Exhibit 10.1

 

BARCLAYS

745 Seventh Avenue

New York, New York 10019 

 

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179 

PERSONAL AND CONFIDENTIAL

 

July 22, 2016

 

G-III Apparel Group, LTD.
512 Seventh Avenue
New York, New York 10018
Attention: Wayne Miller, Chief Operating Officer

 

Project Brand II
$450,000,000 Senior Secured Term Loan Facility
$525,000,000 ABL Facility
Commitment Letter

 

Ladies and Gentlemen:

 

G-III Apparel Group, LTD (the “Company” or “you”) has advised Barclays Bank PLC
(“Barclays”, together with any of its affiliates as may be appropriate to
provide the services, but for the avoidance of doubt, not the commitments
contemplated herein) and JPMorgan Chase Bank, N.A. (“JPMorgan”, together with
any of its affiliates as may be appropriate to provide the services, but for the
avoidance of doubt, not the commitments contemplated herein); JPMorgan, together
with Barclays and any Additional Commitment Parties (as defined below) appointed
pursuant to the fifth paragraph of Section 1 hereof, (the “Commitment Parties”,
“we” or “us”) that it intends to acquire (the “Acquisition”) directly or
indirectly, through one or more subsidiaries, the capital stock of an entity
codenamed “Brand II” (the “Target”) and to consummate the other transactions
described in the Transaction Description attached hereto as Exhibit A.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Transaction Description and in the Summary of Principal Terms and
Conditions attached hereto as Exhibit B (the “Term Facility Term Sheet”) and in
the Summary of Principal Terms and Conditions attached hereto as Exhibit C (the
“ABL Facility Term Sheet” and, together with the Term Facility Term Sheet, the
“Term Sheets”; this commitment letter, the Transaction Description, the Term
Sheets and the Summary of Conditions Precedent attached hereto as Exhibit D,
collectively, the “Commitment Letter”).

 

You have also advised us that, in connection therewith, it is intended that the
financing for the Transactions will be financed from the following sources:

 

·$450.0 million of borrowings under a senior secured term loan facility (the
“Term Facility”) having the terms set forth in the Term Facility Term Sheet;

 

·Borrowings of up to the amount specified in the ABL Facility Term Sheet under a
$525.0 million senior secured asset-based revolving credit facility (the “ABL
Facility”; the ABL Facility and the Term Facility are collectively referred to
herein as the “Facilities”);

 

·$75.0 million of borrowings under a seller note having the terms substantially
as set forth in Exhibit B to the Acquisition Agreement (the “Seller Note”);

 

 

 

 

·Common equity issued by the Company to the shareholders of the Target in
accordance with the Acquisition Agreement (the “Equity Issuance”).

 

1.Commitments and Agency Roles

 

You hereby appoint (i) Barclays to act, and Barclays hereby agrees to act, as
sole and exclusive administrative agent and collateral agent (in such
capacities, the “Term Administrative Agent”) for the Term Facility and (ii)
JPMorgan to act, and JPMorgan hereby agrees to act, as sole and exclusive
administrative agent and collateral agent (in such capacities, the “ABL
Administrative Agent” and, together with the Term Administrative Agent, the
“Administrative Agents”) for the ABL Facility. You hereby appoint (i) each of
Barclays and JPMorgan to act, and each of Barclays and JPMorgan hereby agrees to
act, as a lead arranger and bookrunner (in such capacities, together with any
Additional Commitment Party (as defined below) appointed as an arranger and/or
bookrunner pursuant to the provisions of the fifth paragraph of this Section 1,
each a “Term Facility Arranger” and, collectively, the “Term Facility
Arrangers”) for the Term Facility and (ii) each of JPMorgan and Barclays to act,
and each of JPMorgan and Barclays hereby agrees to act, as a lead arranger and
bookrunner (in such capacities, together with any Additional Commitment Party
(as defined below) appointed as an arranger and/or bookrunner pursuant to the
provisions of the fifth paragraph of this Section 1, each an “ABL Facility
Arranger” and, collectively, the “ABL Facility Arrangers”; the ABL Facility
Arrangers and the Term Facility Arrangers are collectively referred to herein as
the “Arrangers”) for the ABL Facility. It is agreed that (i) Barclays shall have
“left” placement in any and all marketing materials or other documentation used
in connection with the Term Facility and shall hold the leading role and
responsibilities conventionally associated with such “left” placement and
JPMorgan shall have “right side” placement (immediately to the right of
Barclays) in any and all marketing materials or other documentation used in
connection with the Term Facility and shall hold the roles and responsibilities
conventionally associated with such “right” placement and (ii) JPMorgan shall
have “left” placement in any and all marketing materials or other documentation
used in connection with the ABL Facility and shall hold the leading role and
responsibilities conventionally associated with such “left” placement and
Barclays shall have “right side” placement (immediately to the right of
JPMorgan) in any and all marketing materials or other documentation used in
connection with the ABL Facility and shall hold the roles and responsibilities
conventionally associated with such “right” placement. All other financial
institutions and any other Arrangers will be listed in customary fashion (as
mutually agreed to by you and the Arrangers as of the Acceptance Date (as
defined below)) in the marketing materials or other documentation used in
connection with the Facilities.

