may be reasonably requested from time to time by the Collateral Agent;

(d) (i) one (1) time during each fiscal year of the Initial Borrower (or, if Excess Availability is less than the greater of (A) $37.5 million and (B) 15.0% of the Line Cap, up to one (1) additional time during the succeeding twelve-month period), or (ii) at any time after an Event of Default has occurred and is continuing, as often as the Collateral Agent reasonably requests (x) an appraisal of the Inventory of the Qualified Loan Parties and (y) a collateral examination of the Inventory and Accounts of the Qualified Loan Parties, in each case, in scope and form, and conducted by the Collateral Agent or from a third-party appraiser and a third-party consultant, respectively, reasonably satisfactory to the Collateral Agent and at the sole cost and expense of the Initial Borrower. The Administrative Agent shall deliver to the Collateral Agent and each Lender, within five (5) days of receipt thereof, each final report delivered to the Administrative Agent pursuant to this clause (d);

(e) within ten days after the same are sent or made available, copies of all reports that Holdings or any Group Member sends to the holders of any class of its public equity securities and, promptly after the same are filed, copies of all reports or other materials that Holdings or any Group Member may make to, or file with, the SEC or any national securities exchange (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered to the Administrative Agent), exhibits to any registration statement and, if applicable, any registration statement on Form S-8), and in any case not otherwise required to be furnished to the Administrative Agent or the Lenders pursuant to any other clause of this Section 5.2, in each case only to the extent such reports are of a type customarily delivered by borrowers to lenders in syndicated loan financings; provided, that the Initial Borrower shall not be required to deliver copies of any such reports or other materials that have been posted on EDGAR;

(f) promptly after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act; and

(g) promptly, such additional financial and other information regarding the business, legal, financial or corporate affairs of any Borrower Loan Party or any Restricted Subsidiary, or compliance by any such Person with the terms of the Loan Documents to which it is a party, as the Administrative Agent may from time to time reasonably request (on its own behalf or on behalf of any Lender).

5.3 Payment of Obligations. Pay, discharge or otherwise satisfy before they become delinquent, as the case may be, all its obligations (other than Indebtedness), including Tax obligations, except (a) where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Initial Borrower or any Borrower Group Member, as the case may be, or (b) where the failure to pay, discharge or otherwise satisfy the same would not have or reasonably be expected to have a Material Adverse Effect.

5.4 Conduct of Business and Maintenance of Existence, Compliance with Laws, Etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or other organizational existence (it being understood, for the avoidance of doubt, that the foregoing shall not limit any change in form of entity or organization) and (ii) take all reasonable action to maintain all rights, privileges, franchises,

 

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permits and licenses necessary in the normal conduct of its business, except, in each case, as otherwise permitted by Section 6.4 and except (other than in the case of the preservation of existence of the Initial Borrower) to the extent that failure to do so would not have or reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations (other than any obligations under agreements or instruments relating to Indebtedness), applicable Requirements of Law (including ERISA and the PATRIOT Act, CFPOA and Canadian Anti-Money Laundering Laws) and all orders, writs, injunctions and decrees of any Governmental Authority applicable to it or to its business or property, except to the extent that failure to comply therewith would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

5.5 Maintenance of Property; Insurance. (a) (i) Except as would not have or reasonably be expected to have a Material Adverse Effect, keep all Property and systems necessary in its business in good working order and condition, ordinary wear and tear excepted and (ii) maintain with insurance companies the Initial Borrower believes to be financially sound and reputable insurance on all its Property in at least such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Initial Borrower and the Restricted Subsidiaries) and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same geographic regions by companies of similar size engaged in the same or a similar business.

(b) Within 60 days following the date hereof (subject to Section 5.14) and within 30 days following any date on which a new Grantor (as defined in the US Guarantee and Collateral Agreement) is added to the US Guarantee and Collateral Agreement or the date the relevant policy is obtained, cause the Administrative Agent to be named as additional insured on all general liability insurance policies (excluding, for the avoidance of doubt, directors and officers, worker’s compensation, health and benefit, and vehicle and similar liability policies) of such Grantor, and the Administrative Agent shall be named as loss payee on all property and casualty insurance policies of such Grantor with respect to Collateral (subject to the Intercreditor Agreement). The Grantors shall use commercially reasonable efforts to cause all such insurance (i) to provide that the relevant insurer shall endeavor to provide the Administrative Agent with at least 30 days prior notice of the cancellation of the relevant policy of insurance and (ii) if reasonably requested by the Administrative Agent, include a breach of warranty clause.

(c) If at any time the property upon which a structure is located is identified as a “special flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), the Initial Borrower shall obtain flood insurance covering the improvements and contents in an amount that is necessary to cover the estimated probable maximum loss or such other amount as the Collateral Agent may from time to time reasonably require and which flood insurance shall otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time.

5.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct in all material respects entries in conformity with GAAP and all material applicable Requirements of Law shall be made of all material dealings and transactions in relation to its business activities and (b) permit representatives of any Lender, upon reasonable prior notice, to visit and inspect any of its properties and examine and, at the Initial Borrower’s expense, make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired (subject to the immediately succeeding sentence) and to discuss the business, operations, properties and financial and other condition of the Initial Borrower and the Borrower Group Members with officers and employees of the Initial Borrower and the Borrower Group Members and with their respective independent certified public accountants (subject to such accountants’ policies

 

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and procedures). Notwithstanding the foregoing, so long as no Default or Event of Default has occurred and is continuing, such visits, inspections and examinations shall only be conducted by the Agents and shall be limited to one per fiscal year plus any additional visits in connection with Lender meetings (and only one time at the Borrower Loan Parties’ expense so long as no Default or Event of Default has occurred and is continuing). The Agents and the Lenders shall give the Initial Borrower the opportunity to participate in any discussions with the Initial Borrower’s independent public accountants. Notwithstanding anything to the contrary in this Section 5.6, neither the Initial Borrower nor any Borrower Group Member will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes trade secrets or proprietary information, (ii) in respect of which disclosure to any Agent or any Lender (or their respective representatives or contractors) is prohibited by any Requirement of Law or any binding agreement (and such prohibition is not created in contemplation of this Agreement) or (iii) is subject to attorney-client or similar privilege or constitutes attorney work product. For the avoidance of doubt, this Section 5.6 does not govern field examinations or inventory appraisals, which are governed by Section 5.2(d).

5.7 Notices. Promptly after (or, in the case of clause (c) or (e), within 30 days after) a Responsible Officer acquires knowledge thereof, give notice to each Agent and each Lender of:

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

(b) any litigation, investigation or proceeding which may exist at any time, that would have or reasonably be expected to have a Material Adverse Effect;

(c) the following events to the extent such events would have or reasonably be expected to have a Material Adverse Effect: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Single Employer Plan or Multiemployer Plan that would reasonably be expected to result in a Lien in favor of the PBGC or a Single Employer Plan or Multiemployer Plan, the creation of any Lien in favor of the PBGC or a Single Employer Plan or Multiemployer Plan or any withdrawal from, or the termination or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Initial Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination or Insolvency of, any Single Employer Plan;

(d) notice of the commencement of a Dominion Period or a Compliance Period; and

(e) any other development or event that has or would reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 5.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action (if any) the Initial Borrower or the relevant Borrower Group Member proposes to take with respect thereto.

5.8 Environmental Laws. (a) Comply in all respects with all applicable Environmental Laws, and obtain, maintain and comply with, any and all Environmental Permits, except to the extent the failure to so comply with Environmental Laws or obtain, maintain, or comply with Environmental Permits would not have or reasonably be expected to have a Material Adverse Effect.

(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other corrective actions required pursuant to Environmental Laws and promptly comply in all respects with all lawful orders and directives of all Governmental Authorities regarding

 

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any violation of or non-compliance with Environmental Laws and any Release or threatened Release of Hazardous Materials, except, in each case, to the extent the failure to do so would not have or reasonably be expected to have a Material Adverse Effect.

5.9 Additional Collateral, Etc. (a) Subject to Section 5.9(d), with respect to any personal Property (other than Excluded Assets) acquired or created (including by the filing of any applications for the registration or issuance of any Intellectual Property or by the filing of any “statements of use” or “amendments to allege use” with respect to any intent-to-use trademark or service mark applications) after the Closing Date (i) by any existing US Loan Party, no later than the next date of delivery of financial statements pursuant to Section 5.1(a) or 5.1(b) covering a period that includes the date of such acquisition or creation of such Property following the date of such acquisition or creation of such Property (subject, in each case, to any specific time frame established in the relevant Loan Documents) (or such later date as may be agreed by the Administrative Agent), (x) execute and deliver to the Administrative Agent such amendments to the US Security Documents (including schedules thereto) or such other documents as the Administrative Agent may reasonably request to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such Property and (y) take all actions reasonably necessary (as determined by the Initial Borrower in good faith) to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest (subject to First Priority Priming Liens) in such Property to the extent required under the US Security Documents, including the filing of IP Security Agreements, UCC financing statements or PPSA financing statements in such United States or Canadian jurisdictions as may be required by the US Security Documents, or (ii) by any existing Canadian Loan Party, no later than the next date of delivery of financial statements pursuant to Section 5.1(a) or 5.1(b) covering a period that includes the date of such acquisition or creation of such Property following the date of such acquisition or creation of such Property (subject, in each case, to any specific time frame established in the relevant Loan Documents) (or such later date as may be agreed by the Administrative Agent), (x) execute and deliver to the Administrative Agent such amendments to the Security Documents (including schedules thereto) or such other documents as the Administrative Agent may reasonably request to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such Property and (y) take all actions reasonably necessary (as determined by the Initial Borrower in good faith) to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest (subject to Permitted Liens) in such Property (and in the case of Property constituting Revolving Priority Collateral, a perfected first priority security interest (subject to First Priority Priming Liens)) to the extent required under the Security Documents, including the filing of UCC financing statements or PPSA financing statements in such United States or Canadian jurisdictions as may be required by the Security Documents.

(b) With respect to any fee interest in any real property (other than Excluded Assets) acquired after the Closing Date by any Loan Party, as soon as reasonably practicable and in any case on or prior to 90 days after such acquisition or such later date as the Administrative Agent shall reasonably agree (i) execute and deliver a Mortgage (subject to the Intercreditor Agreement and Permitted Liens), in favor of the Administrative Agent, for the benefit of the Secured Parties, covering such real property, (ii) provide the Administrative Agent for the benefit of the Secured Parties with (x) a title insurance policy with extended coverage covering such real property in an amount equal to the then-applicable fair market value of such real property (provided, that if no current ALTA survey is requested by the Administrative Agent, the title policy may contain a general exception for matters that would be shown by a survey), as well as (y) a current ALTA survey thereof, together with a customary surveyor’s certificate if such ALTA survey is reasonably requested by the Administrative Agent; provided, that no ALTA survey shall be required in connection with any Mortgage for which the Borrower Loan Parties deliver a title insurance policy that does not contain a general exception for matters that would be shown by a survey, (iii) deliver to the Administrative Agent legal opinions of local counsel in the jurisdiction where the Loan Party that owns such Mortgaged Property is located, in form and substance reasonably

 

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acceptable to the Administrative Agent and its counsel, and (iv) if such Mortgaged Property is required to be insured pursuant to the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of 1968, and the regulations promulgated thereunder because improvements on such Mortgaged Property are located in an area which has been identified by the director of the Federal Emergency Management Agency as a “special flood hazard area”, provide to the Administrative Agent (A) evidence of a policy of flood insurance that (1) covers such improvements and (2) is written in an amount reasonably satisfactory to the Administrative Agent (not to exceed 100% of the value of such improvements and the contents thereof as reasonably determined) and (B) a confirmation that the applicable Loan Party has received the notice requested pursuant to Section 208.25(i) of Regulation H of the Board.

(c) With respect to (x) any new Restricted Subsidiary that would constitute a Subsidiary Guarantor within the meaning of that term created or acquired after the Closing Date (other than an Excluded Subsidiary) or (y) any previous Excluded Subsidiary that ceases to constitute an Excluded Subsidiary pursuant to the definition of such term (including any Immaterial Subsidiary that ceases to constitute an Immaterial Subsidiary or that has been designated by the Initial Borrower to no longer constitute an Immaterial Subsidiary in order to comply with the proviso to the definition thereof) (each such Person, a “Subsequent Required Guarantor”), in each case no later than the next date of delivery of financial statements pursuant to Section 5.1(a) or 5.1(b) following the date such Person becomes a Subsequent Required Guarantor covering a period that includes such date (i) execute and deliver to the Administrative Agent such amendments to the Security Documents (including schedules thereto) as the Administrative Agent reasonably deems necessary to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected third priority security interest (subject to Permitted Liens) in the Capital Stock of such Subsequent Required Guarantor (other than to the extent constituting Excluded Assets), (ii) deliver to the Administrative Agent (x) the certificates, if any, representing such Capital Stock of such Subsequent Required Guarantor constituting certificated securities under the UCC, together with undated stock powers, in blank, to the extent necessary to perfect the Administrative Agent’s security interests therein, and (y) any note, instrument or debt security in favor of such Subsequent Required Guarantor, endorsed in blank or accompanied by an executed transfer form in blank, in each case executed and delivered by a duly authorized officer of such Subsequent Required Guarantor, in each case to the extent required by the Security Documents (in each case to the extent delivery of such endorsements or transfer forms are customary under applicable Requirements of Law), (iii) cause such Subsequent Required Guarantor (A) to become a party to the applicable Security Documents and (B) to take such actions necessary to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest (subject to Permitted Liens) in the Collateral described in the applicable Security Documents with respect to such Subsequent Required Guarantor, including the recording of instruments in the applicable IP Office, if required, and the filing of UCC financing statements or PPSA financing statements in such jurisdictions as may be required by the Security Documents, and (iv) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent customary legal opinions relating to the matters described above.

(d) Notwithstanding the foregoing provisions of this Section 5.9 or any other provision hereof or of any other Loan Document, (i) no Loan Party shall be required to grant a security interest in any Excluded Assets, (ii) except as set forth in clause (iii) below, no Loan Party shall be required to perfect any pledges, security interests and mortgages in the Collateral by any means other than (A)(1) filings pursuant to the Uniform Commercial Code (or PPSA) in the office of the Secretary of State (or similar central filing office) of the relevant State, Province or Territory (or such multiple combination thereof as may be required to achieve perfection), and, and (2) filings in the applicable IP Offices with respect to intellectual property as expressly required in the Security Documents, (B) Mortgages in respect of Mortgaged Properties to be filed in the applicable recording office(s) of the counties or provinces in which the Mortgaged Property is located (and, if required or customary in the jurisdiction where such Mortgaged Properties are located, fixture filings) and (C) subject to the

 

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Intercreditor Agreement and any other intercreditor arrangements entered into pursuant to this Agreement, delivery to the Administrative Agent of all certificates evidencing Capital Stock of Restricted Subsidiaries required to be delivered in order to perfect the Administrative Agent’s security interest therein, intercompany notes and other instruments (including the Subordinated Intercompany Notes) to be held in its possession, in each case, as expressly required in the Security Documents, (iii) subject to Section 2.21, no Loan Party shall be required to enter into any control agreement with respect to any deposit account, securities account or commodity account, (iv) no Loan Party shall be required to take any action with respect to any assets located outside of the United States or Canada (other than actions listed in clause (ii)(A) or (C) above), (v) no Loan Party shall be required to take any actions in any jurisdiction other than the United States or Canada (or any political subdivision thereof) in connection with pledging Collateral or enter into any collateral documents governed by the laws of any country (or any political subdivision thereof) other than the United States or Canada (or any political subdivision thereof), (vi) no Subsidiary described in clause (d) or (f) of the definition of Excluded Subsidiary shall be required to guarantee, or make any payments in respect of any US Borrower Obligations, notwithstanding that such Subsidiary may be or may be required to become a Loan Party hereunder with respect to Obligations other than the US Borrower Obligations and (vii) no Loan Party shall be required to prepare or deliver any environmental surveys or reports with respect to the real property of any Borrower Group Member.

5.10 Use of Proceeds. Use the proceeds of the Loans and the Letters of Credit only for the purposes specified in Section 3.14 and not in contravention of Section 3.19.

5.11 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Administrative Agent and the Lenders with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds or products thereof or with respect to any other property or assets hereafter acquired by any Loan Party which may be deemed to be part of the Collateral) pursuant hereto or thereto other than any Excluded Assets.

5.12 Canadian Pensions. In the case of any Canadian Subsidiaries (to the extent any Canadian Pension Plans exist):

(a) Ensure that, for each Canadian Pension Plan, each Canadian Subsidiary complies, in a timely fashion, with and perform in all material respects all of its obligations under and in respect of such Canadian Pension Plan, including under any funding agreements and all applicable Requirements of Law (including any fiduciary, funding, investment and administration obligations);

(b) Ensure that all employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of each Canadian Pension Plan and Canadian Multiemployer Plan are paid or remitted by the Canadian Subsidiaries in a timely fashion in accordance with the terms thereof, any funding agreements, the terms of any applicable collective bargaining agreement, and all Requirements of Law; and

(c) Deliver to the Administrative Agent (A) if reasonably requested by the Administrative Agent, copies of each annual and other return, report or valuation with respect to each Canadian Pension Plan as filed with any applicable Governmental Authority; (B) promptly after receipt thereof, a copy of any direction, order, notice, ruling or opinion that any Canadian Subsidiary may receive from any applicable Governmental Authority with respect to any Canadian Pension Plan; and (C) notification within thirty days of the establishment of any Canadian Pension Plan, or the commencement

 

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of contributions to any such plan to which such Canadian Subsidiary was not previously contributing, including, for greater certainty, in the event of the acquisition of any Person if such Person sponsors, administers, or participates in, or has any liability or obligation in respect of, a Canadian Pension Plan.

5.13 Designation of Subsidiaries. (a) The Board of Directors of the Initial Borrower may at any time designate any Restricted Subsidiary (other than any Borrower) as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary by written notice to the Administrative Agent; provided, that (i) immediately before and after such designation, no Event of Default shall have occurred and be continuing, (ii) each subsidiary that is a “Restricted Subsidiary” under the Senior Secured Notes Indenture or any Senior Secured Bridge Document shall not be designated as an Unrestricted Subsidiary hereunder unless it is designated as an “Unrestricted Subsidiary” under (x) the Senior Secured Notes Indenture or any Senior Secured Bridge Document substantially contemporaneously therewith, (y) any Material Debt incurred under Section 6.2(f) and (z) any Permitted Refinancing with respect to the Indebtedness described in clause (x) or (y), (iii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it was previously designated as an Unrestricted Subsidiary and then redesignated as a Restricted Subsidiary, and (iv) immediately before and after any such designation of a Restricted Subsidiary as an Unrestricted Subsidiary, either (x) the Payment Conditions shall be satisfied, or (y) the Investment resulting from such designation must otherwise be in compliance with Section 6.7 as provided in clause (b) below.