 

In connection with the Transactions contemplated hereby, (a)(i) Barclays is
pleased to advise you of its several, but not joint, commitment to provide 60%
of the aggregate principal amount of the Term Facility (and hereby agrees to
provide the same percentage of any increased amounts to fund any original issue
discount or upfront fees required to be funded in connection with the exercise
of “Market Flex Provisions” in the Fee Letter (as defined below)) and (ii)
JPMorgan is pleased to advise you of its several, but not joint, commitment to
provide 40% of the aggregate principal amount of the Term Facility (and hereby
agrees to provide the same percentage of any increased amounts to fund any
original issue discount or upfront fees required to be funded in connection with
the exercise of “Market Flex Provisions” in the Fee Letter) and (b)(i) JPMorgan
is pleased to advise you of its several, but not joint, commitment to provide
60% of the aggregate principal amount of the ABL Facility and (ii) Barclays is
pleased to advise you of its several, but not joint, commitment to provide 40%
of the aggregate principal amount of the ABL Facility subject, in each case
(described in clauses (a) and (b) above) to the satisfaction or waiver of the
applicable Closing Conditions (as defined below).

 

In such capacity, Barclays and JPMorgan, together with any Additional Commitment
Party added as an initial lender pursuant to the provisions of the fifth
paragraph of this Section 1, are referred to herein as

 

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the “Initial Lenders” and, each individually as an “Initial Lender”, with the
entities named in clause (a) above, together with any Additional Commitment
Party added as an initial lender under the Term Facility pursuant to the
provisions of the fifth paragraph of this Section 1, being herein called the
“Initial Term Lenders” and the entities named in clause (b) above, together with
any Additional Commitment Party added as an initial lender under the ABL
Facility pursuant to the provisions of the fifth paragraph of this Section 1,
being herein called the “Initial ABL Lenders”.

 

Our fees for services related to the Facilities are set forth in a separate fee
letter (the “Fee Letter”) between the Company and us entered into on the date
hereof. In consideration of our execution and delivery of this Commitment
Letter, you agree to pay the fees and expenses set forth in the Term Sheets and
in the Fee Letter as and when payable in accordance with the terms hereof and
thereof. Subject to the provisions set forth in the next succeeding paragraph,
you agree that no other titles will be awarded and no compensation (other than
as expressly contemplated by this Commitment Letter and the Fee Letter) will be
paid to the Lenders in connection with the Facilities unless you and we shall so
agree.

 

Notwithstanding the foregoing, you may, on or prior to the date that is ten (10)
business days following the date of your acceptance of this Commitment Letter
(the “Acceptance Date”), (A) appoint one (1) other financial institution as an
additional bookrunner and/or arranger in respect of the Term Facility and
appoint up to three (3) other financial institutions as documentation agents,
additional managers and/or co-managers in respect of the Term Facility and (B)
appoint one (1) other financial institutions as an additional bookrunner and/or
arranger in respect of the ABL Facility and appoint up to three (3) other
financial institutions as documentation agents, additional managers and/or
co-managers in respect of the ABL Facility (in either case, each an “Additional
Commitment Party”). The Additional Commitment Parties (or their affiliates) with
respect to the Term Facility may have (in the aggregate) commitments of up to
20% of the commitment amount with respect to the Term Facility and shall be
entitled to its ratable share of the economics payable to Barclays and JPMorgan
in respect of the Term Facility. The Additional Commitment Parties (or their
affiliates) with respect to the ABL Facility may have (in the aggregate)
commitments of up to 20% of the commitment amount with respect to the ABL
Facility and shall be entitled to their ratable share of the economics payable
to JPMorgan and Barclays in respect of the ABL Facility. It is understood that,
to the extent you appoint an Additional Commitment Party, the commitments of
Barclays and JPMorgan with respect to the applicable Facility will be reduced
ratably with respect to such Facility by the amount of the commitments of such
Additional Commitment Party (or its affiliates) upon the execution by it of
customary joinder documentation pursuant to which such Additional Commitment
Party (and/or its affiliate) shall assume a proportion of the commitments with
respect to the applicable Facility that equal the proportion of the economics
allocated to it and, thereafter, such Additional Commitment Party (or its
affiliates) shall constitute an Initial Lender, an Initial Term Lender, an
Initial ABL Lender, a Term Facility Arranger, an ABL Facility Arranger and a
Commitment Party hereunder.

 

2.Conditions Precedent

 

Our commitments hereunder to fund and make effective the Facilities on the
Closing Date (as defined below) and our agreements to perform the services
described herein are subject only to the conditions set forth in Exhibit D
hereto (the “Closing Conditions”); and upon, in each case, satisfaction (or
waiver by the Commitment Parties) of such Closing Conditions, the initial
funding of the Facilities shall occur; it being understood that there are no
conditions (implied or otherwise) to the commitments hereunder, other than those
that are expressly stated as Closing Conditions above to be conditions to the
initial funding under and effectiveness of, the Facilities on the Closing Date.