(b) The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Initial Borrower therein at the date of designation in an amount equal to the fair market value of the Initial Borrower’s Investment therein as determined in good faith by the Initial Borrower and the Investment resulting from such designation must otherwise be in compliance with Section 6.7 (as determined at the time of such designation). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time and a return on any Investment by the Initial Borrower in such Unrestricted Subsidiary; provided, that (i) solely for the purpose of calculating the outstanding amounts of Investments under Section 6.7 made in respect of any Unrestricted Subsidiary being redesignated as a Restricted Subsidiary, upon such redesignation the Initial Borrower shall be deemed to continue to have an outstanding Investment in such Subsidiary in an amount (if positive) equal to (a) the Initial Borrower’s Investment in such Subsidiary at the time of such redesignation less (b) the fair market value of the net assets of such Subsidiary at the time of such redesignation attributable to the Initial Borrower’s ownership of such Subsidiary and (ii) solely for purposes of Section 5.9(c) and the Security Documents, any Unrestricted Subsidiary designated as a Restricted Subsidiary shall be deemed to have been acquired on the date of such designation. Any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Initial Borrower.

5.14 Post-Closing Matters. As promptly as reasonably practicable, and in any event within the time periods specified on Schedule 5.14 (or such longer period as the Administrative Agent may agree), after the Closing Date, (a) provide, or cause the applicable Borrower Loan Party to provide, such Collateral that would have been required to be delivered on the Closing Date pursuant to Section 4.1(i), 4.1(k) or 4.1(n) but for the Limited Conditionality Provision and (b) complete, or cause the applicable Borrower Loan Party to complete, such undertakings and deliveries, in each case, as are set forth on Schedule 5.14.

SECTION 6. NEGATIVE COVENANTS

Each Borrower hereby jointly and severally agrees that, so long as any Commitments remain in effect, any undrawn and unexpired Letter of Credit remains outstanding (unless such Letter of Credit has

 

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been cash collateralized in a manner consistent with the requirements of Section 2.4(j) or backed by another letter of credit in a manner reasonably satisfactory to the applicable Issuing Bank) or any Loan or other amount (excluding Obligations in respect of any Specified Hedge Agreements, Cash Management Obligations and contingent reimbursement and indemnification obligations, in each case, that are not due and payable) is owing to any Lender, the Administrative Agent or any Arranger hereunder, each Borrower shall not (and solely with respect to Section 6.14, Holdings shall not), and shall not permit any of the Restricted Subsidiaries of the Borrowers to:

6.1 Financial Covenant. During each Compliance Period, the Initial Borrower shall not permit (i) the Consolidated Fixed Charge Coverage Ratio for the last Test Period ended prior to the beginning of such Compliance Period for which financial statements have been delivered or were required to be delivered to the Lenders pursuant to Section 5.1(a) or (b) to be less than 1.00:1.00, or (ii) the Consolidated Fixed Charge Coverage Ratio for any Test Period ending thereafter until termination of such Compliance Period to be less than 1.00:1.00. Within three (3) Business Days after the beginning of a Compliance Period, the Initial Borrower shall provide to the Administrative Agent a compliance certificate calculating the Consolidated Fixed Charge Coverage Ratio for the Test Period for which financial statements are required to be delivered to the Lenders pursuant to Section 5.1(a) or (b) ended immediately prior to the beginning of such Compliance Period based on the most recent financial statements required to be delivered pursuant to Section 5.1(a) or (b).

6.2 Limitation on Indebtedness. Directly or indirectly, create, incur, assume, guaranty or suffer to exist any Indebtedness or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

(a) Indebtedness pursuant to any Loan Document (including Indebtedness under any Incremental Facility and Extended Revolving Credit Commitments);

(b) intercompany Indebtedness permitted pursuant to Section 6.7;

(c) Indebtedness consisting of (A) (i) Capital Lease Obligations or (ii) purchase money obligations (including obligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings) to finance or refinance (within 270 days of the acquisition or replacement or completion of construction, installation, repair or improvement of such fixed or capital assets, as applicable) the acquisition, replacement, construction, installation, repair or improvement of fixed or capital assets within the limitations set forth in Section 6.3(g) or (B) any Refinancing Indebtedness in respect thereof; provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed the greater of $40.0 million and 30.0% of Consolidated EBITDA for the Relevant Reference Period;

(d) Indebtedness outstanding on the date hereof and listed on Schedule 6.2(d); provided, that any such Indebtedness owed by any Borrower Loan Party to a Subsidiary that is not a Borrower Loan Party shall be evidenced by a Subordinated Intercompany Note (or, to the extent customary under applicable Requirements of Law, such other customary note or debt instrument) and subordinated to the Obligations on the terms set forth therein;

(e) Guarantee Obligations, letters of credit, indemnities (including through cash collateralization), surety bonds, performance bonds and similar obligations (i) made in the ordinary course of business by any Borrower Group Member of obligations (other than in respect of Indebtedness for borrowed money) of (x) any Restricted Subsidiaries, (y) any special purpose entities in connection with any construction or development projects relating to the business of the Borrower Group Members or (z) any joint venture involving the commercial and industrial insulation division of any Borrower

 

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Group Member, (ii) of any Borrower Group Member in respect of Indebtedness of any Borrower Group Member otherwise permitted to be incurred by any such Borrower Group Member, as the case may be, under this Section 6.2 (other than Section 6.2(d)), and (iii) of any Borrower Group Member in respect of Indebtedness of any Unrestricted Subsidiary or joint venture; provided, that (A) in the case of clause (ii), if the Indebtedness being guaranteed is subordinated to the Obligations such guarantee shall be subordinated to the Obligations on terms at least as favorable to the Lenders as those contained in the subordination provisions of such Indebtedness, (B) in the case of clause (ii), no Guarantee Obligations, letter of credit, indemnities (including through cash collateralization), surety bond, performance bonds or similar obligation by any Restricted Subsidiary in respect of any Indebtedness of any Borrower Loan Party shall be permitted unless such Restricted Subsidiary shall also become a Subsidiary Guarantor, (C) in the case of clauses (ii) and (iii), any such Guarantee Obligation, letter of credit, indemnities (including through cash collateralization), surety bond, performance bonds or similar obligation of a Borrower Loan Party in respect of Indebtedness of a Subsidiary or other Person that is not a Borrower Loan Party shall be a permitted Investment in such Person pursuant to Section 6.7, (D) in the case of clause (i)(z) above, the aggregate amount of all obligations at any one time outstanding shall not exceed $30.0 million and (E) in the case of clause (i)(z), such Indebtedness is unsecured;

(f) any Indebtedness so long as either (i) the Total Leverage Ratio, determined on a Pro Forma Basis (provided, that the Total Leverage Ratio shall be determined without netting the proceeds from the incurrence of such Indebtedness (it being understood, for the avoidance of doubt, that such proceeds, to the extent constituting cash or Cash Equivalents, may be netted for subsequent determinations of the Total Leverage Ratio)), does not exceed 6.00:1.00 at the time of incurrence thereof or (ii) solely with respect to unsecured Indebtedness, the Interest Coverage Ratio determined on a Pro Forma Basis for the Relevant Reference Period is not less than 2.00:1.00, as if the additional Indebtedness had been incurred at the beginning of such four-quarter period; provided, that the aggregate principal amount of Indebtedness at any one time outstanding pursuant to this clause (f) in respect of which any obligor is a Non-Loan Party Subsidiary shall not exceed the greater of $45.0 million and 35.0% of Consolidated EBITDA for the Relevant Reference Period;

(g) Indebtedness of any Borrower Group Member or of any Person that becomes a Restricted Subsidiary, in each case to the extent assumed in connection with a Permitted Acquisition or other acquisition permitted under Section 6.7 so long as either (i) the Total Leverage Ratio, determined on a Pro Forma Basis (provided, that the Total Leverage Ratio shall be determined without netting the proceeds from the incurrence of such Indebtedness (it being understood, for the avoidance of doubt, that such proceeds, to the extent constituting cash or Cash Equivalents, may be netted for subsequent determinations of the Total Leverage Ratio)), does not exceed 6.00:1.00 at the time of incurrence thereof or (ii) solely with respect to unsecured Indebtedness, the Interest Coverage Ratio for the Relevant Reference Period is not less than 2.00:1.00 or (y) no less than the Interest Coverage Ratio in effect immediately prior to such acquisition, in each case, determined on a Pro Forma Basis as if the additional Indebtedness had been incurred at the beginning of such four-quarter period, and any Refinancing Indebtedness with respect thereto; provided, that such Indebtedness exists at the time the acquired Person becomes a Restricted Subsidiary or such asset is acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary or such asset being acquired; provided, further that the aggregate principal amount of Indebtedness at any one time outstanding pursuant to this clause (g) assumed in connection with a Permitted Acquisition of a Restricted Subsidiary that does not become a Loan Party shall not exceed the greater of $45.0 million and 35.0% of Consolidated EBITDA for the Relevant Reference Period;

(h) Indebtedness in respect of the Senior Secured Notes or any Senior Secured Bridge Debt, as applicable (including, in each case, Guarantee Obligations in respect thereof) in an

 

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aggregate principal amount not to exceed $575.0 million at any time outstanding and any Refinancing Indebtedness with respect thereto;

(i) Indebtedness consisting of promissory notes issued by any Loan Party or other Restricted Subsidiary to current or former officers, directors, managers, consultants and employees, or their respective estates, executors, administrators, heirs, legatees, distributees, spouses or former spouses, to finance the purchase or redemption of Capital Stock of Holdings (or any direct or indirect parent thereof) to the extent permitted by Section 6.6(b)(i);

(j) to the extent constituting Indebtedness, Cash Management Obligations and other Indebtedness in respect of Cash Management Services in the ordinary course of business and Indebtedness arising from the endorsement of instruments or other payment items for deposit and the honoring by a bank or other financial institution of instruments or other payments items drawn against insufficient funds;

(k) to the extent constituting Indebtedness, indemnification, deferred purchase price adjustments, earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets or any Investment permitted to be acquired or made hereunder; provided that the maximum liability in respect of such Indebtedness in connection with a disposition shall at no time exceed the gross proceeds, including the fair market value of non-cash proceeds (measured at the time received and without giving effect to any subsequent changes in value), actually received by the Initial Borrower and the Restricted Subsidiaries in connection with such disposition;

(l) Indebtedness of Non-Loan Party Subsidiaries in an aggregate principal amount (for all Non-Loan Party Subsidiaries) not to exceed the greater of $45.0 million and 35.0% of Consolidated EBITDA for the Relevant Reference Period at any time outstanding;

(m) (A) Indebtedness consisting of the financing of insurance premiums in the ordinary course of business and (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business or consistent with past practice;

(n) Indebtedness in respect of Hedge Agreements or Specified Hedge Agreements entered into not for speculative purposes;

(o) additional Indebtedness in an aggregate principal amount not to exceed the greater of $55.0 million and 40.0% of Consolidated EBITDA for the Relevant Reference Period at any time outstanding;

(p) [reserved];

(q) Indebtedness representing deferred compensation or similar obligations to employees of Holdings, the Initial Borrower and the Subsidiaries incurred in the ordinary course of business;

(r) Indebtedness consisting of obligations of the Group Members under deferred compensation or other similar arrangements with employees incurred by such Person in connection with Permitted Acquisitions or any other Investments permitted under Section 6.7 constituting acquisitions of Persons or businesses or divisions;

(s) [reserved];

 

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(t) Indebtedness in respect of (a) workers’ compensation claims, self-insurance obligations, statutory obligations, supply chain financing transactions, trade contracts, governmental contracts (other than for borrowed money), performance, tender, bid, release, stay, documentary letters of credit, indemnity, surety, judgment, appeal, advance payment, customs, value added or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warranties provided by the Initial Borrower or a Restricted Subsidiary or relating to liabilities, obligations or guarantees incurred in the ordinary course of business or consistent with past practice; (b) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or consistent with past practice; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence; (c) customer deposits and advance payments received in the ordinary course of business or consistent with past practice from customers for goods or services purchased in the ordinary course of business or consistent with past practice; (d) letters of credit, bankers’ acceptances, guarantees or other similar instruments or obligations issued or relating to liabilities or obligations incurred pursuant to clause (a) of this clause (t) in the ordinary course of business or consistent with past practice; and (e) any customary treasury, depositary, cash management, automatic clearinghouse arrangements, overdraft protections, cash pooling or netting or setting off arrangements or similar arrangements in the ordinary course of business or consistent with past practice;

(u) Indebtedness in an aggregate principal amount not to exceed $30.0 million at any time incurred by a Permitted Receivables Financing Subsidiary in a Permitted Receivables Financing that is not recourse to the Initial Borrower or any Borrower Group Member other than (A) one or more Permitted Receivables Financing Subsidiaries and (B) pursuant to Standard Securitization Undertakings;

(v) Refinancing Indebtedness in respect of Indebtedness permitted by Section 6.2(d), (f), (g), (h), (l), (o) and (y) (it being understood and agreed that to the extent that any Indebtedness incurred under Section 6.2(f), (g), (l), (o) or (y) is refinanced with Refinancing Indebtedness under this clause (v), then the aggregate outstanding principal amount of such Refinancing Indebtedness shall also be deemed to utilize the related basket under the applicable clause of this Section 6.2 on a dollar-for-dollar basis (it being further understood that a Default shall be deemed not to have occurred solely to the extent that the incurrence of Refinancing Indebtedness would cause the permitted amount under such clause of this Section 6.2 to be exceeded and such excess shall be permitted hereunder));

(w) [reserved];

(x) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit;

(y) additional Indebtedness in an amount not to exceed the amount of capital contributions made to Holdings, or the amount of proceeds from the issuance of Qualified Capital Stock issued by Holdings, in each case after the Closing Date, so long as such amount (x) is contributed to the Initial Borrower as common Capital Stock, (y) does not constitute a part of any Excluded Contribution and (z) is not applied as an addback to Consolidated EBITDA pursuant to clause (1)(i) of the definition thereof;

(z) unsecured Indebtedness owed to a Permitted Investor or Affiliate thereof that is expressly subordinate and junior in right of payment to the Obligations pursuant to subordination arrangements in form and substance reasonably acceptable to the Administrative Agent; provided, that such Indebtedness shall (i) have a final maturity no earlier than the date that is 91 days after the Latest

 

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Maturity Date at the time of issuance, (ii) not require any payments of interest in cash or other amounts in respect of principal in cash prior to the date that is 91 days after the Latest Maturity Date at the time of issuance, (iii) not be subject to any amortization prior to the final maturity thereof, or be subject to any mandatory redemption or prepayment provisions or rights (except customary asset sale or change of control provisions) and (iv) not be subject to any financial maintenance covenant;

(aa) Indebtedness constituting Attributable Indebtedness, to the extent the underlying Sale and Leaseback Transaction giving rise to such Attributable Indebtedness is permitted under Section 6.10; and

(bb) to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Section 6.2(a) through (aa) above;

(cc) unsecured guarantees by any Borrower or any other Borrower Group Member of the obligations of any other Borrower Group Member under operating leases or other obligations that do not constitute Indebtedness, in each case, entered into in the ordinary course of business;

provided, that to the extent any Indebtedness incurred in reliance on clause (f), (g), (l), (o) or (y) of this Section 6.2 is used to finance, in whole or in part, any Limited Conditionality Transaction, then for purposes of determining compliance under such clause, the Initial Borrower shall have the option of making the applicable determination as of the date the definitive documentation for such Permitted Acquisition or permitted Investment is executed, or the redemption or prepayment notice is given (and the applicable financial ratios, Excess Availability or basket shall be calculated as if the Limited Conditionality Transaction and other Pro Forma Transactions in connection therewith, were consummated on such date until consummated or terminated); provided that (i) Excess Availability is subject to the limits of the Acquired Asset Borrowing Base, if applicable, (ii) the foregoing proviso shall be not applicable for purposes of Section 4.2 (other than Sections 4.2(a) and (b) to the extent set forth in Section 2.20(c)) and (iii) if the Initial Borrower elects to have such determinations occur as of the date such definitive agreement or redemption or prepayment notice, any related incurrence of Indebtedness or Liens shall be deemed to have occurred on such date and outstanding thereafter for purposes of subsequently calculating any ratios under this Agreement after such date and before the consummation of such Limited Conditionality Transaction and to the extent baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated Total Assets or Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or determining the permissibility of other transactions (not related to such Limited Conditionality Transaction) shall not reflect such Limited Conditionality Transaction until it is closed.

For purposes of determining compliance with any US Dollar-denominated restriction on the incurrence of Indebtedness or refinancing of Indebtedness, the US Dollar Equivalent principal amount of Indebtedness denominated in a Foreign Currency shall be calculated based on the relevant currency Exchange Rate in effect on the date such Indebtedness was incurred or refinanced, in the case of term debt, or first committed or refinanced, in the case of revolving credit debt; provided, that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a Foreign Currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable US Dollar-denominated restriction to be exceeded if calculated at the relevant currency Exchange Rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such US Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or

 

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defeased, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.

Notwithstanding any other provision of this Section 6.2, the maximum amount of Indebtedness that the Borrower or a Restricted Subsidiary may Incur pursuant to this Section 6.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies.

To the extent otherwise constituting Indebtedness, the accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall be deemed not to be Indebtedness for purposes of this Section 6.2. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the accreted amount thereof.

6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

(a) Liens for taxes, assessments or governmental charges or levies, or other statutory obligations, not at the time delinquent or that are being contested in good faith by appropriate proceedings (provided, that adequate reserves with respect to such proceedings are maintained on the books of the Initial Borrower or the applicable Restricted Subsidiary, as the case may be, in conformity with GAAP);

(b) (i) carriers’, warehousemen’s, landlords’, mechanics’, contractors’, materialmen’s, repairmen’s or other like Liens imposed by law or arising in the ordinary course of business which secure amounts that are not overdue for a period of more than 60 days or if more than 60 days overdue, are unfiled and no action has been taken to enforce such Lien, or that are being contested in good faith by appropriate proceedings (provided, that adequate reserves with respect to such proceedings are maintained on the books of the Borrower Group Members in conformity with GAAP), (ii) Liens of customs and revenue authorities to secure payment of customs duties in connection with the importation of goods in the ordinary course of business and (iii) Liens on specific items of inventory or other goods and proceeds thereof of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or such other goods in the ordinary course of business;

(c) (i) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit, surety bonds, performance bonds or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Initial Borrower or any Borrower Group Member;

(d) Liens incurred in connection with, or deposits by or on behalf of any Borrower Group Member to secure, the performance of self-insurance obligations (solely in the case of such self-insurance obligations, if and to the extent required by applicable Requirements of Law), supply chain financing arrangements, bids, trade contracts and governmental contracts (other than Indebtedness for borrowed money), leases, statutory obligations, surety, stay, customs and appeal bonds, performance and/or return of money bonds, completion guarantees and other obligations of a like nature (including those to secure health and safety or environmental obligations) incurred in the ordinary course of business;

 

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(e) easements, rights-of-way, covenants, conditions and restrictions, trackage rights, restrictions (including zoning restrictions or similar rights reserved to or vested in any Governmental Authority to control or regulate the use of any real property), encroachments, protrusions and other similar encumbrances and title defects incurred in the ordinary course of business that, in the aggregate, do not materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower Group Members taken as a whole; provided, that none of the foregoing secures Indebtedness for borrowed money;

(f) Liens (i) in existence on the date hereof (or, for title insurance policies issued in accordance with Section 5.9, on the date of such policies) and either (x) listed on Schedule 6.3(f), in the case of Liens in existence on the date hereof, (y) on the applicable Mortgaged Property disclosed on any title insurance policies obtained on Mortgaged Properties in connection with Mortgages executed and delivered after the date hereof or (z) on any real property that would be disclosed by an updated title report for such real property and (ii) any replacement, renewal or extension of any such Lien permitted under subclause (i) of this clause (f); provided, that (I) such replaced, renewed or extended Lien does not extend to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 6.2(c), and (B) proceeds and products thereof, and (II) the replacement, renewal or extension of the obligations secured or benefited by such Liens is permitted by Section 6.2;

(g) Liens securing Indebtedness incurred pursuant to Section 6.2(c) (and related obligations, including Capital Lease Obligations); provided, that (i) such Liens (other than Liens securing Indebtedness that is Permitted Refinancing of Indebtedness originally incurred under Section 6.2(c)) shall be created within 270 days of the acquisition or replacement or completion of construction, installation, repair or improvement or refinancing of such fixed or capital assets, as applicable, (ii) such Liens do not at any time encumber any Property other than the Property acquired, constructed, installed, repaired, improved or financed by such Indebtedness when such Indebtedness was originally incurred, and the proceeds and products of and accessions to such Property, and (iii) the principal amount of Indebtedness initially secured thereby is not more than 100% of the purchase price or cost of construction, installation, repair or improvement of such fixed or capital asset; provided, further, that, in each case, individual financings of equipment and other assets provided by one lender or lessor may be cross collateralized to other outstanding financings of equipment and other assets provided by such lender or lessor;

(h) Liens created pursuant to the Loan Documents (including Liens securing any Incremental Facility, Extended Revolving Credit Commitments, Specified Hedge Agreements and Cash Management Obligations), including with respect to any Specified Hedge Agreements, Liens created pursuant to the Loan Documents on any margin or collateral posted by any Borrower Group Member under a Specified Hedge Agreement as a result of any regulatory requirement, swap clearing organizations, or other similar regulations, rule, or requirement;

(i) any interest or title of a lessor or sublessor under any lease or sublease or real property license or sub-license entered into by any Borrower Group Member in the ordinary course of its business and covering only the assets so leased, subleased, licensed or sub-licensed;

(j) Liens in connection with attachments or judgments or orders in circumstances not constituting an Event of Default under Section 7.1(h);

(k) Liens existing on property at the time of its acquisition or existing on the property of a Person that becomes a Restricted Subsidiary of the Initial Borrower after the date hereof (including any replacements, renewals or extensions thereof); provided, that (i) any Indebtedness secured

 

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thereby is permitted by Section 6.2(g) or is Refinancing Indebtedness in respect thereof, (ii) such Liens cover solely the Property so acquired or the Property of the Person that became a Restricted Subsidiary and are not expanded to cover additional Property (other than proceeds and products thereof and accessions thereto) and (iii) such Liens were not created in contemplation of such acquisition;

(l) Liens securing Indebtedness permitted under Section 6.2(h) or any Refinancing Indebtedness in respect thereof; provided, that any such Liens on Revolving Priority Collateral (as defined in the Intercreditor Agreement) are junior to the Liens securing the Obligations under the Security Documents and the relative Lien priority thereof is set forth in the Intercreditor Agreement and/or another intercreditor agreement reasonably acceptable to the Administrative Agent;

(m) Liens on insurance policies and the proceeds thereof securing insurance premium financing permitted hereunder;

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

(o) (i) Liens of a collection bank arising under Section 4-208 of the Uniform Commercial Code on the items in the course of collection, (ii) Liens attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business and not for speculative purposes and (iii) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to accounts and cash and Cash Equivalents on deposit in accounts maintained by any Borrower Group Member (including any restriction on the use of such cash and Cash Equivalents or investment property), in each case under this clause (iii) granted in the ordinary course of business in favor of the banks or other financial or depositary institution with which such accounts are maintained, securing amounts owing to such Person with respect to Cash Management Services (including operating account arrangements and those involving pooled accounts and netting arrangements); provided, that, in the case of this clause (iii), unless such Liens arise by operation of applicable law, in no case shall any such Liens secure (either directly or indirectly) any Indebtedness for borrowed money;

(p) licenses and sublicenses of Intellectual Property granted by any Borrower Group Member in the ordinary course of business;

(q) UCC financing statements, PPSA financing statements or similar public filings that are filed as a precautionary measure in connection with operating leases or consignment of goods in the ordinary course of business;

(r) Liens on property rented to, or leased by, any Borrower Group Member pursuant to a Sale and Leaseback Transaction; provided, that (i) such Sale and Leaseback Transaction is permitted by Section 6.10, (ii) such Liens do not encumber any other property of the Initial Borrower or the Restricted Subsidiaries and the proceeds and products of and accessions to such property, and (iii) such Liens secure only the Attributable Indebtedness incurred in connection with such Sale and Leaseback Transaction;

(s) Liens on (i) the assets of Non-Loan Party Subsidiaries that secure (A) Indebtedness of Non-Loan Party Subsidiaries permitted pursuant to Section 6.2 (and related obligations) or (B) obligations of Non-Loan Party Subsidiaries other than Indebtedness and incurred in the ordinary course of business or (ii) the Capital Stock of Non-Loan Party Subsidiaries or joint ventures, securing Indebtedness of such Non-Loan Party Subsidiaries or joint ventures permitted by Section 6.2;

 

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(t) Liens ranking pari passu with the Senior Secured Notes, any Senior Secured Bridge Debt or any Refinancing Indebtedness with respect thereto, securing Indebtedness ranking equal in right of payment with the Senior Secured Notes, any Senior Secured Bridge Debt or any such Refinancing Indebtedness, so long as the First Lien Leverage Ratio does not exceed 5.25:1.00 on a Pro Forma Basis on the date of such incurrence and after giving effect thereto; provided, that any such Liens on Revolving Priority Collateral (as defined in the Intercreditor Agreement) are junior to the Liens securing the Obligations under the Security Documents and the agent or other representative for the holders of such Liens shall have become a party to the Intercreditor Agreement and/or another intercreditor agreement reasonably acceptable to the Administrative Agent;

(u) good faith earnest money deposits made in connection with a Permitted Acquisition or any other Investment (other than Investments under Section 6.7(r)) or letter of intent or purchase agreement permitted hereunder;

(v) Liens not otherwise permitted by this Section 6.3 so long as the aggregate amount of obligations secured thereby does not exceed the greater of $55.0 million and 40.0% of Consolidated EBITDA for the Relevant Reference Period at any time outstanding; provided that any such Liens on Revolving Priority Collateral (as defined in the Intercreditor Agreement) are junior to the Liens securing the Obligations under the Security Documents and the agent or other representative for the holders of such Liens shall have become a party to the Intercreditor Agreement and/or another intercreditor agreement reasonably acceptable to the Administrative Agent;

(w) Liens securing Refinancing Indebtedness permitted by Section 6.2(v) (and related obligations) if such Liens are permitted to secure such Indebtedness in accordance with the definition of “Refinancing Indebtedness”;

(x) Liens in favor of the Initial Borrower, any Borrower or any Subsidiary Guarantor securing intercompany Indebtedness permitted hereunder;

(y) Liens (i) on cash advances or deposits in favor of the seller of any property to be acquired in a Permitted Acquisition or an Investment permitted pursuant to Section 6.7 to be applied against the purchase price for such Investment or (ii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 6.5, in each case, solely to the extent such Investment or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

(z) (i) Liens deemed to exist in connection with Investments in repurchase agreements under Section 6.7; provided, that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement, and (ii) reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts maintained in the ordinary course of business and not for speculative purposes;

(aa) Liens that are customary contractual rights of setoff relating to purchase orders and other agreements entered into with customers of any Borrower Group Member in the ordinary course of business;

(bb) Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of the Borrower Group Members;

(cc) ground leases in respect of real property on which facilities owned or leased by any Borrower Group Member are located;

 

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(dd) Liens on Permitted Receivables Financing Assets securing any Permitted Receivables Financing;

(ee) Liens securing obligations in respect of trade-related letters of credit permitted under Section 6.2 and incurred in the ordinary course of business of the Borrower Group Members and covering the goods (or the documents of title in respect of such goods) financed by such letters of credit and the proceeds and products thereof;

(ff) Liens (i) on cash and Cash Equivalents to secure obligations under Hedge Agreements of the type described in Section 6.2(n) (excluding Specified Hedge Agreements), including Liens on any margin or collateral posted by any Borrower Group Member under any such Hedge Agreement (other than a Specified Hedge Agreement) as a result of any regulatory requirement, swap clearing organizations, or other similar regulations, rule, or requirement, and (ii) securing obligations of the type described in Section 6.2(j) (excluding Cash Management Obligations);

(gg) any encumbrance or restriction on cash or other deposits or net worth imposed by customers under agreements entered into in the ordinary course of business or consistent with past practice;

(hh) customary provisions in leases, licenses, shareholder agreements, joint venture agreements and other similar agreements, organizational documents and instruments;

(ii) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Initial Borrower or any of the Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Initial Borrower or such Restricted Subsidiary that are the subject of such agreement or the payment rights arising thereunder (and any accessions and additions thereto and any improvements, proceeds and products thereof) and does not extend to any other asset or property of the Initial Borrower or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;

(jj) any encumbrance or restriction with respect to a Restricted Subsidiary that was previously an Unrestricted Subsidiary pursuant to or by reason of an agreement that such Subsidiary is a party to or entered into before the date on which such Subsidiary became a Restricted Subsidiary; provided that such agreement was not entered into in anticipation of an Unrestricted Subsidiary becoming a Restricted Subsidiary and any such encumbrance or restriction does not extend to any assets or property of the Initial Borrower or any other Restricted Subsidiary other than the assets and property of such Subsidiary;

(kk) encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order, or required by any regulatory authority; and

(ll) any encumbrance or restriction pursuant to an agreement or instrument effecting a refinancing of Indebtedness incurred pursuant to, or that otherwise refinances, an agreement or instrument referred to in clauses (a) through (kk) of this Section 6.3 or this clause (ll) (an “Initial Agreement”) or contained in any amendment, supplement or other modification to an agreement referred to in clauses (a) through (kk) of this Section 6.3 or this clause (ll); provided, however, that the encumbrances and restrictions with respect to the Initial Borrower or such Restricted Subsidiary contained in any such agreement or instrument are no less favorable in any material respect to the Lenders taken as a whole than the encumbrances and restrictions contained in the Initial Agreement or

 

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Initial Agreements to which such refinancing or amendment, supplement or other modification relates (as determined in good faith by the Initial Borrower).

6.4 Limitation on Fundamental Changes. Consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself, or Dispose of all or substantially all of its Property or business, except that:

(a) so long as no Event of Default has occurred and is continuing, (x) any merger, consolidation or amalgamation or other transaction the sole purpose of which is to (i) reincorporate or reorganize the Initial Borrower in any State of the United States or reincorporate or reorganize any other Borrower Group Member in a Qualified Jurisdiction (provided that any Group Member that is organized under the laws of the United States or any State thereof or the District of Columbia shall only reincorporate or reorganize in any State of the United States or the District of Columbia) or (ii) change the form of entity shall be permitted and (y) any Restricted Subsidiary of the Initial Borrower may be merged, consolidated or amalgamated with or into any other Restricted Subsidiary of the Initial Borrower; provided, that, in each case of clauses (x) and (y), (A) in the case of any merger, consolidation or amalgamation involving the Initial Borrower, the Initial Borrower shall be the continuing, surviving or resulting entity and the Capital Stock of the Initial Borrower shall remain Pledged Capital Stock and (B) in the case of any merger, consolidation or amalgamation involving one or more Subsidiary Guarantors or Additional Borrowers (and not the Initial Borrower), a Subsidiary Guarantor or Additional Borrower shall be the continuing, surviving or resulting entity or substantially simultaneously with such transaction, the continuing, surviving or resulting entity shall become a Subsidiary Guarantor or Additional Borrower and the Initial Borrower shall comply with Section 5.9 in connection therewith;

(b) any Restricted Subsidiary of the Initial Borrower may Dispose of all or substantially all of its Property or business, including by way of a merger, amalgamation, dissolution, liquidation or consolidation, (i) to any Borrower or any Subsidiary Guarantor or (ii) pursuant to a Disposition permitted by Section 6.5;

(c) any Non-Loan Party Subsidiary may Dispose of all or substantially all of its assets to any other Non-Loan Party Subsidiary;

(d) any merger, consolidation or amalgamation that is contemplated by, and occurs substantially simultaneously with, the Transactions;

(e) any Investment permitted by Section 6.7 may be structured as a merger, consolidation or amalgamation; provided, that in the case of any such merger, consolidation or amalgamation of a Borrower Loan Party, the surviving, continuing or resulting legal entity of such merger, consolidation or amalgamation is a Borrower Loan Party (or substantially simultaneously with such transaction, the continuing, surviving or resulting entity shall become a Borrower Loan Party) and the Initial Borrower shall comply with Section 5.9 in connection therewith;

(f) (i) any Restricted Subsidiary of the Initial Borrower (other than any Excluded Subsidiary) may dissolve, liquidate or wind up its affairs at any time if the Initial Borrower determines in good faith that such dissolution, liquidation or winding up is in the best interest of the Initial Borrower and the Borrower Group Members, and not materially disadvantageous to the Lenders (as determined by the Initial Borrower in good faith) (provided, that in the case of any dissolution, liquidation or winding up of a Restricted Subsidiary that is a Subsidiary Guarantor or an Additional Borrower, such Subsidiary shall at or before the time of such dissolution, liquidation or winding up transfer its assets to any Borrower or any Subsidiary Guarantor unless such Disposition of assets is permitted by Section 6.5), and (ii) any Excluded Subsidiary of the Initial Borrower may dissolve, liquidate or wind up its affairs at any time if

 

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such dissolution, liquidation or winding up would not have or reasonably be expected to have a Material Adverse Effect (as determined by the Initial Borrower in good faith);

(g) so long as no Default or Event of Default exists or would result therefrom, the Initial Borrower may merge, amalgamate or consolidate with any other Person; provided, that (A) the Initial Borrower shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger, amalgamation or consolidation is not the Initial Borrower or is a Person into which the Initial Borrower has been liquidated (any such Person, “Successor Initial Borrower”), (A) Successor Initial Borrower shall be an entity organized or existing under the laws of the United States or any State or political subdivision thereof, (B) the Successor Initial Borrower shall expressly assume all the obligations of the Initial Borrower under this Agreement and the other Loan Documents to which the Initial Borrower is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (C) the Initial Borrower shall have delivered to the Administrative Agent an officer’s certificate and, if requested by the Administrative Agent, an opinion of counsel, each stating that such merger, amalgamation or consolidation and such supplement to this Agreement or any Loan Document comply with this Agreement and (D) immediately after giving effect to such transaction, either (x) the Consolidated Fixed Charge Coverage Ratio determined on a Pro Forma Basis is less than 2.00:1.00 for the Relevant Reference Period or (y) the Consolidated Fixed Charge Coverage Ratio for the Relevant Reference Period would not be lower than it was immediately prior to giving effect to such transaction; provided, further, that if the foregoing are satisfied, the Successor Initial Borrower will succeed to, and be substituted for, the Initial Borrower under this Agreement; and

(h) a merger, amalgamation, dissolution, liquidation, consolidation or Disposition, the purpose of which is to effect a Disposition permitted pursuant to Section 6.5.

Any transaction otherwise permitted by this Section 6.4 that results in any Subsidiary Guarantor or any Additional Borrower becoming a Non-Loan Party Subsidiary or an Excluded Subsidiary (pursuant to clause (d) of the definition of such term after giving effect to such transaction) shall be deemed an Investment in a Non-Loan Party Subsidiary for purposes of (and subject to) Section 6.7 in an amount equal to the fair market value (as reasonably determined by the Initial Borrower in good faith) of such Subsidiary Guarantor or Additional Borrower prior to giving effect to such transaction.