 

Notwithstanding anything to the contrary in this Commitment Letter (including
each of the exhibits attached hereto), the Fee Letter, the Loan Documents (as
defined in Exhibit C) or any other agreement or

 

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undertaking between you and us concerning the financing of the Transactions to
the contrary, (i) the only representations and warranties the accuracy of which
will be a condition to the availability and effectiveness of the Facilities on
the Closing Date will be (a) the representations and warranties made by, or with
respect to the Target, in the Acquisition Agreement that are material to the
interests of the Lenders, but only to the extent that the Company or its
subsidiaries have the right (taking into account any applicable cure periods) to
terminate its or their obligations under the Acquisition Agreement or decline to
consummate the transactions thereunder as a result of a breach of such
representations in the Acquisition Agreement (to such extent, the “Acquisition
Agreement Representations”) and (b) the Specified Representations (as defined
below) and (ii) the terms of the Loan Documents shall be in a form such that
they do not impair the availability and effectiveness of the Facilities on the
Closing Date if the Closing Conditions are satisfied and/or waived by the
Commitment Parties (it being understood that, to the extent any security
interest in the Collateral (as defined in Exhibit B) (other than any collateral
the security interest in which may be perfected by the (x) filing of a UCC
financing statement or (y) possession of stock certificates (or equivalent
certificated equity interests) of the U.S. restricted subsidiaries of the
Company (including the Target) as and to the extent required under the heading
“Collateral” in Exhibit B; provided that, to the extent that you have used
commercially reasonable efforts to procure the delivery thereof prior to the
Closing Date, certificated equity interests of the subsidiaries of the Target
will only be required to be delivered on the Closing Date pursuant to the terms
set forth above if such certificates are actually received from the Seller or
the Target), is not or cannot be provided and/or perfected on the Closing Date
(1) without undue burden or expense and (2) after your use of commercially
reasonable efforts to do so, then the provision and/or perfection of such
security interest(s) or deliverable shall not constitute a condition precedent
to the availability of the Facilities on the Closing Date but shall be required
to be delivered within no later than 90 days after the Closing Date (or such
later date as may be reasonably agreed by the Term Administrative Agent)
pursuant to arrangements to be mutually agreed by the Company and the Term
Administrative Agent). For purposes hereof, “Specified Representations” means
the representations of the Borrowers and the Guarantors (each as defined in
Exhibit A) in the Loan Documents relating to qualification, incorporation or
organization of the Company and its subsidiaries; power and authority to enter
into and perform under the Loan Documents; due authorization and execution of
the Loan Documents; the incurrence of the loans to be made under the Facilities,
the provision of the guarantees under the Loan Documents and the granting of the
security interests in the Collateral to secure the Facilities and the other
provisions of the Loan Documents, do not conflict with the organizational
documents of the Borrower or any Guarantor; delivery and enforceability of the
Loan Documents; solvency as of the Closing Date (after giving effect to the
Transactions) of the Borrower and its subsidiaries on a consolidated basis
(solvency to be defined in a manner consistent with the manner in which solvency
is determined in the solvency certificate to be delivered pursuant to paragraph
5 of Exhibit D); not being required to be registered as an “investment company”
as defined in, or subject to regulation under the Investment Company Act of
1940; not using proceeds of the loans under the Facilities to purchase margin
stock or otherwise in violation of the FCPA, OFAC; the Patriot Act; and the
creation, validity and perfection of the security interest granted in the
intended collateral to be perfected (except as provided above). This paragraph,
and the provisions herein, shall be referred to as the “Limited Conditionality
Provisions”.

 

3.Syndication

 

The Arrangers intend and reserve the right, on and after the Acceptance Date, to
syndicate the Facilities to a group of banks, financial institutions and other
institutional lenders (collectively, with the Initial Lenders, the “Lenders”)
identified by us in consultation with you and subject to your consent (such
consent not to be unreasonably withheld, delayed or conditioned).
Notwithstanding the foregoing, the Arrangers will not syndicate to (i) those
lenders separately identified in writing by you to us prior to the date hereof
or (ii) to your competitors (which shall not include bona fide debt funds),
separately identified in writing by you to us prior to the date hereof or to the
Administrative Agents from time to time after the

 

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Closing Date (such Lenders, “Disqualified Lenders”); provided that any
supplement to the “Disqualified Lenders” list shall become effective three (3)
business days after delivery to the Arrangers, but which supplement shall not
apply retroactively to disqualify any entities that have previously acquired a
commitment or a participation in the Facilities in accordance with the terms of
this Commitment Letter or the Loan Documents (as defined in Exhibit C to this
Commitment Letter); provided, further that, no supplements shall be made to the
“Disqualified Lender” list from and including the date of the launch of primary
syndication of the Facilities through and including the Syndication Date (as
defined below).