6.5 Limitation on Disposition of Property. Dispose of any of its Property (including receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person, except:

(a) the Disposition of obsolete, worn out, uneconomic, damaged or surplus property, equipment, or other assets or property, equipment or other assets that are no longer used or useful in the ordinary course of business of the Borrower and its Restricted Subsidiaries (other than Eligible Trade Accounts, Eligible Credit Card Accounts or Eligible Inventory), whether now or hereafter owned or leased or acquired in connection with an acquisition or used or useful in the conduct of the business of the Borrower and its Restricted Subsidiaries;

(b) the sale of inventory and other assets held for sale in the ordinary course of business or consistent with past practice;

(c) Dispositions permitted by Section 6.4 (other than Section 6.4(b)(ii));

(d) (i) the sale or issuance of any Restricted Subsidiary’s Capital Stock (other than the Initial Borrower’s Capital Stock) to any Borrower Loan Party or the sale or issuance of any Excluded

 

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Subsidiary’s Capital Stock to another Restricted Subsidiary; provided, that the Guarantors’ collective ownership interest therein is not diluted; and (ii) the sale or issuance of any Capital Stock of, or any Indebtedness or other securities of, any Unrestricted Subsidiary;

(e) Dispositions of receivables, or participations therein, to a Permitted Receivables Financing Subsidiary in connection with a Permitted Receivables Financing, in each case so long as the consideration for any such Disposition is in the form of cash or retained Capital Stock or subordinated interests of such Permitted Receivables Financing Subsidiary or subordinated interests in the Permitted Receivables Financing Assets being sold;

(f) the Disposition of cash or Cash Equivalents or investment grade securities;

(g) (i) the license or sub-license of Intellectual Property in the ordinary course of business and (ii) the lapse or abandonment in the ordinary course of business of any registrations or applications for registration of any Intellectual Property;

(h) the lease, sublease, license or sublicense of property as described in Section 6.3(i);

(i) the Disposition of surplus or other property no longer used or useful in the business of the Borrower Group Members in the ordinary course of business;

(j) so long as no Event of Default has occurred and is continuing at the time of closing thereof, the Disposition of other assets (including the issuance or sale of any shares of a Restricted Subsidiary’s Capital Stock) from and after the Closing Date so long as (i) with respect to any Disposition pursuant to this clause (j) for a purchase price in excess of $10.0 million, at least 75.0% of the consideration is in the form of cash or Cash Equivalents or exchanged for other assets of comparable or greater market value or usefulness to the business of the Borrower Group Members, taken as a whole, and (ii) with respect to any Disposition pursuant to this clause (j) for a purchase price in excess of $10.0 million such Disposition is made at fair value (as determined by the Initial Borrower in good faith); provided, that (A) any liabilities (as shown on the Initial Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided hereunder or in the footnotes thereto) of the Initial Borrower or such Restricted Subsidiary, other than liabilities that are by their terms subordinated in right of payment to the payment in cash of the Obligations (other than contingent indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto), that are assumed by the transferee with respect to the applicable Disposition and, in the case of liabilities that constitute Indebtedness, for which the Initial Borrower and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing, (B) any securities received by the Initial Borrower or such Restricted Subsidiary from such transferee that are converted by such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of the applicable Disposition and (C) any Designated Non-Cash Consideration received in respect of such Disposition having an aggregate fair market value (as determined by the Initial Borrower in good faith) that, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (C) that has not been converted into cash, does not exceed the greater of $15.0 million and 10.0% of Consolidated EBITDA for the Relevant Reference Period at any time outstanding, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed for purposes of clause (j)(i) to be cash;

(k) the Disposition of assets subject to or in connection with any Recovery Event;

(l) Dispositions consisting of Restricted Payments permitted by Section 6.6;

 

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(m) Dispositions consisting of Investments permitted by Section 6.7;

(n) Dispositions consisting of Liens permitted by Section 6.3;

(o) Dispositions of assets pursuant to Sale and Leaseback Transactions permitted by Section 6.10;

(p) Dispositions of property to any Borrower Group Member; provided, that if the transferor of such property is a Loan Party (i) the transferee thereof must be a Loan Party (or must become a Subsidiary Guarantor substantially simultaneously with such Disposition) or (ii) to the extent constituting an Investment, such Disposition must be a permitted Investment in a Non-Loan Party Subsidiary in accordance with Section 6.7;

(q) Dispositions of Investments in joint ventures or similar entities to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(r) Dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business or consistent with past practice (and not for financing purposes);

(s) the partial or total unwinding of any Hedge Agreement or any Cash Management Services;

(t) in order to resolve disputes that occur in the ordinary course of business or consistent with past practice, the Borrower Group Members may discount or otherwise compromise for less than the face value thereof (with or without recourse), notes or accounts receivable;

(u) Dispositions in connection with reorganizations and other activities related to tax planning and re-organization, so long as after giving effect thereto, the interest of the Secured Parties in the Collateral and the guarantees under the Loan Documents, taken as a whole, is not materially impaired; provided that immediately prior to and after giving effect to any such Disposition, no Default or Event of Default shall have occurred and be continuing;

(v) any Borrower Group Member may sell or dispose of shares of Capital Stock of any of its Subsidiaries in order to qualify members of the governing body of the Subsidiary if and to the extent required by applicable law;

(w) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property, (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property; provided, that to the extent the property being transferred constitutes Collateral, such replacement property shall constitute Collateral or (iii) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a similar business;

(x) foreclosure, condemnation or any similar action with respect to any property or other assets (including any settlement of, or payment in respect of, any property or casualty insurance claim);

(y) [reserved];

 

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(z) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Initial Borrower or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

(aa) any financing transaction with respect to property constructed, acquired, replaced, repaired or improved (including any reconstruction, refurbishment, renovation and/or development of real property) by the Initial Borrower or any Restricted Subsidiary after the Closing Date, including asset securitizations permitted hereunder;

(bb) any lending or disposition of samples, including time-limited evaluation software, provided to customers or prospective customers;

(cc) any surrender or waiver of contractual rights or the settlement, release, surrender or waiver of contractual, tort, litigation or other claims of any kind;

(dd) the issuance of directors’ qualifying shares and shares issued to foreign nationals, in each case, as required by applicable law; and

(ee) other Dispositions in an aggregate amount not to exceed $10.0 million;

Any Disposition of Capital Stock of any Borrower Group Member from one Borrower Group Member to another Borrower Group Member otherwise permitted by this Section 6.5 that results in any Subsidiary Guarantor becoming a Non-Loan Party Subsidiary or an Excluded Subsidiary (pursuant to clause (d) of the definition of such term after giving effect to such transaction) shall be deemed an Investment in a Non-Loan Party Subsidiary for purposes of (and subject to) Section 6.7 in an amount equal to the fair market value (as reasonably determined by the Initial Borrower in good faith) of such Subsidiary Guarantor prior to giving effect to such transaction.

6.6 Limitation on Restricted Payments. Declare or pay any dividend on (other than dividends payable solely in Qualified Capital Stock of the Person making the dividend so long as the ownership interest of any Borrower Loan Party in such Person is not diluted), or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Borrower Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, whether in cash or property (collectively, “Restricted Payments”), except that:

(a) any Restricted Subsidiary may make Restricted Payments to any Borrower and any Subsidiary Guarantor, and any Excluded Subsidiary may make Restricted Payments to any other Excluded Subsidiary;

(b) the Initial Borrower may pay dividends to permit any Parent Entity or any direct or indirect holding company of a Parent Entity to (i) so long as no Event of Default has occurred and is continuing, purchase (or in the case of a Parent Entity, to pay a dividend to a direct or indirect holding company to enable such holding company to purchase) the Capital Stock of such Parent Entity (or of such holding company) owned by future, present or former officers, directors, employees or consultants of a Parent Entity or a Borrower Group Member or make payments to employees of a Parent Entity or a Borrower Group Member upon termination of employment in connection with the exercise of stock options, stock appreciation rights or similar equity incentives or equity-based incentives pursuant to

 

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management incentive plans or other similar agreements or in connection with the death or disability of such employees, in an aggregate amount not to exceed (x) $2.5 million in any calendar year (with unused amounts in any calendar year, commencing with the 2017 calendar year, being carried over to succeeding calendar years subject to a maximum of $5.0 million in any calendar year) or (y) subsequent to the consummation of an IPO, $15.0 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $25.0 million in any calendar year) (provided, that such amounts set forth in this clause (b)(i) may be increased by an amount equal to the cash proceeds of key man life insurance policies received by the Initial Borrower and the Borrower Group Members after the Closing Date) and (ii)(x) so long as no Specified Default has occurred and is continuing, pay Permitted Management Fees (provided, that such amounts accrued but not permitted to be paid due to the continuance of a Specified Default may be paid once such Specified Default is cured or waived in accordance with Section 9.2); and (y) pay expenses, indemnification claims and other amounts (in each case, other than Permitted Management Fees) pursuant to the Management Agreement; provided, further, that cancellation of Indebtedness owing to the Initial Borrower or any Restricted Subsidiary from any future, present or former members of management, directors, employees or consultants of the Initial Borrower or Restricted Subsidiaries or any Parent Entity in connection with a repurchase of Capital Stock of the Initial Borrower or any Parent Entity will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement;

(c) the Borrowers may pay dividends to permit any Parent Entity or any direct or indirect holding company of a Parent Entity to (i) pay (or in the case of a Parent Entity, to pay a dividend to a direct or indirect holding company to enable such holding company to pay) operating costs and expenses and other corporate overhead costs and expenses (including (A) directors’ fees and expenses and administrative, legal, accounting, filing and similar expenses and (B) salary, bonus and other benefits payable to officers and employees of a Parent Entity or any direct or indirect holding company of a Parent Entity), in each case to the extent such costs, expense, fees, salaries, bonuses and benefits are attributable to the ownership or operations of the Borrower Group Members and are reasonable (as determined by the Initial Borrower in good faith) and incurred in the ordinary course of business, (ii) pay any estimated or final Federal, state and local US or non-US income Taxes due and payable by a Parent Entity or a direct or indirect holding company of a Parent Entity as a result of such Parent Entity or direct or indirect holding company being required to include (on a pass-through, consolidated, or similar basis) the Initial Borrower’s and/or the Restricted Subsidiaries’ income on the Parent Entity’s or such direct or indirect holding company’s income tax returns; provided, however, that any such payment in no event exceeds the Initial Borrower’s and the Restricted Subsidiaries’ liability in respect of such Taxes as computed on a separate entity basis, (iii) pay taxes that are not determined by reference to income, but which are imposed on a Parent Entity or any direct or indirect holding company of a Parent Entity as a result of such Parent Entity’s or such holding company’s ownership of the direct or indirect equity of a Parent Entity, but only if and to the extent that such Parent Entity or such holding company has not received cash or other property in connection with the events or transactions giving rise to such Taxes, (iv) to the extent of amounts paid by Unrestricted Subsidiaries to the Initial Borrower or any Restricted Subsidiary, pay the tax liabilities of Unrestricted Subsidiaries or tax liabilities of a Parent Entity or any direct or indirect holding company of a Parent Entity attributable to Unrestricted Subsidiaries, (v) pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of any Parent Entity or any direct or indirect holding company of a Parent Entity that owns no material assets other than such Parent Entity, (vi) finance any Investment permitted to be made hereunder other than Section 6.7(k), and so long as (A) such dividends shall be made substantially concurrently with the closing of such Investment and (B) such Parent Entity and the Initial Borrower shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Capital Stock) to be contributed to the Initial Borrower or a Restricted Subsidiary or (2) the merger or amalgamation of the Person formed or acquired into the Initial Borrower or a Restricted Subsidiary in order to consummate such Investment (and subject to the provisions of Sections 5.9 and 6.4), (vii) pay costs, fees and expenses

 

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related to any equity or debt offering (other than any such offering intended to benefit Subsidiaries of any such holding company other than a Parent Entity, the Initial Borrower and the Restricted Subsidiaries) or any strategic transactions (including Investments or Dispositions) related to its ownership of the Borrower Group Members and (viii) make payments permitted under Section 6.9 (other than Section 6.9(c), and only to the extent such payments have not been and are not expected to be made directly by any Borrower Group Member); provided, that dividends paid pursuant to this Section 6.6(c) (other than dividends paid pursuant to clause (ii) above) are used by such Parent Entity or any direct or indirect holding company of a Parent Entity for such purpose within 45 days of the receipt of such dividends or are refunded to the Initial Borrower;

(d) Restricted Payments in an amount up to 59.0% of the net cash proceeds of Sale and Leaseback Transactions in respect of the real properties of the Loan Parties set forth on Schedule 6.6(d), so long as after giving effect to such transactions and such Restricted Payments, the Sponsor’s net equity investment in the Initial Borrower and the Restricted Subsidiaries is not less than $50.0 million;

(e) any non-Wholly Owned Subsidiary of the Initial Borrower may declare and pay cash dividends to its equity holders generally so long as the Initial Borrower or the Restricted Subsidiary that owns the Capital Stock in the Restricted Subsidiary paying such dividends receives at least its proportionate share thereof (based upon the relative holding of the equity interests in the Restricted Subsidiary paying such dividends);

(f) any non-Guarantor Wholly Owned Subsidiary of the Initial Borrower may declare and pay cash dividends and make other Restricted Payments to the Initial Borrower or any Restricted Subsidiary of the Initial Borrower that owns the equity interests in such non-Guarantor Wholly Owned Subsidiary;

(g) the Initial Borrower may pay dividends to permit a Parent Entity or any direct or indirect holding company of a Parent Entity to fund the payment or reimbursement of fees and expenses (including fees and expenses of attorneys, accountants and financial advisors but excluding underwriting commissions) incurred by any such Parent Entity or holding company, the Sponsor or their respective affiliates in connection with any proposed IPO (whether or not consummated) of a Parent Entity or any such holding company;

(h) to the extent constituting Restricted Payments, the Borrower Group Members may enter into and consummate transactions permitted by Section 6.4 or Section 6.7(d) or (h);

(i) repurchases of Capital Stock in the Initial Borrower, any other Parent Entity or any Borrower Group Member deemed to occur upon exercise of stock options or warrants or similar rights if such Capital Stock represents a portion of the exercise price of such options or warrants or similar rights shall be permitted;

(j) any Borrower Group Member may pay cash in lieu of fractional Capital Stock in connection with any dividend, split or combination thereof (or may dividend such cash to any Parent Entity to allow any Parent Entity to do the same);

(k) following the consummation of the IPO, dividends may be declared and paid to a Parent Entity to permit any Parent Entity or any direct or indirect holding company of a Parent Entity to pay dividends and make distributions to, or repurchase or redeem its Capital Stock from, its public equity holders, in an amount not to exceed 6.00% per annum of the net proceeds received by or contributed to the Initial Borrower in or from such IPO;

 

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(l) any dividend or distribution may be paid within 60 days after the date of declaration thereof, if at the date of declaration (i) such payment would have complied with the provisions of this Agreement and (ii) no Event of Default had occurred and was continuing;

(m) Restricted Payments in an aggregate amount not to exceed the amount of Excluded Contributions;

(n) so long as the Payment Conditions are satisfied, the Initial Borrower and the Subsidiaries may make unlimited Restricted Payments;

(o) other Restricted Payments in an aggregate amount not to exceed the greater of $30.0 million and 20.0% of Consolidated EBITDA for the Relevant Reference Period, less any amount of Specified Prepayment made in reliance on this clause (o); and

(p) distributions or payments of Permitted Receivables Financing Fees, sales, contributions and other transfers of Permitted Receivables Financing Assets and purchases of Permitted Receivables Financing Assets, in each case, in connection with a Permitted Receivables Financing; and

(q) dividends or other distributions of Capital Stock of, or Indebtedness owed to the Initial Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (unless the Unrestricted Subsidiary’s principal asset is cash or Cash Equivalents).

6.7 Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting an ongoing business from, or make any other investment in, any other Person (all of the foregoing, “Investments”), except:

(a) extensions of trade credit or the holding of receivables in the ordinary course of business and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

(b) Investments in cash and Cash Equivalents;

(c) Investments existing (or committed to be made) on the Closing Date and identified on Schedule 6.7(c) and any modification, replacement, renewal, reinvestment or extension thereof (provided, that the amount of the original Investment (or the committed amount) is not increased except by the terms of such original Investment or commitment or as otherwise permitted by this Section 6.7);

(d) loans and advances to employees, officers, directors, managers and consultants of a Parent Entity (or any direct or indirect parent company thereof to the extent relating to the business of the Parent Entities or the Borrower Group Members) or any Borrower Group Member in the ordinary course of business (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes, (ii) in cash in connection with such Person’s purchase of Capital Stock of any Parent Entity (or any direct or indirect parent thereof; provided, that, the amount of such loans and advances used to acquire such Capital Stock shall be contributed to the Initial Borrower in cash) and (iii) for any other purpose in an aggregate amount outstanding under clauses (i) through (iii) not to exceed $2.5 million at any time;

(e) [reserved];

 

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(f) Investments by the Borrower Group Members constituting the purchase or other acquisition of all or substantially all of the property and assets or businesses of any Person or all or substantially all of the assets constituting a business unit, a line of business or division of such Person, or Capital Stock in a Person that, upon the consummation thereof, will be, or will become part of, a Wholly Owned Subsidiary of the Initial Borrower (including as a result of a merger, amalgamation or consolidation) (each, a “Permitted Acquisition”); provided, that

(i) immediately prior to and after giving effect to any such purchase or other acquisition, no Event of Default shall have occurred and be continuing;

(ii) all of the applicable provisions of Section 5.9 and the Security Documents have been or will be complied with in respect of such Permitted Acquisition (other than to the extent any Subsidiary purchased or acquired in such Permitted Acquisition is designated as an Unrestricted Subsidiary pursuant to Section 5.13 or is otherwise an Excluded Subsidiary);

(iii) the aggregate amount of such Investments by Borrower Loan Parties in assets that are not (or do not become) owned by a Borrower Loan Party or in Capital Stock of Persons that do not become Borrower Loan Parties shall not exceed $15.0 million, unless the Payment Conditions are satisfied at the time such Investment is made; and

(iv) any Person, property, assets or divisions acquired in accordance with this clause (f) shall be in the same or a generally related or ancillary line of business as the Borrower Group Members.