 

Notwithstanding the Arrangers’ right to syndicate the Facilities and receive
commitments with respect thereto (but other than in connection with any
assignment to the Additional Commitment Party pursuant to Section 1 above or
unless otherwise agreed in writing by you), (i) no Initial Lender shall be
relieved, released or novated from its obligations hereunder (including its
obligation to fund the Facilities on the date of consummation of the Acquisition
and effectiveness of, and initial funding under, the Facilities (the date of
such consummation, effectiveness and funding, the “Closing Date”)) in connection
with any syndication, assignment or participation of the Facilities, including
its commitments in respect thereof, until after the initial funding of the
Facilities on the Closing Date has occurred, (ii) no assignment or novation by
any Initial Lender shall become effective with respect to all or any portion of
any Initial Lender’s commitments in respect of the Facilities until after the
initial funding of the Facilities on the Closing Date has occurred and (iii)
unless you otherwise agree in writing, each Commitment Party shall retain
exclusive control over all rights and obligations with respect to its
commitments in respect of the Facilities, including all rights with respect to
consents, modifications, supplements, waivers and amendments, until the Closing
Date has occurred.

 

The Arrangers will lead the syndication, including determining the timing of all
offers to potential Lenders, any title of agent or similar designations or roles
awarded to any Lender and the acceptance of commitments, the amounts offered and
the compensation provided to each Lender from the amounts to be paid to the
Arrangers pursuant to the terms of this Commitment Letter and the Fee Letter, in
each case subject to your consent rights on the identity of Lenders specified
above and rights of appointment of any Additional Commitment Party. The
Arrangers will determine the final commitment allocations and will notify the
Company of such determinations. The Company agrees to use commercially
reasonable efforts to ensure that the Arrangers’ syndication efforts benefit
from the existing lending and investment banking relationships of the Company
and your subsidiaries. To facilitate an orderly and successful syndication of
the Facilities, you agree that, prior to the Syndication Date, the Company will
not, and will use commercially reasonable efforts to ensure that the Target will
not, syndicate or issue, attempt to syndicate or issue, announce or authorize
the announcement of the syndication or issuance of, any debt facility or any
debt security of the Company or the Target or any of their respective
subsidiaries (other than the Facilities, any indebtedness of the Target
permitted to be incurred by the Target (including its subsidiaries) pursuant to
the Acquisition Agreement, other indebtedness incurred in the ordinary course of
business of the Company and its subsidiaries or the Target for capital
expenditures and working capital purposes), without the prior written consent of
the Arrangers, if such issuance, offering, placement or arrangement would
reasonably be expected to materially impair the primary syndication of the
Facilities.

 

Without limiting your obligations to assist with the syndication efforts as set
forth herein, it is understood that the Initial Lenders’ commitments hereunder
are not conditioned upon the syndication of, or receipt of commitments in
respect of, the Facilities and in no event shall the commencement or successful
completion of syndication of the Facilities constitute a condition to the
availability of the Credit Facilities on the Closing Date. The Company agrees
to, and agrees to use commercially reasonable efforts to have the Target,
cooperate with the Arrangers, and provide customary information reasonably
required by the Arrangers, in connection with all syndication efforts of the
Arrangers until the earlier to occur of (a) the Successful Syndications (as
defined in the Fee Letter) and (b) 60 days following the Closing Date (such
earlier date, the “Syndication Date”) including: (i) your assistance in
preparing, as soon as practicable

 

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after the date of this Commitment Letter, a customary information memorandum and
other customary marketing materials (collectively, “Facilities Marketing
Materials”) in each case to be used in connection with the syndication of the
Facilities and you shall use your commercially reasonable efforts to provide the
Term Facility Arrangers with a period, on or prior to the Closing Date, of 15
consecutive Business Days, beginning no earlier than September 6, 2016, from and
after the date of receipt of the Facilities Marketing Materials containing
customary information regarding you and your subsidiaries, the Target and its
subsidiaries, the Transactions and the Facilities (other than information
customarily included therein that is customarily provided by the Commitment
Parties or their counsel) in a form customarily delivered in connection with
senior secured bank financings in the United States, to syndicate the Credit
Facilities; (ii) using commercially reasonable efforts to obtain, prior to the
launch of syndication, a public corporate family rating from Moody’s Investors
Service, Inc. (“Moody’s”) and a public corporate credit rating from S&P Global
Ratings (“S&P”), in each case with respect to the Company, and ratings for the
Term Facility from each of S&P and Moody’s; (iii) arranging for direct contact
between appropriate senior management, representatives and advisors of the
Company with prospective Lenders, in all such cases at times mutually agreed
upon; (iv) hosting (including any preparations with respect thereto) with the
Arrangers at places and times reasonably requested by the Arrangers and mutually
agreed upon one or more meetings with prospective Lenders; (v) using
commercially reasonable efforts to cause the Seller to cooperate with Ernst &
Young LLP in the preparation of, and to cause Ernst & Young LLP to prepare and
deliver to you prior to the launch of syndication, quality of earnings reports
(collectively, the “QoE Reports”) in respect of the Target and its subsidiaries
prepared by Ernst & Young LLP with respect to the 2014 and 2015 fiscal years, as
well as the interim periods ending March 31, 2016, June 30, 2016 and, if
applicable, September 30, 2016 and (vi) using commercially reasonable efforts to
(x) ensure that the ABL Administrative Agent and its designees shall have
sufficient access to Company and its subsidiaries and the Target and its
subsidiaries to complete, as promptly as practicable after the Acceptance Date
and prior to the Closing Date or as soon as practicable thereafter (A) a field
examination of the accounts receivable, credit card receivables, inventory and
related working capital matters and related data processing and other systems,
in each case, to the reasonable satisfaction of the ABL Administrative Agent and
(B) an appraisal of inventory by an independent third-party appraisal firm
reasonably acceptable to the ABL Administrative Agent and (y) delivering a
Borrowing Base Certificate (as defined in Exhibit C) or certificate evidencing
the initial Borrowing Base (as defined in Exhibit C) and after giving effect to
the initial borrowing under the ABL Facility on the Closing Date and which
certificate may be in the form of, and contain information consistent with, the
most recent borrowing base certificate delivered by the Company under the
Existing ABL Facility (as defined in Exhibit A) (with relevant modifications
with respect to the assets of the Target and its subsidiaries to the extent that
any such assets of the Target and its subsidiaries are to be included in the
Borrowing Base on the Closing Date) (the “Initial Borrowing Base Certificate”).
It is understood that the only financial statements that shall be required to be
provided to the Commitment Parties in connection with the syndication of the
Facilities shall be those required to be delivered pursuant to paragraphs 2 and
3 of Exhibit D and it is further understood that the financial statements
referred to in clauses (ii) and (iv) of paragraph 2 of Exhibit D may not be
delivered until the Closing Date or immediately prior thereto. Notwithstanding
anything to the contrary contained in this Commitment Letter or the Fee Letter
or any other letter agreement or undertaking concerning the financing of the
Transactions to the contrary, your obligations to assist in syndication efforts
as provided herein (including the obtaining of the ratings referred to above and
the compliance with any of the provisions set forth in this paragraph), shall
not constitute a condition to the commitments hereunder or the funding of the
Facilities on the Closing Date.