(g) Investments received in connection with the workout, bankruptcy or reorganization of, insolvency or liquidation of, or settlement of claims against and delinquent accounts of and disputes with, franchisees, customers and suppliers, or as security for any such claims, accounts and disputes, or upon the foreclosure with respect to any secured Investment;

(h) advances of payroll payments to employees, officers, directors and managers of the Initial Borrower and the Restricted Subsidiaries in the ordinary course of business;

(i) Investments in joint ventures consisting of the transfer to such joint venture of a going concern business relating to the commercial and industrial insulation division, representing not more than 15.0% of Consolidated EBITDA for the Relevant Reference Period; provided that, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio (with the denominator calculated net of up to $45.0 million of Indebtedness) shall not exceed 5.00 to 1.00 as of the date of such Investment;

(j) Investments consisting of licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(k) intercompany Investments by any Borrower Group Member that is (i) a Borrower Loan Party in any other Loan Party, (ii) a Non-Loan Party Subsidiary in any Borrower Group Member, (iii) a Borrower Loan Party in any Non-Loan Party Subsidiary or joint venture, or in a Restricted Subsidiary to enable such Restricted Subsidiary to make Investments in joint ventures (provided, that the aggregate amount of such Investments under this clause (k)(iii) does not exceed the greater of $35.0 million and 25.0% of Consolidated EBITDA for the Relevant Reference Period), (iv) the Borrower or a Restricted Subsidiary in any Restricted Subsidiary in the ordinary course of business

 

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(provided, that the aggregate amount of such Investments under this clause (k)(iv) does not exceed the greater of $35.0 million and 25.0% of Consolidated EBITDA for the Relevant Reference Period) and (v) an Excluded Subsidiary in another Excluded Subsidiary;

(l) Investments consisting of promissory notes and other deferred payment obligations and noncash consideration delivered as the purchase consideration for a Disposition permitted by Section 6.5;

(m) contributions to a “rabbi” trust for the benefit of employees or other grantor trust subject to claims of creditors in the case of a bankruptcy of the Initial Borrower;

(n) Borrower Group Members may endorse negotiable instruments and other payment items for collection or deposit in the ordinary course of business or make lease, utility and other similar deposits in the ordinary course of business;

(o) Investments consisting of obligations under Hedge Agreements permitted by Section 6.2;

(p) Investments consisting of Restricted Payments permitted by Section 6.6;

(q) Investments of any Person that becomes (or is merged or consolidated or amalgamated with) a Restricted Subsidiary of the Initial Borrower on or after the date hereof on the date such Person becomes (or is merged or consolidated or amalgamated with) a Restricted Subsidiary of the Initial Borrower; provided, that (i) such Investments exist at the time such Person becomes (or is merged or consolidated or amalgamated with) a Restricted Subsidiary, and (ii) such Investments are not made in anticipation or contemplation of such Person becoming (or merging or consolidating or amalgamated with) a Restricted Subsidiary;

(r) Investments consisting of deposits made in accordance with clauses (c), (d), (o), (u), (y), (z)(ii) or (ee) of Section 6.3;

(s) other Investments in an aggregate amount not to exceed the greater of $35.0 million and 25.0% of Consolidated EBITDA for the Relevant Reference Period;

(t) other Investments so long as the Payment Conditions are satisfied;

(u) deposits made in the ordinary course of business to secure the performance of leases or in connection with bidding on government contracts;

(v) advances in connection with purchases of goods or services in the ordinary course of business;

(w) Guarantee Obligations, letters of credit and similar obligations in respect of obligations not constituting Indebtedness for borrowed money entered into in the ordinary course of business;

(x) Investments consisting of Liens permitted under Section 6.3;

(y) Investments consisting of transactions permitted under Section 6.4, except for Section 6.4(e);

 

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(z) Investments to the extent that payment for such Investments is made solely with Qualified Capital Stock of a Parent Entity or Capital Stock of any direct or indirect parent company of a Parent Entity;

(aa) (i) Investments in a Permitted Receivables Financing Subsidiary or any Investment by a Permitted Receivables Financing Subsidiary in any other Person in connection with a Permitted Receivables Financing; provided, however, that any such Investment in a Permitted Receivables Financing Subsidiary is in the form of a contribution of additional Permitted Receivables Financing Assets and (ii) distributions or payments by such Permitted Receivables Financing Subsidiary of Permitted Receivables Financing Fees;

(bb) Investments made in connection with the Transactions;

(cc) loans and advances to a Parent Entity (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to a Parent Entity (or such direct or indirect parent) in accordance with Section 6.6;

(dd) Investments funded with Excluded Contributions;

(ee) the Initial Borrower and the Restricted Subsidiaries may acquire Capital Stock in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to the Initial Borrower or any of the Restricted Subsidiaries or as security for any such Indebtedness or claim;

(ff) Investments by an Unrestricted Subsidiary entered into prior to the day such Unrestricted Subsidiary is redesignated as a Restricted Subsidiary pursuant to Section 5.13 provided that such Investment was not entered into in contemplation of such Unrestricted Subsidiary becoming a Restricted Subsidiary; and

(gg) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property, in any case, in the ordinary course of business;

provided, that for purposes of covenant compliance, (x) the amount of any Investment at any time shall be the amount actually invested (measured at the time made), without adjustment for subsequent changes in the value of such Investment, net of all Returns on such Investment up to the original amount of such Investment and (y) the Initial Borrower shall have the option of making the applicable determination required by this Section 6.7, and any related determinations required by Section 6.1, 6.2, 6.3 or 6.10, as applicable, as of the date the definitive documentation for the relevant Investment is executed (other than any determination with respect to the occurrence of a Specified Default) (and the applicable financial ratios, Excess Availability or basket shall be calculated as if the Investment and other Pro Forma Transactions in connection therewith, were consummated on such date until consummated or terminated); provided that (i) Excess Availability is subject to the limits of the Acquired Asset Borrowing Base, if applicable, (ii) the foregoing proviso shall be not applicable for purposes of Section 4.2 (other than Section 4.2(a) and (b) to the extent set forth in Section 2.20(c)) and (iii) if the Initial Borrower elects to have such determinations occur as of the date such definitive agreement or redemption or prepayment notice, any related incurrence of Indebtedness or Liens shall be deemed to have occurred on such date and outstanding thereafter for purposes of subsequently calculating any ratios under this Agreement after such date and before the consummation of such Investment and to the extent baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated Total Assets or Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or

 

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determining the permissibility of other transactions (not related to such Investment) shall not reflect such Investment until it is closed; provided, further, that any intercompany Investment permitted above that is in the form of a loan or advance owed to (A) a Borrower Loan Party shall be evidenced by an intercompany note (individually or pursuant to a global note (which global note may be a Subordinated Intercompany Note)) and pledged by such Borrower Loan Party as Collateral pursuant to the Security Documents, and (B) a Non-Loan Party Subsidiary by a Borrower Loan Party shall be subordinated and subject to and in accordance with the terms of a Subordinated Intercompany Note or such other note in form and substance reasonably satisfactory to the Administrative Agent; provided, further, that, subject to Section 1.6, in the event that a permitted Investment meets the criteria of more than one of the types of permitted Investments (at the time of incurrence), the Initial Borrower in its sole discretion may divide or classify all or any portion of such permitted Investment in any manner that complies with this definition and such permitted Investment shall be treated as having been made pursuant only to the clause or clauses of the definition of permitted Investment to which such permitted Investment has been classified provided, further, that Investments in Unrestricted Subsidiaries shall not exceed $35.0 million in the aggregate.

6.8 Limitation on Optional Payments of Junior Debt Instruments. Make any optional or voluntary payment, prepayment, repurchase or redemption of, or otherwise voluntarily or optionally defease or otherwise satisfy (a “Specified Prepayment”), any Junior Debt other than (i) a Specified Prepayment with the net cash proceeds of a Permitted Refinancing in respect of such Junior Debt (which Permitted Refinancing is permitted under Section 6.2), (ii) any Specified Prepayment so long as the Payment Conditions are satisfied, (iii) the conversion of such Junior Debt to Qualified Capital Stock of Holdings or Capital Stock of any direct or indirect parent company of Holdings, (iv) any Specified Prepayment made within nine (9) months of the final maturity date of such Junior Debt, (v) any Specified Prepayment made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock (other than Disqualified Capital Stock) or a substantially concurrent contribution to the equity (other than through the issuance of Disqualified Capital Stock or through an Excluded Contribution) of the Initial Borrower or (vi) other Specified Prepayments in an aggregate amount not to exceed the sum of (x) the greater of $30.0 million and 20.0% of Consolidated EBITDA for the Relevant Reference Period and (y) any unused portion of the basket set forth in Section 6.6(o) at the time of determination; provided, that in the case of clause (i), (ii), (iii), (v) or (vi), the Initial Borrower shall have the option of making the applicable determination, and any related determinations required by Section 6.1, 6.2, 6.3 or 6.10, as applicable, as of the date the redemption or prepayment notice is given (and the Payment Conditions and any other Pro Forma Transactions in connection therewith shall thereafter be calculated and determined as if such Specified Prepayment were consummated on such date until consummated or terminated). “Specified Prepayment” shall not include regularly scheduled interest payments and payments of fees, expenses and indemnification obligations.

6.9 Limitation on Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than Holdings, any Restricted Subsidiary or any Person that becomes a Restricted Subsidiary as a result of such transaction) unless such transaction is otherwise permitted under this Agreement and is on fair and reasonable terms no less favorable to the Initial Borrower and the Restricted Subsidiaries, taken as a whole, than could be obtained in a comparable arm’s-length transaction with a Person that is not an Affiliate. Notwithstanding the foregoing, the Initial Borrower and the Restricted Subsidiaries may:

(a) (x) unless a Specified Default has occurred and is continuing, pay Permitted Management Fees (provided, that such amounts accrued but not permitted to be paid due to the

 

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continuance of a Specified Default may be paid once such Specified Default is cured or waived in accordance with Section 9.2); and (y) pay expenses, indemnification claims and other amounts (in each case, other than Permitted Management Fees) pursuant to the Management Agreement;

(b) enter into and consummate the transactions listed on Schedule 6.9(b);

(c) make Restricted Payments permitted pursuant to Section 6.6;

(d) make Investments (i) in Unrestricted Subsidiaries permitted by Section 6.7 and (ii) in any Person to the extent permitted by Section 6.7(a), (c), (d), (h), (w), (cc) or (dd) (provided, that any Investment in a Person permitted under Section 6.7 shall be permitted under this Section 6.9(d) to the extent such Investment constitutes a transaction with an Affiliate solely because a Borrower Group Member owns any Capital Stock in, or controls such Person);

(e) consummate the Transactions (including the issuance of Capital Stock to any officer, director, employee or consultant of the Initial Borrower or any of its Subsidiaries or any direct or indirect parent of the Initial Borrower) and transactions related to or necessary or contemplated in connection with any IPO (whether or not consummated), and, in each case, pay fees and expenses related to thereto;

(f) enter into employment and severance arrangements with officers, directors and employees of Holdings (or any direct or indirect parent company of Holdings) and the Restricted Subsidiaries and, to the extent relating to services performed for Holdings and the Restricted Subsidiaries (as determined in good faith by the senior management of the relevant Person), pay director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification and expense reimbursement arrangements; provided, that any purchase of Capital Stock of Holdings (or any direct or indirect holding company of Holdings) in connection with the foregoing shall be subject to Section 6.6;

(g) make customary payments to the Sponsor or another Permitted Investor or any of their respective Affiliates for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities (including in connection with acquisitions or divestitures), which payments are approved by the majority of the members of the Board of Directors or a majority of the disinterested members of the Board of Directors of Holdings in good faith;

(h) make payments to or receive payments from, and enter into and consummate transactions with, joint ventures (to the extent any such joint venture is only an Affiliate as a result of Investments by the Initial Borrower and the Restricted Subsidiaries in such joint venture) in the ordinary course of business to the extent otherwise permitted hereunder;

(i) pay reasonable out-of-pocket costs and expenses relating to registration rights and indemnities provided to holders of Capital Stock of a Parent Entity or any direct or indirect parent company thereof pursuant to any stockholders agreement or registration and participation rights agreement as in effect on the Closing Date or entered into after the Closing Date in connection with any financing transaction, the net proceeds of which are contributed to the Initial Borrower;

(j) enter into transactions between the Initial Borrower or any Restricted Subsidiary and any Person other than an Unrestricted Subsidiary which would constitute a transaction with an Affiliate solely because a director of such Person is also a director of the Initial Borrower or any direct or indirect parent of the Initial Borrower; provided, however, that such director abstains from voting as a

 

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director of the Initial Borrower or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(k) any transaction between or among the Initial Borrower or any Restricted Subsidiary and any Person that is an Affiliate of the Initial Borrower or any Restricted Subsidiary deemed to exist solely because the Initial Borrower or a Restricted Subsidiary or any Affiliate of the Initial Borrower or a Restricted Subsidiary, any Permitted Investor or any Affiliate of a Permitted Investor owns an equity interest in or otherwise controls such Affiliate;

(l) engage in the non-exclusive licensing of Intellectual Property in the ordinary course of business to permit the commercial exploitation of Intellectual Property between or among Affiliates of the Initial Borrower;

(m) [reserved];

(n) payment to any Permitted Investor of all out of pocket expenses incurred by such Permitted Investor in connection with its direct or indirect investment in the Initial Borrower and the Subsidiaries;

(o) (i) investments by Affiliates in securities of the Initial Borrower or any of their Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Affiliates in connection therewith) so long as the investment is being offered by the Initial Borrower or such Restricted Subsidiary generally to other non-affiliated third party investors on the same or more favorable terms and (ii) payments to Affiliates in respect of securities of the Initial Borrower or any of their Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Initial Borrower and the Restricted Subsidiaries, in each case, in accordance with the terms of such securities;

(p) transactions entered into by an Unrestricted Subsidiary with an Affiliate prior to the day such Unrestricted Subsidiary is redesignated as a Restricted Subsidiary as described in Section 5.13; provided that such Investment was not entered into in contemplation of such Unrestricted Subsidiary becoming a Restricted Subsidiary; and

(q) enter into transactions with respect to which the Initial Borrower or any of the Restricted Subsidiaries, as the case may be, obtains a letter from an independent financial advisory, investment banking or appraisal firm stating that such transaction is fair to the Initial Borrower or such Restricted Subsidiary from a financial point of view or meets the requirements of the first sentence of this Section 6.9.

6.10 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Borrower Group Member of real or personal property which has been or is to be sold or transferred by any Borrower Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Borrower Group Member (a “Sale and Leaseback Transaction”) to the extent the net cash proceeds of all such Sale and Leaseback Transactions during the term of this Agreement are in excess of $20.0 million in the aggregate; unless (a) the sale of such property is made for cash consideration in an amount not less than the fair market value (as reasonably determined by the Initial Borrower in good faith) of such property, (b) such Sale and Leaseback Transaction is permitted by Section 6.5 and is consummated within 180 days after the date on which such property is sold or transferred, (c) any Liens arising in connection with such Borrower Group Member’s use of the property are permitted by Section 6.3(r) and (d) either (i) the Total Leverage Ratio, determined on a Pro Forma

 

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Basis at the time of and after giving effect to such Sale and Leaseback Transaction (but without netting the cash proceeds from such Sale and Leaseback Transaction), is equal to or less than 6.00:1.00 as of the date of such Sale and Leaseback Transaction or (ii) the net cash proceeds of such Sale and Leaseback Transaction shall be applied to mandatorily prepay Indebtedness of the Borrower Group Members.

6.11 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Borrower Group Member to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations other than (a) this Agreement (including any Permitted Amendment), the other Loan Documents, the Senior Secured Notes Documents, any Senior Secured Bridge Documents, or any Guarantee Obligations in respect of any of the foregoing, (b) any agreements governing any Indebtedness permitted by Section 6.2(f), (g), (o) or (y), any Refinancing Indebtedness with respect to any of the foregoing or Guarantee Obligations in respect of any of the foregoing (provided, that in the case of this clause (b), such prohibitions or limitations in documentation evidencing such Indebtedness are no more restrictive, when taken as a whole, than those in effect under the Loan Documents and the Senior Secured Note Documents prior to the relevant incurrence of such Indebtedness), (c) any agreements governing any Indebtedness permitted by Section 6.2(c) and any other purchase money Indebtedness, Attributable Indebtedness or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed by or the subject of such Indebtedness and the proceeds and products thereof), (d) any agreements governing Indebtedness of any Excluded Subsidiary permitted by Section 6.2 (in which case, any such prohibition or limitation shall only be effective against the assets of such Excluded Subsidiary and its Subsidiaries), (e) any agreements governing Indebtedness permitted by Section 6.2(g) (in which case any such prohibition shall only be effective against the assets permitted to be subject to Liens permitted by Section 6.3(k) and the proceeds thereof), (f) customary provisions in joint venture agreements and similar agreements that restrict transfer of assets of, or equity interests in, joint ventures, (g) licenses or sublicenses by any Borrower Group Member of Intellectual Property in the ordinary course of business (in which case any prohibition or limitation shall only be effective against the Intellectual Property subject thereto), (h) customary provisions (including customary net worth provisions) in leases, subleases, licenses and sublicenses that restrict the transfer thereof or the transfer of the assets subject thereto by the lessee, sublessee, licensee or sublicensee, (i) prohibitions and limitations arising by operation of law, (j) prohibitions and limitations that are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary, so long as such prohibitions and limitations were not created in contemplation of such Person becoming a Restricted Subsidiary and apply only to such Restricted Subsidiary, (k) customary restrictions that arise in connection with any Disposition permitted by Section 6.5 applicable pending such Disposition solely to the assets subject to such Disposition, (l) customary provisions contained in an agreement restricting assignment of such agreement entered into in the ordinary course of business, (m) customary restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (n) agreements existing and as in effect on the Closing Date and described in Schedule 6.11 or (o) restrictions imposed by any agreement governing Indebtedness entered into after the Closing Date and permitted under Section 6.2 that are, taken as a whole, in the good faith judgment of the Initial Borrower, no more restrictive with respect to the Initial Borrower or any Restricted Subsidiary than the then customary market terms for Indebtedness of such type, so long as the Initial Borrower shall have determined in good faith that such restrictions would not, or would not reasonably be expected to, restrict or impair, in any material respect, the ability of the Initial Borrower and the Restricted Subsidiaries to make any payments required under the Loan Documents.

6.12 Limitation on Restrictions on Restricted Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary (other than a Subsidiary Guarantor) to make Restricted Payments in respect of any Capital Stock of such Restricted Subsidiary held by any Borrower Loan Party or to Guarantee Obligations of any

 

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Borrower Loan Party except for such encumbrances or restrictions existing under or by reason of (i) this Agreement (including any Permitted Amendment), the other Loan Documents, the Senior Secured Notes Documents, any Senior Secured Bridge Documents, (ii) any agreements governing any Indebtedness permitted by Section 6.2(f), (g), (o) or (y) , or any Refinancing Indebtedness with respect to any of the foregoing or Guarantee Obligations in respect of any of the foregoing (provided, that in the case of this clause (ii), such encumbrances or restrictions in documentation evidencing such Indebtedness are no more restrictive in any material respect, when taken as a whole, than those in effect under the Loan Documents or the Senior Secured Notes Documents prior to the relevant incurrence of such Indebtedness), (iii) any agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary, solely with respect to such Restricted Subsidiary, (iv) customary net worth provisions contained in real property leases, subleases, licenses or permits entered into by any Borrower Group Member so long as such net worth provisions would not reasonably be expected to impair the ability of the Loan Parties to comply with their obligations under this Agreement or any of the other Loan Documents (as determined in good faith by the Initial Borrower), (v) any restriction with respect to Excluded Subsidiaries in connection with Indebtedness permitted by Section 6.2, (vi) to the extent not otherwise permitted under this Section 6.12, agreements, restrictions and limitations described in clauses (a) through (o) of Section 6.11, to the extent set forth in such clauses, (vii) restrictions with respect to the transfer of any asset contained in an agreement that has been entered into in connection with the disposition of such asset permitted hereunder and (viii) prohibitions and limitations arising by operation of law; and (ix) restrictions imposed by any agreement governing Indebtedness entered into after the Closing Date and permitted under Section 6.2 that are, taken as a whole, in the good faith judgment of the Initial Borrower, no more restrictive in any material respect with respect to the Borrowers or any Restricted Subsidiary than either (i) Section 6.6 of this Agreement or (ii) the then customary market terms for Indebtedness of such type, so long as, in the case of this clause (ii) only, the Initial Borrower shall have determined in good faith that such restrictions would not, or would not reasonably be expected to, restrict or impair, in any material respect, the ability of the Initial Borrower and the Restricted Subsidiaries to make any payments required under the Loan Documents.

6.13 Limitation on Lines of Business. Enter into any material line of business, either directly or through any Restricted Subsidiary, except for those businesses in which any Borrower Group Member is engaged on the date of this Agreement or that are reasonably related or ancillary thereto or reasonable extensions thereof.

6.14 Limitation on Activities of Parent Entities. No Parent Entity may, notwithstanding anything to the contrary in this Agreement or any other Loan Document, (a) (i) own any direct Subsidiary other than the Initial Borrower, an Intermediate Parent or a Subsidiary that will promptly be contributed to or merged or amalgamated into a Borrower or a Subsidiary Guarantor, (ii) own any material Investment (other than cash or Cash Equivalents and Investments in an Intermediate Parent, a Borrower and the Restricted Subsidiaries) unless such Investment will promptly be contributed to a Borrower or a Subsidiary Guarantor or (iii) create any Lien on the Capital Stock of the Initial Borrower (other than Permitted Liens) or (b) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations other than (i) those incidental to its ownership of the Capital Stock of the Initial Borrower or an Intermediate Parent, (ii) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance), (iii) the performance of its obligations with respect to the Management Agreement (if any), the Purchase Agreement and the other agreements contemplated by the Purchase Agreement, (iv) [reserved], (v) the issuance of Capital Stock, payment of dividends, making of loans and contributions to the capital of its Subsidiaries and guaranteeing the obligations of its Subsidiaries and making Investments, (vi) participating in tax, accounting and other administrative matters as a member of a consolidated group of companies, (vii) holding any cash or property received in connection with Restricted Payments made by a Borrower Group Member in accordance with Section 6.6 pending application thereof, (viii) providing

 

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indemnification to officers and directors, (ix) the incurrence of Indebtedness for any purpose relating to the business of the Borrowers and their Subsidiaries or to fund Restricted Payments or Investments relating to the business of the Borrowers and their Subsidiaries, in each case without limitations, and (x) activities incidental to the businesses or activities described in the foregoing clauses (b)(i) through (b)(ix).

6.15 Modification of Certain Agreements. Amend, modify or change (a) any Organizational Document of any Borrower Loan Party, (b) the terms of the Management Agreement, (c) the terms of the definitive documentation of any Junior Debt constituting Material Debt (other than any such amendment, modification or other change (w) that would extend the maturity or reduce the amount of any payment of principal thereof, reduce the rate or amount or extend the date for payment of interest thereon or relax or eliminate any covenant, event of default or other provision applicable to the Initial Borrower or any of the Restricted Subsidiaries, (x) that is pursuant to a refinancing permitted by Section 6.8(i), (y) to the extent such amendment, modification or other change is effective, or is to provisions that become applicable, after the then Latest Maturity Date hereunder (as determined as of the time of such amendment, modification or other change is made) or (z) if immediately after giving effect thereto such Junior Debt with such revised terms could be incurred pursuant to Section 6.2 (such determination to be made as if such Junior Debt were incurred at such time and had not previously been incurred)) or (d) the terms of any Senior Secured Notes Document, any Senior Secured Bridge Document to the extent governing any Material Debt (if such amendment, modification or change would be prohibited by the terms of the Intercreditor Agreement), in each case, in any manner that is materially adverse to the interests of the Lenders, taken as a whole, as reasonably determined in good faith by the Initial Borrower (unless approved by the Administrative Agent); provided, that in the case of clause (a) above, any amendment, modification or change to the Organizational Documents of any Borrower Loan Party to effectuate a change in form of entity or organization or any other transaction permitted by Section 6.5 shall be permitted, subject to the requirements under the Security Documents.

6.16 Changes in Fiscal Periods. Permit the fiscal year of any Borrower Loan Party to end on a day other than December 31 or change the Borrowers’ method of determining fiscal quarters, without the prior written consent of the Administrative Agent (such consent not be unreasonably withheld, delayed or conditioned), in each case other than if such change is required by GAAP.

6.17 Canadian Defined Benefit Plans. (a) Establish or commence contributing to or otherwise participate in, or assume any liability or obligation in respect of, any Canadian Defined Benefit Plan; or (b) acquire an interest in any Person if such Person sponsors, administers, participates in, or has any liability or obligation in respect of, any Canadian Defined Benefit Plan.

SECTION 7. EVENTS OF DEFAULT

7.1 Events of Default. If any of the following events shall occur and be continuing:

(a) (i) the applicable Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or (ii) the applicable Borrower shall fail to pay any interest on any Loan or any Reimbursement Obligation, or any Loan Party shall fail to pay any other amount payable hereunder or under any other Loan Document, within five Business Days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement required to be furnished by such Loan Party at any time under this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date

 

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made or deemed made or furnished (provided, that, in each case, such materiality qualifier shall not be applicable with respect to any representation or warranty that is qualified or modified by materiality or Material Adverse Effect); or

(c) any Loan Party shall (i) fail to timely deliver a Borrowing Base Certificate pursuant to Section 5.2(c) and such failure shall continue unremedied for a period of five (5) days, (ii) default in the observance or performance of any agreement contained in Section 2.21(c) and such failure shall continue unremedied for a period of three (3) days or (iii) default in the observance or performance of any agreement contained clause (i) of Section 5.4(a) (with respect to the Initial Borrower only), Section 5.7(a) (provided, that the delivery of the notice referred to in such Section 5.7(a) at any time will cure any such Event of Default arising from the failure to timely deliver such notice of default), Section 5.10 or Section 6 (in the case of the Financial Covenant in Section 6.1, subject to Section 7.2); or

(d) any Loan Party shall default in the observance or performance of any covenant or other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 7.1), and such default shall continue unremedied for a period of 30 days following delivery of written notice thereof to Holdings and the Initial Borrower by the Administrative Agent; or

(e) Holdings or any Group Member shall (i) default in making any payment of any principal of any Indebtedness (excluding the Loans and other Indebtedness under the Loan Documents) on the scheduled or original due date with respect thereto beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness (other than, with respect to Indebtedness consisting of obligations in respect of Hedge Agreements, termination events or equivalent events pursuant to the terms of such Hedge Agreements and not as a result of any default thereunder by Holdings or any such Group Member) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with or without the giving of notice, the lapse of time or both, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable (provided, that this clause (iii) shall not apply to any secured Indebtedness that becomes due or subject to a mandatory offer to purchase as a result of the sale, transfer or other Disposition of assets securing such Indebtedness, if such sale, transfer or other Disposition is permitted hereunder and under the documents providing for such Indebtedness (and, for the avoidance of doubt, the aggregate principal amount of such Indebtedness shall not be included in determining whether an Event of Default has occurred under this paragraph (e))); provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clause (i), (ii) or (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness, the outstanding principal amount of which would in the aggregate constitute Material Debt; provided, further, that upon becoming an Event of Default, such Event of Default shall be deemed to have been remedied and shall no longer be continuing if any such defaults, events or conditions are remedied or waived prior to any termination of the Revolving Credit Commitments or acceleration of the Loans pursuant to the below provisions of this Section 7.1 by any of the holders or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holders or beneficiaries) and, after giving effect thereto, at such time, one or more defaults, events or conditions of

 

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the type described in clause (i), (ii) or (iii) of this paragraph (e) shall no longer be continuing with respect to an amount of Indebtedness that would in the aggregate constitute Material Debt; or

(f) (i) any Material Party shall commence any case, proceeding or other action (A) under any existing or future Debtor Relief Laws, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Material Party shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against or with respect to any Material Party any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or for any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Material Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Material Party shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Initial Borrower or any of the Borrowers shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

(g) (A) There occurs one or more ERISA Events; or (B) (i) any Person shall fail to comply with and perform in all material respects any of its obligations under and in respect of any Canadian Pension Plan or Canadian Multiemployer Plan (to the extent any may exist), including under any funding agreements and any applicable Requirements of Law (including any fiduciary, funding, investment and administration obligations with respect to a Canadian Pension Plan), or (ii) any Person shall fail to pay or remit any employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of any Canadian Pension Plan or Canadian Multiemployer Plan in accordance with the terms thereof, any funding agreements and any Requirements of Law; and in each case, in clause (A) or (B) above, such event or condition, together with all other such events or conditions, if any, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or

(h) one or more final judgments or decrees for the payment of money shall be entered against Holdings or any of its Restricted Subsidiaries involving for Holdings or any of its Restricted Subsidiaries, taken as a whole, a liability (to the extent not covered by insurance as to which the relevant insurance company has not denied coverage in writing) of $30.0 million or more, and all such judgments or decrees shall not have been satisfied, vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

(i) any Security Document that creates a Lien with respect to a material portion of the Collateral or the Intercreditor Agreement shall cease, for any reason (other than by reason of the express release thereof pursuant to the provisions of the Loan Documents), to be in full force and effect, or any Loan Party (or any of its Affiliates that has the power, directly or indirectly, to direct or cause the direction of the management and policies of such Loan Party) shall so assert in writing, or any Lien with respect to any material portion of the Collateral created by any of the Security Documents or pursuant to the Intercreditor Agreement shall cease to be enforceable and of the same effect and priority purported to be created thereby, except to the extent that (i) any of the foregoing results from the failure of any Agent or the Senior Secured Notes Trustee to maintain possession of certificates actually delivered to it representing securities pledged under the Security Documents or to file UCC or PPSA continuation statements or (ii) such loss is covered by a title insurance policy benefitting any Agent or the Lenders

 

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and the related insurer has not asserted in writing that such loss is not covered by such title insurance policy and has not denied coverage; or

(j) the guarantee contained in Section 2 of the US Guarantee and Collateral Agreement or either Canadian Guarantee and Collateral Agreement shall cease, for any reason (other than by reason of the express release thereof pursuant to the provisions of the Loan Documents), to be in full force and effect or any Loan Party (or any of its Affiliates that has the power, directly or indirectly, to direct or cause the direction of the management and policies of such Loan Party) shall so assert in writing (other than by reason of the express release thereof pursuant to the provisions of the Loan Documents); or

(k) any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to one or more of the Borrowers, the Commitments hereunder shall automatically and immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of LC Exposure, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to Holdings and the Borrowers declare the Revolving Credit Commitments to be terminated forthwith, whereupon the Revolving Credit Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to Holdings and the Borrowers, (x) declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of LC Exposure, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable and (y) subject to the terms and conditions of the Intercreditor Agreement and any other intercreditor arrangement entered into in connection with this Agreement, commence foreclosure actions with respect to the Collateral in accordance with the terms and procedures set forth in the Security Documents. In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the applicable Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount in immediately available funds equal to 103% of the aggregate then undrawn and unexpired amount of such Letters of Credit (and the applicable Borrower hereby grants to the Administrative Agent, for the ratable benefit of the applicable Secured Parties, a continuing security interest in all amounts at any time on deposit in such cash collateral account to secure the undrawn and unexpired amount of such Letters of Credit and all other Obligations). If at any time the Administrative Agent determines that any funds held in such cash collateral account are subject to any right or claim of any Person other than the Administrative Agent and the applicable Secured Parties or that the total amount of such funds is less than the aggregate undrawn and unexpired amount of outstanding Letters of Credit, the applicable Borrower shall, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in such cash collateral account, an amount equal to the excess of (a) such aggregate undrawn and unexpired amount over (b) the total amount of funds, if any, then held in such cash collateral account that the Administrative Agent determines to be free and clear of any such right and claim. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the applicable Borrower hereunder and under the other Loan Documents. After all such Letters of

 

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Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the applicable Borrower (or such other Person as may be lawfully entitled thereto).

7.2 Right to Cure.

(a) Notwithstanding anything to the contrary contained in Section 7.1, in the event the Initial Borrower fails to comply with the requirements of the Financial Covenant on the last day of any fiscal quarter (a “Test Date”), during the period beginning on the first day following the Test Date until the expiration of the tenth Business Day (the “Anticipated Cure Deadline”) subsequent to the date the Compliance Certificate to be delivered pursuant to Section 5.2(a) is required to be delivered with respect to such fiscal quarter, Holdings shall have the right to issue Capital Stock or obtain a contribution to its common equity, in each case, for cash and such amount to be contributed by Holdings to the Initial Borrower by way of subscription for shares or capital contribution (the “Cure Right”), and upon the receipt by the Initial Borrower of such cash (the “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right and request to the Administrative Agent to effect such recalculation, the Financial Covenant shall be recalculated giving effect to the following pro forma adjustments:

(i) Consolidated EBITDA shall be increased solely for such fiscal quarter (and any four fiscal quarter-period that includes such fiscal quarter), solely for the purpose of measuring the Financial Covenant and not for any other purpose under this Agreement, by an amount equal to the Cure Amount; and

(ii) if, after giving effect to the foregoing calculations, the Initial Borrower shall then be in compliance with the requirements of the Financial Covenant, the Initial Borrower shall be deemed to have satisfied the requirements of the Financial Covenant as of the relevant Test Date with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the Financial Covenant that had occurred shall be deemed cured for the purposes of this Agreement as of the applicable Test Date and shall be deemed to have never existed.

(b) Notwithstanding anything herein to the contrary (i) in each four-consecutive-fiscal-quarter period there shall be at least two fiscal quarters with respect to which the Cure Right is not exercised, (ii) during the term of this Agreement, the Cure Right may be exercised no more than five times, (iii) the Cure Amount shall be no greater than the amount required for purposes of causing the Initial Borrower to comply with the Financial Covenant as of the relevant Test Date, (iv) no Indebtedness repaid with the Cure Amount shall be deemed repaid for purposes of recalculating the Financial Covenant during the period in which the Cure Amount is included in the calculation of Consolidated EBITDA (it being understood that Indebtedness repaid with the Cure Amount shall be deemed repaid for all other purposes under this Agreement, including for purposes of determining if the Financial Covenant is in effect for subsequent periods), and (v) except to the extent of any reduction in Indebtedness from such proceeds contemplated by the parenthetical in clause (iv), the Cure Amount shall be disregarded for other purposes of this Agreement (including determining financial ratio-based conditions (subject to the terms of clause (iv) above) or basket amounts).

(c) Upon the Administrative Agent’s receipt of a notice from Holdings that it intends to exercise the Cure Right (a “Notice of Intent to Cure”), until the Anticipated Cure Deadline to which such Notice of Intent to Cure relates, (x) neither any Agent nor any other Secured Party shall exercise the right to accelerate payment of the Loans or terminate or suspend the Commitments and neither any Agent nor any other Secured Party shall exercise any right to foreclose on or take possession

 

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of the Collateral, in each case solely on the basis of an allegation of an Event of Default having occurred and being continuing under Section 7.1 due to failure by the Initial Borrower to comply with the requirements of the Financial Covenant for the applicable period and (y) the Borrowers shall not be entitled to request any Borrowing, and no Lender or Issuing Bank shall have any obligation to make any Loan or issue any Letter of Credit, during such period.

SECTION 8. THE AGENTS

8.1 Appointment. Each Lender and Issuing Bank hereby irrevocably designates and appoints the Administrative Agent and the Collateral Agent as the administrative agent and collateral agent, respectively, of such Lender and such Issuing Bank under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes each Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, each Lender and each Issuing Bank hereby authorizes the Agents to enter into each Security Document, the Intercreditor Agreement and any other intercreditor or subordination agreements contemplated hereby on behalf of and for the benefit of the Lenders and the other Secured Parties and agrees to be bound by the terms thereof. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Agents shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agents. The provisions of this Section 8 are solely for the benefit of Agents and Lenders and no Loan Party shall have any rights as a third party beneficiary of the provisions thereof. Each Agent shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any of the Loan Parties. The provisions of this Section 8 are solely for the benefit of Agents and Lenders and no Loan Party shall have any rights as a third party beneficiary of the provisions thereof. Each Agent shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any of the Loan Parties.

8.2 Delegation of Duties. The Agents may execute any of their duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agents shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected with reasonable care. Each Agent may exercise such powers, rights and remedies and perform such duties by or through its agents, employees or sub-agents, and any sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory, indemnification and other provisions of Sections 8.3, 8.4 and 8.7 shall apply to any of the Affiliates of the Agents. All of the rights, benefits, and privileges (including the exculpatory and indemnification provisions) of Sections, 8.3, 8.4 and 8.7 shall apply to any such sub-agent and Affiliates where named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent appointed by either Agent, (i) such sub-agent shall be a third party beneficiary under this Agreement with respect to all such rights, benefits and privileges (including exculpatory rights and rights to indemnification) and shall have all of the rights and benefits of a third party beneficiary, including an independent right of action to enforce such rights, benefits and privileges (including any exculpatory rights and rights to indemnification) directly without the consent or joinder of any other Person, against any or all Loan Parties and the Lenders, (ii) such rights, benefits and privileges (including exculpatory rights and rights to indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have obligations to the applicable Agent and not to any Loan Party, Lender or any

 

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other Person and no Loan Party, Lender or any other Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise, against such sub-agent.

8.3 Exculpatory Provisions. None of the Administrative Agent, the Collateral Agent, any Issuing Bank, nor any of their respective officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates shall be (i) liable to any other Credit Party for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any other Credit Party for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agents or Issuing Banks under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. Neither any Agent nor any Issuing Bank shall be under any obligation to any other Credit Party to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party. The Agents shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Agents be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, facsimile or email message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons (including any such any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, facsimile or email message, statement, order or other document or conversation exchanged between the Agents) and upon advice and statements of legal counsel (including counsel to Holdings or the Initial Borrower), independent accountants and other experts selected by such Agent and, with regard to the Administrative Agent, determination or other advice of Collateral Agent regarding any Borrowing Base, Reserves or related matters. The Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all affected Lenders) as it deems appropriate, and upon receipt of such instructions from Required Lenders (or such Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions, including for the avoidance of doubt refraining from any action that, in its opinion of its counsel, may be in violation of termination of property of a Defaulting Lender in violation of any Debtor Relief Law, or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all affected Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. No Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or (where so instructed) refraining from acting hereunder or any of

 

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the other Loan Documents in accordance with the instructions of the Required Lenders (or such other Lenders as may be required to give instructions hereunder).

8.5 Notice of Default. Neither Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless such Agent has received written notice from a Lender, Holdings or the Initial Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that any Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Agents shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all affected Lenders); provided, that unless and until the Agents shall have received such directions, each Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

8.6 Non-Reliance on the Agents and Other Lenders. Each Lender expressly acknowledges that neither any Agent nor any of its officers, directors, employees, agents, advisors, attorneys-in-fact or Affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any Affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the each Agent that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their Affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by an Agent hereunder, neither Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of a Loan Party that may come into the possession of such Agent or any of its officers, directors, employees, agents, advisors, attorneys-in-fact or Affiliates.

8.7 Indemnification. The Lenders agree to indemnify each Agent, each Issuing Bank and each of their officers, directors, employees, Affiliates, agents, advisors and controlling persons (each, an “Agent Indemnitee”) (to the extent not reimbursed by Holdings or the Borrowers and without limiting any obligation of Holdings or the Borrowers to do so), ratably according to their respective Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this Section 8.7 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs and expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent

 

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jurisdiction to have resulted from such Agent Indemnitee’s gross negligence, bad faith or willful misconduct. The agreements in this Section 8.7 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent hereunder. With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent hereunder, and the terms “Lender” and “Lenders” shall include each Agent in its individual capacity.