 

Upon the reasonable request of the Arrangers, you will furnish, and to the
extent not in contravention of the Acquisition Agreement, use your commercially
reasonable efforts to cause the Target to furnish, for no fee, to the Arrangers
an electronic version of your and your subsidiaries’ and the Target’s and its
subsidiaries’ corporate logos for use in marketing materials for the purpose of
facilitating the syndication of the Facilities (the “License”); provided,
however, that the License shall be used solely for the purpose

 

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described above and may not be assigned or transferred. You hereby authorize the
Arrangers to download copies of the Company’s corporate logos from its website
and post copies thereof on the IntraLinks site, SyndTrak site or similar
workspace established by any Arranger to syndicate the Facilities and use the
logos in any Facilities Marketing Material or in any advertisements (to which
you consent, such consent not to be unreasonably withheld, delayed or
conditioned) that the Arrangers may place after the Closing Date in financial
and other newspapers and journals, or otherwise, at its own expense describing
its services to you. You will be solely responsible for the contents of the
Facilities Marketing Materials and all other information, documentation or other
materials delivered to us by you or your affiliates in connection therewith and
you acknowledge that we will be using and relying upon such information without
independent verification thereof.

 

You understand that certain prospective Lenders (such Lenders, “Public Lenders”)
may have personnel that do not wish to receive MNPI (as defined below). At any
Arranger’s request, you agree to assist in the preparation of an additional
version of the Facilities Marketing Materials that does not contain material
non-public information (as reasonably determined by you) concerning you, the
Target or your or its respective subsidiaries or your or its respective
affiliates or any of your or its respective securities for purposes of
applicable foreign (with respect to the Seller and its securities only), United
States federal and state securities laws (collectively, “MNPI”). You will
clearly designate as “PUBLIC” any information that does not contain MNPI (the
“Public Information Materials”) provided to the Commitment Parties by you or by
your representatives on your behalf which is suitable to make available to
Public Lenders. Before distribution of any Facilities Marketing Materials in
connection with the syndication of the Facilities (i) to prospective Lenders
that are not Public Lenders, you will provide us with a customary letter
authorizing the dissemination of such materials and (ii) to prospective Public
Lenders, you will provide us with a customary letter authorizing the
dissemination of Public Information Materials to Public Lenders and confirming
the absence of MNPI therein. You acknowledge and agree that the following
documents may be distributed to Public Lenders (unless you or your counsel
promptly notify us (including by email) otherwise and provided that you and your
counsel have been given a reasonable opportunity to review such documents and
comply with applicable securities law disclosure obligations): (a) drafts and
final versions of the Loan Documents; (b) administrative materials prepared by
the Arrangers for prospective Lenders (including without limitation a lender
meeting invitation, allocations and funding and closing memoranda); and (c) term
sheets and notification of changes in the terms and conditions of the
Facilities. You agree that unless specifically labeled “PUBLIC,” no information,
documentation or other data disseminated to prospective Lenders in connection
with the syndication of the Facilities, whether through an Internet site
(including without limitation an IntraLinks or SyndTrak workspace),
electronically, in presentations, at meetings or otherwise will be distributed
to Public Lenders. You acknowledge that any Commitment Party’s public-side
employees and representatives who are publishing debt analysts may participate
in any meetings held pursuant to clause (iv) of the second preceding paragraph;
provided that, such analysts shall not publish any information obtained from
such meetings (i) until the syndication of the Facilities has been completed
upon the making of allocations by the Arrangers and the Arrangers freeing the
Facilities to trade or (ii) in violation of any confidentiality agreement
between you and the relevant Commitment Party.

 

4.Information

 

You represent and warrant that (and with respect to information and projections
relating to the Target and its subsidiaries, to the best of your knowledge that)
(i) all written information (other than projections, forward-looking information
and information of a general economic or industry specific nature) that has been
or will be made available to each Arranger, each Commitment Party, the Lenders
or any of their respective affiliates by you or any of your representatives on
your behalf (including any information relating to the Target and its
subsidiaries) in connection with the Transactions, when taken as a whole, was
and will be, when furnished, complete and correct in all material respects and
did not and will not

 

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when furnished and when taken as a whole contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements were or are made (giving effect to all supplements and
updates provided thereto) and (ii) the projections and other forward-looking
information that have been or will be made available to each Arranger, each
Commitment Party, the Lenders or any of their respective affiliates by you or
any of your representatives on your behalf in connection with the Transactions
have been and will be prepared in good faith and that the information in such
projections with respect to you will be based upon accounting principles
consistent with the historical audited financial statements of the Company most
recently provided to the Commitment Parties as of the date hereof and upon
assumptions that are believed by the preparer thereof to be reasonable at the
time made and at the time such projections are made available to each Arranger,
each Commitment Party, the Lenders or any of their respective affiliates; it
being understood that such projections and forward-looking statements are as to
future events and are not to be viewed as facts, such projections and
forward-looking statements are subject to significant uncertainties and
contingencies and that actual results during the period or periods covered by
any such information may differ significantly from the projected results, and
that no assurance can be given that the projected results will be realized. You
agree that if at any time prior to the later of (a) the Closing Date and (b) the
Syndication Date you become aware that any of the representations in the
preceding sentence would be incorrect (to the best of your knowledge with
respect to information and projections relating to the Target and its
subsidiaries) in any material respect if the information and projections were
being furnished, and such representations were being made, at such time, then
you will (and, with respect to information and projections relating to the
Target and its subsidiaries, you will use commercially reasonable efforts to
cause the Target and its subsidiaries to) promptly supplement, or cause to be
supplemented, the information and projections so that (with respect to
information and projections relating to the Target and its subsidiaries, to the
best of your knowledge) such representations will be correct in all material
respects under those circumstances. You understand that in providing our
services pursuant to this Commitment Letter we may use and rely on the
information and projections without independent verification thereof.

 

5.Indemnification; Expense Reimbursement

 

To induce us to enter into this Commitment Letter and the Fee Letter and to
proceed with the documentation of the Facilities, you hereby agree (a) to
indemnify and hold harmless the Administrative Agents, the Commitment Parties,
the Arrangers and their respective affiliates and each partner, trustee,
director, officer, employee, advisor, representative, agent, attorney and
controlling person thereof (each of the above, an “Indemnified Person”) from and
against any and all claims, losses, damages, liabilities or expenses, joint or
several, of any kind or nature whatsoever that may be brought by the Company,
the Target, the Guarantors, any of their respective affiliates or any other
person or entity and which may be incurred by or asserted against or involve any
Indemnified Person as a result of or arising out of or in any way relating to
any actions, suits or proceedings (including any investigations or inquiries)
relating to or resulting from this Commitment Letter, the Fee Letter, the
Facilities, the Transactions or any related transaction contemplated hereby or
thereby or any use or intended use of the proceeds of the Facilities and you
agree, upon demand, to pay and reimburse each Indemnified Person, whether or not
the action, suit, proceeding or claim out of which any such expenses arise is
brought by the Company, the Target, any Guarantor, any of their respective
affiliates or any other person or entity and whether or not any Indemnified
Person is a party to such action, suit, proceeding or claim for any reasonable,
documented out-of-pocket legal (limited to the fees, charges and disbursements
of a single counsel for all Indemnified Persons selected by the Commitment
Parties and of such special and local counsel as the Commitment Parties may deem
appropriate in their good faith discretion, except that if any Indemnified
Person reasonably concludes that its interests conflict with those of another
Indemnified Person and notifies you of such conflict, you shall also be
responsible for the reasonable, documented fees, charges and disbursements of
one separate counsel for such conflicted Indemnified Persons) or other
reasonable,

 

 8 

 

 