8.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders, the Collateral Agent and the Borrowers. If the Administrative Agent shall resign as Administrative Agent, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be subject to written approval by the Initial Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has been appointed as Administrative Agent by the date that is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and all payments, communications and determinations provided to be made by, to or through the Administrative Agent, shall instead be made by or to each Lender directly until such time, if any, as the Required Lenders, subject to written approval by the Initial Borrower (which approval shall not be unreasonably withheld or delayed), appoint a successor agent as provided for above. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Section 8 and of Section 9.5 shall continue to inure to its benefit.

8.10 Successor Collateral Agent. The Collateral Agent may resign as Collateral Agent upon 30 days’ notice to the Lenders, the Borrowers and the Administrative Agent. If the Collateral Agent shall resign as Collateral Agent, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be subject to written approval by the Initial Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Collateral Agent, and the term “Collateral Agent” shall mean such successor agent effective upon such appointment and approval, and the former Collateral Agent’s rights, powers and duties as Collateral Agent shall be terminated, without any other or further act or deed on the part of such former Collateral Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has been appointed as Collateral Agent by the date that is 30 days following a retiring Collateral Agent’s notice of resignation, the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Required Lenders, subject to written approval by the Initial Borrower (which approval shall not be unreasonably withheld or delayed), appoint a successor agent as provided for above. After any retiring Collateral Agent’s resignation as Administrative Agent, the provisions of this Section 8 and of Section 9.5 shall continue to inure to its benefit.

8.11 Initial Borrower as Borrower Agent. Each Additional Borrower hereby designates the Initial Borrower as its representative and agent (in such capacity, the “Borrower Agent”) for all purposes

 

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under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of Borrowing Base Certificates and financial reports, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Agents, the Issuing Banks or any Lender. The Initial Borrower hereby accepts such appointment as Borrower Agent. The Agents, the Issuing Banks and the Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by the Borrower Agent on behalf of any Borrower. The Agents, the Issuing Banks and the Lenders may give any notice or communication with a Borrower hereunder to the Borrower Agent on behalf of such Borrower. Each of the Agents, the Issuing Banks and the Lenders shall have the right, in its discretion, to deal exclusively with the Borrower Agent for any or all purposes under the Loan Documents. Each Borrower agrees that any notice, election, communication, representation, agreement or undertaking made on its behalf by the Borrower Agent shall be binding upon and enforceable against it. Anything contained herein to the contrary notwithstanding, no Borrower (other than the Borrower Agent) shall be authorized to request any Borrowing or Letter of Credit hereunder without the prior written consent of the Initial Borrower.

8.12 Collateral Matters. It is understood that different Persons may at any time be named as the Administrative Agent and as the Collateral Agent and in connection therewith, notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, in the event that an Agent makes any proposal to the other Agent with respect to the Collateral, Borrowing Base eligibility standards, Reserves, intercreditor and subordination arrangements, collateral information rights, access rights, appraisal rights, audit rights, cash management rights or control agreement rights (each such matter a “Collateral Matter”), other than any proposed adjustment or revision or interpretation of Borrowing Base eligibility standards or Reserves (each such matter, a “Borrowing Base Matter”), (x) if the Agents do not agree on a determination with respect to a Collateral Matter, the determination shall be made by the Administrative Agent or (y) if the Agents do not agree on a determination with respect to a Borrowing Base Matter, the determination shall be made by the Collateral Agent, and, in each case, as between the Agents and the Lenders its decision shall be final.

8.13 Hypothecary Representative. Without limiting the power of the Agents hereunder or under any other Loan Document, each Agent and each of the Lenders hereby appoints and designates the Administrative Agent as the hypothecary representative (within the meaning of Article 2692 of the Civil Code of Québec) of each Agent and the Lenders for the purposes of holding any security granted by any Loan Party under the laws of the Province of Québec as security for any indebtedness or other obligations of any Loan Party hereunder or under any Loan Document and, in such capacity, the Administrative Agent shall hold any such security granted under the laws of the Province of Québec as hypothecary representative in the exercise of the rights conferred thereunder. The execution by the Administrative Agent as hypothecary representative of any deeds of hypothec or other security granted by any Loan Party under the laws of the Province of Québec is hereby ratified and confirmed. Any Person who becomes an Agent or a Lender shall be deemed to have ratified and confirmed the appointment of the Administrative Agent as hypothecary representative. The Administrative Agent, acting as hypothecary representative, shall have the same rights, powers, immunities, indemnities and exclusions from liability as are prescribed in favor of the Administrative Agent hereunder, which shall apply mutatis mutandis to the Administrative Agent acting as hypothecary representative. In the event of the resignation of the Administrative Agent and appointment of a successor Administrative Agent, such successor Administrative Agent shall also constitute the successor hypothecary representative of the Agents and the Lenders for the purpose of holding the security referred to above, unless a successor hypothecary representative is otherwise appointed. Notwithstanding anything to the contrary in this Agreement, this provision shall be governed and construed in accordance with the laws of the Province of Québec.

 

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SECTION 9. MISCELLANEOUS

9.1 Notices. 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 facsimile, as follows:

(i) if to any of Holdings or the Borrowers, to it at:

LSF9 Cypress Holdings LLC

c/o Foundation Building Materials

2552 Walnut Avenue, Suite 160

Tustin, CA 92780

Attention: John Gorey

Facsimile: 714-734-3974

Telephone: 714-380-3127

E-mail: [email protected]

with copies (which shall not constitute notice) to:

Lone Star Americas Acquisitions LLC

2711 N. Haskell Avenue, Suite 1800

Dallas, TX 75204

Attention: General Counsel

Facsimile: 214-515-6924

Telephone: 214-515-6824

and

Gibson, Dunn & Crutcher LLP

200 Park Ave

New York, NY 10166

Attention: Joerg H. Esdorn

Facsimile: (212) 351-5276

E-mail: [email protected]

(ii) if to the Administrative Agent, to it at:

Goldman Sachs Bank USA

200 West Street

New York, NY 10282-2198

Attention: SBD Loan Operations

Telephone: 212-902-1099

Facsimile: 917-977-3966 / 646-769-7829

E-mail: [email protected]

(iii) if to the Collateral Agent, to it at:

Bank of America Business Capital

Attention: Carlos Gil or Portfolio Management

333 S. Hope Street, 13th Floor

CA9-193-13-33

 

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Los Angeles, CA 90071

(iv) if to any other Lender or Issuing Bank, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.

All notices and other communications given to any party hereto, in accordance with the provisions of this Agreement, shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service, or sent by fax or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 9.1, or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.1. As agreed to among Holdings, the Initial Borrower, the applicable Agent and the applicable Lenders from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable Person provided from time to time by such Person.

Each of Holdings and the Initial Borrower hereby agrees, unless directed otherwise by the applicable Agent or unless the electronic mail address referred to below has not been provided by the applicable Agent to Holdings and the Initial Borrower, that it will, and will cause its Subsidiaries to, provide to the applicable Agent all information, documents and other materials that it is obligated to furnish to the applicable Agent pursuant to the Loan Documents or to the Lenders under Section 5, including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (a) is or relates to a Borrowing Request, a notice pursuant to Section 2.6, or a notice requesting the issuance, amendment, extension or renewal of a Letter of Credit pursuant to Section 2.4, (b) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (c) provides notice of any Default or Event of Default under this Agreement or any other Loan Document or (d) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any Borrowing or other extension of credit hereunder (all such nonexcluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium that is properly identified in a format acceptable to the applicable Agent to an electronic mail address as directed by the applicable Agent. In addition, Holdings and the Initial Borrower agree, and agree to cause its Subsidiaries, to continue to provide the Communications to the applicable Agent or the Lenders, as the case may be, in the manner specified in the Loan Documents but only to the extent requested by the applicable Agent.

Each of Holdings and the Initial Borrower hereby acknowledges that (a) the Administrative Agent will make available to the Lenders and the Issuing Banks materials and/or information provided by, or on behalf of, the Borrowers hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials on Intralinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that wish to receive information and documentation that is (x) of a type that would be publicly available if Holdings and its Subsidiaries were public reporting companies or (y) does not contain MNPI (collectively, “Public Lender Information”)) (each, a “Public Lender”). Each of Holdings and the Borrowers hereby agrees that (i) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (ii) by marking Borrower Materials “PUBLIC”, the Borrowers shall be deemed to have authorized the Agents and the Lenders to treat such Borrower Materials as not containing any Private Lender Information (as defined below) (provided, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.12); (iii) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public

 

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Investor”; and (iv) each Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked as “Public Investor”. Notwithstanding the foregoing, the following Borrower Materials shall be deemed to be marked “PUBLIC” unless Holdings notifies the Administrative Agent promptly that any such document contains Private Lender Information: (A) the Loan Documents, (B) notification of changes in the terms of the Revolving Credit Facility and (C) all information delivered pursuant to Section 5.1 and Section 5.2(a). “Private Lender Information” means any information and documentation that is not Public Lender Information.

Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Communications that are not made available through the “Public Side Information” portion of the Platform and that may contain MNPI.

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

Each Agent agrees that the receipt of the Communications by such Agent at its electronic mail address set forth above shall constitute effective delivery of the Communications to such Agent for purposes of the Loan Documents. Each Lender agrees that receipt of notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender agrees to notify each Agent in writing (including by electronic communication) from time to time of such Lender’s electronic mail address to which the foregoing notice may be sent by electronic transmission and that the foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the right of any Agent or any Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

9.2 Waivers; Amendments. (a) No failure or delay by any Agent, any Issuing Bank or any Lender in exercising any right or power hereunder 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

 

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power. The rights and remedies of each Agent, each Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by Holdings or the Borrowers therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.2, 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 making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

(b) None of this Agreement, any other Loan Document or any provision hereunder or thereunder may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by Holdings, the Initial Borrower (and, if applicable, any other Borrowers) and the Required Lenders or by Holdings, the Initial Borrower (and, if applicable, any other Borrowers) and the Administrative Agent with the consent of the Required Lenders; provided, that, notwithstanding the foregoing:

(A) solely with the written consent of each Lender and Issuing Bank directly and adversely affected thereby (but without the necessity of obtaining the consent of the Required Lenders, other than in the case of clause (1) below, which shall require the consent of each Lender increasing its Commitments and the Required Lenders if such increase is effectuated other than pursuant to the provisions under this Agreement specifically permitting increases of commitments without the further approval of Required Lenders), any such agreement may:

(1) increase the Commitment of any Lender (other than with respect to any Incremental Revolving Commitments pursuant to Section 2.20 in which such Lender has agreed to be an Additional Lender), it being understood that a waiver of any condition precedent set forth in Section 4.2 or the waiver of any Default, Event of Default, mandatory prepayment or mandatory reduction of Commitments shall not constitute an increase of any Commitment of any Lender;

(2) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees or premiums payable hereunder (except (x) in connection with the waiver of applicability of any post-Default increase in interest rates (which waiver shall be effective with the consent of the Required Lenders) and (y) that any change in Historical Excess Availability, Historical Average Utilization or any other definition used in the calculation of such rate of interest or fees (or any component definition thereof) shall not constitute a reduction in any rate of interest or any fee for purposes of this clause (2)); or

(3) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees or premiums payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment; it being understood that a waiver of any condition precedent set forth in Section 4.2 or the waiver of any Default, mandatory prepayment or mandatory reduction of Commitments shall not constitute a postponement of the scheduled date of payment of principal of any Loan or expiration of any Commitment of any Lender;

 

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(B) solely with the written consent of the Lenders (other than a Defaulting Lender) holding 66.7% of the outstanding Revolving Credit Commitments and/or Revolving Credit Exposure, any such agreement may increase advance rates or make other modifications to any Borrowing Base (or any constituent definitions to the extent used therein) that have the effect of increasing availability thereunder;

(C) solely with the written consent of each Lender (other than a Defaulting Lender), any such agreement may:

(1) change Section 2.17(b) or (c) or Section 2.21(c) in a manner that would alter the pro rata sharing of payments required thereby, or change the application of proceeds provision in either Section 6.4 of the US Guarantee and Collateral Agreement or either Canadian Guarantee and Collateral Agreement or Sections 4.2 and 4.3 of the Intercreditor Agreement (or the corresponding provision in any other intercreditor agreement);

(2) change any of the provisions of this Section 9.2 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or grant any consent hereunder;

(3) except as otherwise expressly provided in Section 9.15 or in the US Guarantee and Collateral Agreement or either Canadian Guarantee and Collateral Agreement, release all or substantially all of the Collateral or release Guarantors from their guarantee obligations under the US Guarantee and Collateral Agreement or either Canadian Guarantee and Collateral Agreement representing all or substantially all of the value of such guarantees, taken as a whole;

(4) impose additional restrictions on the ability of any Lender to assign any of its rights and obligations hereunder; or

(5) change the definition of “Qualified Jurisdiction”;

provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of any Agent or any Issuing Bank hereunder in a manner adverse to such Agent or such Issuing Bank, as the case may be, without the prior written consent of such Agent or such Issuing Bank, as the case may be including any amendment of this Section 9.2. Notwithstanding the foregoing, amendments, waivers and other modifications to the provisions of any Loan Document in a manner that by its terms adversely affects the rights or obligations of Lenders holding Loans or Commitments of a particular Class (but not the rights or obligations of Lenders holding Loans or Commitments of any other Class) will require only the prior written consent of Lenders holding the requisite percentage under this Section 9.2(b) of the outstanding Loans and unused Commitments of such Class (as if such Class were the only Class of Loans and Commitments then outstanding under this Agreement), Holdings and the Initial Borrower (and, if applicable, any other Borrower).

(c) Notwithstanding anything to the contrary contained in this Section 9.2, the Administrative Agent, Holdings and the Initial Borrower, in their sole discretion and without the consent or approval of any other party, may amend, modify or supplement any provision of this Agreement or any other Loan Document to (i) amend, modify or supplement such provision or cure any ambiguity, omission, mistake, error, defect or inconsistency, and such amendment, modification or supplement shall

 

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become effective without any further action or consent of any other party to any Loan Documents if the same is not objected to in writing by the Required Lenders within five Business Days following receipt of notice thereof (provided, that, if the Required Lenders make such objection in writing, such amendment, modification or supplement shall not become effective without the consent of the Required Lenders), and (ii) to permit additional affiliates of Holdings to guarantee the Obligations and/or provide Collateral therefor. Such amendments shall become effective without any further action or consent of any other party to any Loan Document.

(d) Notwithstanding anything in this Agreement or any other Loan Document to the contrary, no Lender consent is required to effect any amendment or supplement to the Intercreditor Agreement or any other intercreditor arrangements entered into pursuant to this Agreement (i) that is for the purpose of adding the holders of any additional Indebtedness permitted hereunder, including any Refinancing Indebtedness (or a Senior Representative with respect thereto) as parties thereto, as expressly contemplated by the terms of the Intercreditor Agreement or any other or any other intercreditor arrangements entered into pursuant to this Agreement (it being understood that any such amendment or supplement may make such other changes to the applicable intercreditor agreement as, in the good faith determination of the Administrative Agent, are required to effectuate the foregoing; provided, that such other changes are not adverse, in any material respect, to the interests of the Lenders) or (ii) that is expressly contemplated by the Intercreditor Agreement or any other or any other intercreditor arrangements entered into pursuant to this Agreement (it being understood that any such amendment or supplement may make such other changes to the applicable intercreditor agreement as, in the good faith determination of the Administrative Agent, are required to effectuate the foregoing; provided, that such other changes are not adverse, in any material respect, to the interests of the Lenders); provided, further, that no such agreement shall directly and adversely amend, modify or otherwise affect the rights or duties of any Agent hereunder or under any other Loan Document without the prior written consent of such Agent.

(e) Notwithstanding anything in this Agreement or any other Loan Document to the contrary, Holdings and the applicable Borrowers may enter into Incremental Facility Amendments in accordance with Section 2.20 and Extension Amendments in accordance with Section 2.22 and joinder agreements with respect thereto in accordance with such sections, and such Incremental Facility Amendments and Extension Amendments and joinder agreements may effect such amendments to the Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, Holdings and the Initial Borrower, to give effect to the existence and the terms of the Incremental Facility or Extension, as applicable, and will be effective to amend the terms of this Agreement and the other applicable Loan Documents (including to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other applicable Loan Documents with the other Revolving Credit Loans, and the accrued interest and fees in respect thereof and to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders), in each case, without any further action or consent of any other party to any Loan Document.

(f) Notwithstanding anything to the contrary contained in this Section 9.2 or any other Loan Document, guarantees, collateral security documents and related documents executed in connection with this Agreement may be in a form reasonably determined by the Administrative Agent and may be, together with this Agreement, amended and waived with the consent of the Administrative Agent at the request of Holdings or the Initial Borrower without the need to obtain the consent of any other Lender if such amendment or waiver is delivered in order (i) to comply with local Requirements of Law or advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement or any other Loan Documents. In addition, if the Administrative Agent and the Initial Borrower shall have jointly

 

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identified an obvious error or any error or omission of a technical nature in this Agreement or any other Loan Document, then the Administrative Agent and the Initial Borrower shall be permitted to amend such provision without further action or consent by any other party; provided that the Required Lenders shall not have objected to such amendment within 5 Business Days after receiving a copy thereof.

(g) Notwithstanding the foregoing, this Agreement may be amended to increase the LC Sublimit with the written consent of the applicable Issuing Banks and the Administrative Agent.

(h) Notwithstanding anything to the contrary contained in this Section 9.2, the Administrative Agent may, in its sole discretion and without the consent or approval of any other party (but in consultation with Holdings), amend, modify or supplement any provision of this Agreement or any other Loan Document in accordance with the provisions under the heading “Market Flex” in the Fee Letter prior to the “Syndication Date” as defined in the Fee Letter.

9.3 Expenses; Indemnity; Damage Waiver. (a) The Initial Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by each Agent and its Affiliates, including the reasonable fees, disbursements and other charges of legal counsel for each Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof, , the reasonable fees and expenses of consultants and appraisal firms in connection with inventory appraisals and field examinations required hereunder and the Administrative Agent’s standard charges for examination activities and appraisal reviews, (ii) all reasonable and documented 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 any Agent, any Issuing Bank or any Lender, including the fees, charges and disbursements of legal counsel for each Agent, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 9.3(a), including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided, that the Initial Borrower’s obligations under this Section 9.3(a) for fees and expenses of legal counsel shall be limited to fees and expenses of (x) one primary outside legal counsel in each of the United States and Canada for all Persons described in clauses (i), (ii) and (iii) above, taken as a whole (provided that reasonable fees, disbursements and other charges of legal counsel for the Collateral Agent shall also be paid by the Initial Borrower), (y) in the case of any actual or perceived conflict of interest, one outside legal counsel for each group of affected Persons similarly situated, taken as a whole, in each appropriate jurisdiction and (z) if necessary, one local or foreign legal counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions).