documented out-of-pocket expenses incurred in connection with investigating,
defending or preparing to defend any such action, suit, proceeding (including
any inquiry or investigation) or claim; provided that you will not have to
indemnify an Indemnified Person against any claim, loss, damage, liability or
expense (i) to the extent such claim, loss, damage, liability or expense
resulted from (x) the gross negligence or willful misconduct of such Indemnified
Person or any of its affiliates, partners, trustees, directors, officers,
employees, advisors, representatives, agents, attorneys or controlling persons
(as determined by a final, nonappealable judgment of a court of competent
jurisdiction) or (y) a material breach by such Indemnified Person or any of such
Indemnified Person’s affiliates or any of its or their controlling persons of
its or their respective obligations under this Commitment Letter (as determined
by a final, non-appealable judgment of a court of competent jurisdiction),
including the Commitment Lenders’ obligations to fund the Facilities on the
Closing Date if so required in accordance with the provisions of this Commitment
Letter or (ii) arising out of any claim, actions, suits, inquiries, litigation,
investigation or proceeding that does not involve an act or omission of you or
any of your affiliates and that is brought by an Indemnified Person against any
other Indemnified Person (other than any claim, actions, suits, inquiries,
litigation, investigation or proceeding against any Administrative Agent,
Commitment Party, Arranger or other agent in its capacity or in fulfilling its
role as such); and (b) if the Closing Date occurs, to reimburse each Commitment
Party from time to time, upon presentation of a summary statement, for all
reasonable and documented out-of-pocket expenses (including but not limited to
expenses of each Commitment Party’s due diligence investigation, consultants’
fees, syndication expenses, travel expenses and reasonable fees, disbursements
and other charges of counsel to the Arrangers identified in the Term Sheets, of
a single firm of local counsel to the Lead Arrangers in each relevant material
jurisdiction and, solely in the case of an actual or perceived conflict of
interest, one additional counsel in each applicable material jurisdiction), in
each case incurred in connection with the Facilities and the preparation,
negotiation and enforcement of this Commitment Letter, the Fee Letter and the
Loan Documents; provided that, only one inventory appraisal and one field
examination shall be included with the scope of the expenses to be reimbursed
under this clause (b).

 

Notwithstanding any other provision of this Commitment Letter, no Indemnified
Person will be responsible or liable to you or any other person or entity for
damages directly or indirectly arising from the use by others of any information
or other materials obtained through internet, electronic, telecommunications or
other information transmission systems unless such use resulted from the gross
negligence or willful misconduct on the part of such person (to the extent
determined by a court of competent jurisdiction in a final and non-appealable
judgment).

 

The indemnity and reimbursement obligations of the Company under this Section 5
will be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company and the Indemnified Persons and
shall be superseded in each case by the applicable provisions to the extent
covered in the definitive financing documentation upon execution thereof and
thereafter shall have no further force and effect.

 

Neither you nor we nor any other Indemnified Person will be responsible or
liable to us or you or any other person or entity for any indirect, special,
punitive or consequential damages which may be alleged as a result of or arising
out of, or in any way related to, the Acquisition, this Commitment Letter, the
Fee Letter, the Facilities or the Transactions or any use or intended use of the
proceeds of the Facilities; provided that the indemnity and reimbursement
obligations under this Section 5 shall not be limited by the preceding sentence
to the extent that such indirect, special, punitive or consequential damages are
included in any claim by a third party unaffiliated with any of the Commitment
Parties with respect to which the applicable Indemnified Person is entitled to
indemnification under the first paragraph of this Section 5.

 

 9 

 

 

6.Assignments

 

This Commitment Letter may not be assigned by you without the prior written
consent of each of the Commitment Parties (and any purported assignment without
such consent will be null and void), is intended to be solely for the benefit of
the parties hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any person (including equity holders, employees or
creditors of the Company) other than the parties hereto (and any Indemnified
Person). This Commitment Letter may not be assigned by any Commitment Party
without the consent of each other party hereto (and any purported assignment
without such consent will be null and void); provided that, (i) subject to
Section 3, the Initial Lenders may assign their commitments in connection with
the syndication of the Facilities and, (ii) in the case of an assignment to the
Additional Commitment Party pursuant to Section 1 above, Barclays and JPMorgan
shall assign the applicable portion of their respective commitments to the
Additional Commitment Party and will be released from that portion of their
respective commitments and agreements hereunder that have been so assigned. This
Commitment Letter (including the Term Sheets) may not be amended or any term or
provision hereof waived or modified except by an instrument in writing signed by
each of the parties hereto.

 

7.USA PATRIOT Act Notification

 

The Arrangers hereby notify the Company, the Borrowers and the Guarantors that,
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Patriot Act”), it and each Lender may
be required to obtain, verify and record information that identifies the
Borrowers and the Guarantors, which information includes the name and address of
the Borrowers and the Guarantors and other information that will allow the
Arrangers and each Lender to identify the Borrowers and the Guarantors in
accordance with the Patriot Act. This notice is given in accordance with the
requirements of the Patriot Act and is effective for each Arranger and each
Lender, and you agree that the Arrangers shall be permitted to share such
information with the Lenders.

 

8.Sharing Information; Affiliate Activities; Absence of Fiduciary Relationship

 