(b) The Initial Borrower shall indemnify each Agent, each institution listed as an arranger or bookrunner on the cover page hereof, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from and against, any and all losses, claims, damages, liabilities, costs and related expenses (including the reasonable out-of-pocket fees, charges and disbursements of (i) one primary outside legal counsel in each of the United States and Canada to the Indemnitees, taken as a whole, (ii) in the case of any actual or perceived conflict of interest, one additional outside legal counsel for each group of affected Indemnitees similarly situated, taken as a whole, in each appropriate jurisdiction and (iii) if necessary, one local or foreign legal counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions)), which may at any time be imposed on, incurred by or asserted or awarded against any such Indemnitee arising out of, relating to, in connection with, or as a result of (w) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the Commitment Letter, the Fee Letter, the Purchase Agreement, the

 

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performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (x) 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), (y) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by Holdings or any of its Subsidiaries (including any predecessor entities), or any Environmental Liability relating to Holdings or any of its Subsidiaries (including any predecessor entities), or (z) 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 regardless of whether any Indemnitee is a party thereto and whether or not such claim, litigation, investigation or proceeding is brought by Holdings, the Borrowers or any of their respective Affiliates, their respective creditors or any other Person; provided, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (1) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or its Related Parties or a material breach by any Indemnitee of its obligations under this Agreement or any other Loan Document, (2) arise out of any claim, litigation, investigation or proceeding that does not involve an act or omission by Holdings or any of its Subsidiaries and that is brought by an Indemnitee against any other Indemnitee (provided, that in the event of such a claim, litigation, investigation or proceeding involving a claim or proceeding brought against any Agent or any Arranger (in each case, in its capacity as such) by other Indemnitees, any Agent or any Arranger, as the case may be (in its capacity as such), shall be entitled (subject to the other limitations and exceptions set forth above) to the benefit of the indemnities set forth above), (3) arise from any settlement entered into by any Indemnitee or any of its Related Parties in connection with the foregoing without the Initial Borrower’s prior written consent (such consent not to be unreasonably withheld or delayed), or (4) are in respect of indemnification payments made pursuant to Section 8.7, to the extent the Initial Borrower would not have been or was not required to make such indemnification payments directly pursuant to the provisions of this Section 9.3(b); provided, further, that each Indemnitee agrees (by accepting the benefits hereof) to refund and return any and all amounts paid by Holdings or any of its Subsidiaries or Affiliates to such Indemnitee to the extent such Indemnitee is not entitled to payment of such amounts in accordance with any of the foregoing items described in clauses (1), (2), (3) or (4) occurs. This Section 9.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc., arising from any non-Tax claim.

(c) To the extent permitted by applicable law, none of Holdings, the Borrowers or any Indemnitee shall assert, and each of Holdings, the Borrowers and each Indemnitee hereby waives, any claim against Holdings, the Borrowers or any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings) (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any agreement or instrument contemplated hereby, the Commitment Letter, the Fee Letter, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and, to the extent permitted by applicable law, Holdings and the Borrowers and each Indemnitee hereby waive, release and agree not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor; provided, that nothing contained in this paragraph shall limit the obligations of the Borrowers under Section 9.3(b) in respect of any such damages claimed against the Indemnitees by Persons other than Indemnitees.

(d) All amounts due under this Section 9.3 shall be payable not later than 30 days after written demand therefor.

 

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9.4 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) except as otherwise expressly provided in Section 6.4, no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a 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 9.4. 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) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, each Issuing Bank and the Lenders) 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) of this Section 9.4, 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 (each such consent not to be unreasonably withheld, delayed or conditioned) of:

(A) the Initial Borrower; provided, that no consent of the Initial Borrower shall be required (i) for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or, if a Specified Default has occurred and is continuing, any other Eligible Assignee or (ii) for any assignment during the primary syndication of the Revolving Credit Loans to Persons identified to, and approved by, the Initial Borrower prior to the Syndication Date (as defined in the Fee Letter); provided, further, that (x) the Initial Borrower shall be deemed to have consented to any such assignment unless the Initial Borrower shall have objected thereto by written notice to the Administrative Agent not later than the tenth Business Day following the date a written request for such consent is made and (y) the withholding of consent by the Initial Borrower to any assignment to any Disqualified Lender shall be deemed reasonable (for the avoidance of doubt, it being understood and agreed that the Administrative Agent shall not have any responsibility or obligation to determine or notify the Initial Borrower with respect to whether any Lender or potential Lender is a Disqualified Lender, or have a duty to ascertain, inquire into, monitor or enforce compliance with the provisions relating to Disqualified Lenders and the Administrative Agent shall have no liability with respect to any assignment made to a Disqualified Lender);

(B) the Administrative Agent; and

(C) each Issuing Bank.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class or assignments to a Lender or an Affiliate of a Lender, 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 $5.0 million unless (x) such assignee shall be an existing Lender or (y) each of the Initial Borrower and the Administrative Agent otherwise consent;

 

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provided, that no such consent of the Initial Borrower shall be required if a Specified Default has occurred and is continuing;

(B) each partial assignment with respect to a Class shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to such Class; provided, that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with (unless waived by the Administrative Agent in its sole discretion) a processing and recordation fee of $3,500 (treating, for purposes of such fee, multiple, simultaneous assignments by or to two or more Approved Funds as a single assignment); 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 material non-public information about Holdings, the Borrowers, the Loan Parties and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 9.4, 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 of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits, and subject to the obligations, of Sections 2.14, 2.15, 2.16 and 9.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.4 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section 9.4.

(iv) The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and, as applicable, stated interest) 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 absent manifest error, and the Borrowers, the Administrative Agent, each Issuing Bank 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 Borrowers, any Issuing Bank and, if an Event of Default has occurred and is continuing, any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

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(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 such assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section 9.4 and any written consent to such assignment required by paragraph (b) of this Section 9.4, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided, that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.4(d) or (e), 2.5(b), 2.17(d) or 8.7, the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of any Borrower, the Administrative Agent, or any Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment 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) the Borrowers, the Administrative Agent, each Issuing Bank 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; 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 clauses (1) through (3) of the first proviso to Section 9.2(b) and clause (3) of the third proviso to Section 9.2(b) that adversely affects the Participant. The Borrowers agree that, subject to paragraph (c)(ii) and (c)(iii) of this Section 9.4, each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (and subject to the requirements and limitations of such Sections) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 9.4. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.8 as though it were a Lender; provided, that such Participant agrees to be subject to Section 2.17(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as non-fiduciary agent of the Borrowers, 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 or any other Loan Document (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement, including payments of interest and principal, notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as administrative agent) shall have no responsibility for maintaining or otherwise administering a Participant Register.

 

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(ii) A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15 or 2.16, with respect to any participation sold to such Participant, 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 participation) with respect to the participation sold to such Participant. A Participant shall not be entitled to the benefits of Section 2.16 unless such Participant agrees, for the benefit of the Borrower, to comply (and actually complies) with Section 2.16(e) as though it were a Lender (it being understood that the documentation required under Section 2.16(e) shall be delivered to the participating Lender).

(iii) A Participant agrees to be subject to the provisions of Section 2.18 as if it were an assignee under paragraph (b) of this Section 9.4.

(iv) Each Lender that sells a participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.18(b) with respect to any Participant.

(v) No participation may be sold to the Sponsor, Holdings, any Borrower, any Affiliate of any of the foregoing or any of their respective Subsidiaries.

(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 9.4 shall not apply to any such pledge or assignment of a security interest; provided, that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(e) With respect to any assignment or participation by a Lender, (i) to a Disqualified Lender or (ii) to the extent the Initial Borrower’s consent is required under the terms of Section 9.4(b)(A) and such consent is not granted (or deemed to have been granted), to any other Person, in each case, the Initial Borrower shall be entitled to (A) seek specific performance to unwind any such assignment or participation and/or (B) exercise any other remedy set forth herein or in any other Loan Document available to the Initial Borrower in addition to any other remedy available to the Initial Borrower at law or at equity, except to the extent that (x) the assignee or participant to which such Lender assigned or participated the Loans or Commitments that were the subject of such impermissible assignment or participation (the “Ineligible Assignee”) no longer holds such Loans or Commitments or partitions therein and such Loans or Commitments were subsequently assigned or participated to an Eligible Assignee (it being expressly understood that no Person shall be an Eligible Assignee solely by virtue of its relationship to the Ineligible Assignee ) in accordance with the terms of the Credit Agreement or (y) the Initial Borrower consents in writing to such assignment or participation, provided that upon inquiry by any Lender to the Administrative Agent as to whether a specified potential assignee or prospective participant is on the list of Disqualified Lenders, the Administrative Agent shall be permitted to disclose to such Lender whether such specific potential assignee or prospective participant is in the list of Disqualified Lenders.

9.5 Survival. All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement 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

 

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that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time 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. The provisions of Sections 2.14, 2.15, 2.16 and 9.3 and Section 8 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.

9.6 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, the other Loan Documents and any separate letter agreements with respect to fees payable to the Agents 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. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, 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 transmission (e.g., “PDF” or “TIFF”) shall be effective as delivery of a manually executed counterpart of this Agreement.

9.7 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.8 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time with the prior written consent of the Administrative Agent (which consent shall not be required in connection with customary set-offs in connection with Cash Management Obligations and Specified Hedge Agreements), to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) (excluding any Exempt Account) at any time held and other obligations at any time owing by such Lender to or for the credit or the account of the applicable Borrower against any of and all the obligations of the applicable Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section 9.8 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender shall notify the Administrative Agent, Holdings and the Initial Borrower promptly after any such setoff. Notwithstanding anything to the contrary in the foregoing, no Lender shall exercise any right of set off in respect of any Controlled Account other than any Agent acting in its capacity as such.

9.9 Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement and the transactions contemplated hereby shall be construed in accordance with and governed by the law of the State of New York.

 

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(b) Each of the parties hereto 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 shall 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. Notwithstanding the foregoing, any party hereto may bring an action or proceeding in other jurisdictions in respect of its rights under any Security Document governed by a law other than the laws of the State of New York or, with respect to the Collateral, in a jurisdiction where such Collateral is located.

(c) The Borrowers hereby irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so, any objection which they 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 9.9. 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) Subject to clause (e) below, each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. 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.

(e) Without limiting the foregoing, each of the Foreign Loan Parties hereby irrevocably designates, appoints and empowers as of the Closing Date, CT Corporation System (the “Process Agent”), with an office on the Closing Date at 111 Eighth Avenue, 13th Floor, New York, New York 10011, United States, as its authorized designee, appointee and agent to receive, accept and acknowledge on its behalf and for its property, service of copies of the summons and complaint and any other process which may be served in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party or for recognition and enforcement of any judgment in respect thereof; such service may be made by mailing or delivering a copy of such process to such Foreign Loan Party, in care of the Process Agent at the Process Agent’s above address, and each of the Foreign Loan Parties hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. Each of the Foreign Loan Parties further agree to take any and all such action as may be necessary to maintain the designation and appointment of the Process Agent in full force in effect for a period of three years following the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder (other than contingent amounts not then due and payable); provided, that if the Process Agent shall cease to act as such, each such Foreign Loan Party agrees to promptly designate a new authorized designee, appointee and agent in New York City on the terms and for the purposes reasonably satisfactory to the Administrative Agent hereunder.

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 OTHER PARTY HAS REPRESENTED, EXPRESSLY OR

 

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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.

9.11 Headings. 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.

9.12 Confidentiality. (a) Each of the Agents, each Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ employees, legal counsel, independent auditors, professionals and other experts or agents (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), (ii) to the extent requested or demanded by any regulatory authority (including any self-regulating authority) claiming jurisdiction over it or its Affiliates (provided, that such Agent, such Issuing Bank or such Lender, as applicable, shall notify Holdings and the Initial Borrower as soon as practicable in the event of any such disclosure by such Person (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising routine examination or regulatory authority) to the extent practicable and not prohibited by applicable law, rule or regulation), (iii) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process based on the advice of counsel (provided, that such Agent, such Issuing Bank or such Lender, as applicable, shall notify Holdings and the Initial Borrower promptly thereof prior to any such disclosure by such Person (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising routine examination or regulatory authority) to the extent practicable and not prohibited by applicable law, rule or regulation), (iv) to any other party to this Agreement, (v) as reasonably determined to be necessary, in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) to bona fide or potential assignee, transferee or participant in connection with the contemplated assignment, transfer or participation of any Loans or any participations therein or by any direct or indirect contractual counterparties (or the professional advisors thereto) to any swap or derivative transaction relating to the Borrowers and their obligations (provided, that such assignees, transferees, participants, counterparties and advisors are advised of and agree to be bound by either the provisions of this Section 9.12 or other provisions at least as restrictive as this Section 9.12), (vii) to the extent that such information is independently developed by it, (viii) with the prior written consent of the Initial Borrower, (ix) to the extent such Information (A) becomes available other than as a result of a breach of this Section 9.12 to the any Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrowers or any of their Affiliates or (B) to the extent that such information becomes publicly available other than by reason of improper disclosure by any Agent, any Issuing Bank or any Lender or any of their Affiliates or any related parties thereto in violation of any confidentiality obligations owing to Sponsor, the Permitted Investors, the Targets or any of their respective affiliates, (x) on a confidential basis to (A) any rating agency in connection with rating Holdings, the Borrowers or their Subsidiaries or the Revolving Credit Facility or (1) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Revolving Credit Facility or (2) market data collectors, similar services, providers to the lending industry and service providers to the Agents in connection with the administration and management of this Agreement and the Loan Documents, (xi) to the extent necessary or customary for inclusion in league table measurement, and (xii) for purposes of establishing a “due diligence” defense. For the purposes of this Section 9.12, “Information” means all information received from Holdings, the Borrowers or any of their Affiliates

 

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relating to Holdings or the Borrowers or any of their Subsidiaries or businesses, other than any such information that is available other than as a result of a breach of this Section 9.12 to any Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by a Borrower; provided, that, in the case of information received from a Borrower after the date hereof, such information is clearly identified on or before the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 9.12 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 which shall in no event be less than commercially reasonable care.

(b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MNPI, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL, STATE, PROVINCIAL AND TERRITORIAL SECURITIES LAWS.

(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY A BORROWER OR ANY AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MNPI. ACCORDINGLY, EACH LENDER REPRESENTS AND WARRANTS TO THE BORROWERS AND THE AGENTS THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

9.13 PATRIOT Act. Each Lender that is subject to the requirements of the PATRIOT Act hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it may be required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the PATRIOT Act.

9.14 Release of Liens and Guarantees; Secured Parties. (a) In the event that any Loan Party conveys, sells, leases, assigns, transfers or otherwise Disposes of all or any portion of any of the Capital Stock or assets (including any Mortgaged Property) of any Loan Party to a Person that is not (and is not required hereunder to become) a Loan Party in a transaction permitted under this Agreement, the Liens created by the Loan Documents in respect of such Capital Stock or assets shall automatically terminate and be released, without the requirement for any further action by any Person and the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents (including Mortgage release documents) as may be reasonably requested by Holdings or the Initial Borrower and at the Initial Borrower’s expense to further document and evidence such termination and release of Liens created by any Loan Document in respect of such Capital Stock or assets. In the event that any Capital Stock or other asset (including any Mortgaged Property) constituting Collateral has become, or is becoming, an Excluded Asset, then, at the request of Holdings or any Borrower, the Administrative Agent agrees to promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute such documents (including mortgage release documents) as may be reasonably requested by Holdings or any Borrower, and at the Borrowers’ expense, to terminate, discharge and release (or to further document and evidence the termination, discharge and release of) the Liens created by any Loan Document in respect of such assets. In the case of a transaction permitted under this Agreement the result of which is that a Loan Party would cease to be a Restricted

 

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Subsidiary or would become an Excluded Subsidiary (or in case any Restricted Subsidiary otherwise becomes an Excluded Subsidiary or Holdings elects that any Discretionary Guarantor that would otherwise constitute an Excluded Subsidiary cease to be a Discretionary Guarantor), the Guarantee Obligations created by the Loan Documents in respect of such Loan Party (and all security interests granted by such Guarantor under the Loan Documents) shall automatically terminate and be released, without the requirement for any further action by any Person and the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by Holdings or the Initial Borrower and at the Initial Borrower’s expense to further document and evidence such termination and release of such security interests and such Loan Party’s Guarantee Obligations in respect of the Obligations (including its Guarantee Obligations under the US Guarantee and Collateral Agreement and the Canadian Guarantee and Collateral Agreements). Any representation, warranty or covenant contained in any Loan Document relating to any such Capital Stock, asset or subsidiary of any Loan Party shall no longer be deemed to be made with respect thereto once such Capital Stock or asset or Subsidiary is so conveyed, sold, leased, assigned, transferred or disposed of.

(b) Upon the payment in full of the Obligations and the termination or expiration of the Commitments, all Liens created by the Loan Documents shall automatically terminate and be released, without the requirement for any further action by any Person and the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by Holdings or the Initial Borrower and at the Initial Borrower’s expense to further document and evidence such termination and release of Liens created by the Loan Documents (including by way of assignment), and the Guarantee Obligations created by the Loan Documents in respect of the Guarantors shall automatically terminate and be released, without the requirement for any further action by any Person and the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by Holdings or the Initial Borrower and at the Initial Borrower’s expense to further document and evidence such termination and release of the Guarantors’ Guarantee Obligations in respect of the Obligations (including the Guarantee Obligations under the US Guarantee and Collateral Agreement and the Canadian Guarantee and Collateral Agreements).

(c) Except with respect to the exercise of setoff rights of any Lender in accordance with Section 9.8 or with respect to a Lender’s right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any guarantee of the 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 any Agent on any of the Collateral pursuant to a public or private sale or other disposition, any 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 the 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 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. In furtherance of the foregoing, no Hedge Agreement the obligations under which constitute Specified Hedge Agreement obligations and no other agreements the obligations under which constitute Cash Management Obligations, in each case 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 this Agreement or any other Loan Document. By accepting the benefits of the

 

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Collateral, each Secured Party that is a party to any such Hedge Agreement or such agreement in respect of Cash Management Services shall be deemed to have appointed the Administrative Agent to serve as administrative agent and the Collateral Agent to serve as collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

9.15 No Fiduciary Duty. Each Agent, each Issuing Bank each Lender and their respective Affiliates (collectively, solely for purposes of this paragraph, the “Lender Parties”) may have economic interests that conflict with those of the Loan Parties, their stockholders and/or their affiliates. Each Loan Party agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between