Please note that this Commitment Letter, the Fee Letter and any communications
provided by the Commitment Parties or any of their affiliates in connection with
the Transactions (collectively with the Commitment Letter and the Fee Letter,
the “Transaction Information”) may not be disclosed to any person or entity
other than the Board of Directors and senior management of the Company or
circulated or referred to publicly without our prior written consent except,
after providing prior written notice to the Commitment Parties (but only as and
to the extent the provision of such notice is reasonably practicable), pursuant
to applicable law or compulsory legal process, including without limitation a
subpoena or order issued by a court of competent jurisdiction or by a judicial,
administrative or legislative body or committee; provided that (x) we hereby
consent to your disclosure of (i) the Transaction Information to your officers,
directors, employees, agents, attorneys, accountants, advisors and controlling
persons who are directly involved in the consideration of the Facilities to the
extent you notify such persons of their obligation to keep such Transaction
Information confidential and such persons agree to hold the same in confidence,
(ii) this Commitment Letter or the information contained herein and the Term
Sheets (but not the Fee Letter or the information contained therein other than a
version of the Fee Letter redacted in a customary manner reasonably satisfactory
to the Commitment Parties) to the Target, the Seller and their respective
officers, directors, employees, agents, attorneys, accountants, advisors and
controlling persons who are directly involved in the consideration of the
Facilities to the extent you notify such persons of their obligation to keep
this Commitment Letter, such Term Sheets and the information contained herein
and therein confidential and such persons agree to hold the same in confidence,
(iii) the Term Sheets to any ratings agencies on a confidential basis in
connection with the Transactions, (iv) this Commitment Letter or the information
contained herein and the Term Sheets (but not the Fee Letter or the information

 

 10 

 

 

contained therein) in any syndication or other marketing materials, prospectus
or other offering memorandum, in each case relating to the Facilities, (v) the
Term Sheets (but not this Commitment Letter or the Fee Letter) to potential debt
providers in coordination with us to obtain commitments to the Facilities from
such potential debt providers, (vi) this Commitment Letter or the information
contained herein and the Term Sheets (but not the Fee Letter or the information
contained therein) to the extent customary or required in any public or
regulatory filing relating to the Transactions, (vii) you may disclose the
aggregate amounts contained in the Fee Letter as part of the projections, pro
forma information or a generic disclosure of aggregate sources and uses related
to fee amounts related to the Transactions to the extent customary or required
in offering and marketing materials for the Facilities or to the extent
customary or required in any public or regulatory filing relating to the
Transactions and (viii) after the Acceptance Date, you may disclose this
Commitment Letter and the Fee Letter and the contents of each thereof (including
the Term Sheets and other exhibits and attachments hereto) to any potential
Additional Commitment Party to the extent in contemplation of appointing such
person pursuant to the provisions of Section 1 of this Commitment Letter and to
any such person’s affiliates and its and their respective officers, directors,
employees, agents, attorneys, accountants, advisors, controlling persons and
equity holders, in each case, on a confidential and need-to-know basis;
provided, further that the foregoing restrictions shall cease to apply (except
in respect of the Fee Letter and the contents thereof) after the earlier of the
Closing Date and the date that is 2 years after the Acceptance Date.

 

We shall use all nonpublic information received by us and our affiliates from or
on behalf of you in connection with this Commitment Letter and the transactions
contemplated hereby solely for the purposes of negotiating, evaluating and
consulting on the transactions contemplated hereby and providing the services
that are the subject of this Commitment Letter and shall treat confidentially,
together with the terms and substance of this Commitment Letter and the Fee
Letter, all such information; provided, however, that nothing herein shall
prevent us from disclosing any such information (a) to rating agencies on a
confidential basis in connection with our mandate hereunder (b) to any Lenders
or participants or prospective Lenders or participants who have agreed to be
bound by confidentiality and use restrictions in accordance with the proviso to
this sentence, (c) in any legal, judicial, administrative proceeding or other
compulsory process or otherwise as required by applicable law or regulations (in
which case we shall promptly notify you, in advance, to the extent reasonably
practicable and permitted by law), (d) upon the request or demand of any
regulatory authority having jurisdiction over us or our affiliates (in which
case we shall, except with respect to any audit or examination conducted by bank
accountants or any regulatory authority exercising examination or regulatory
authority, promptly notify you, in advance, to the extent reasonably practical
and permitted by law), (e) to our officers, directors, employees, legal counsel,
independent auditors, professionals and other experts or agents (collectively,
“Representatives”) who are informed of the confidential nature of such
information and who are subject to customary confidentiality obligations of
professional practice or who agree to be bound by the terms of this paragraph
(or language substantially similar to this paragraph) (with each such Commitment
Party, to the extent within its control, responsible for such Representatives’
compliance with this paragraph), (f) to any of our affiliates and their
Representatives (provided that any such affiliate or Representative is advised
of its obligation to retain such information as confidential, and we shall be
responsible for such affiliates’ compliance with this paragraph) to be utilized
solely in connection with rendering services to you or the Borrower in
connection with the Transactions, (g) to the extent any such information becomes
publicly available other than by reason of disclosure by us, our affiliates or
any of our respective Representatives in breach of this Commitment Letter (h) to
the extent that such information is received by us from a third party that is
not, to our knowledge, subject to confidentiality obligations owing to you or
any of your affiliates or related parties (i) to the extent that such
information is independently developed by us, (j) for purposes of establishing a
“due diligence” defense (in which case we shall promptly notify you, in advance,
to the extent permitted by law) or (k) to any hedge provider or prospective
hedge provider (collectively, “Specified Counterparties”) subject to the
provisions of the proviso to this paragraph; provided that the disclosure of any
such information to any Lenders or prospective Lenders or participants

 

 11 

 

 

or prospective participants or Specified Counterparties referred to above shall
be made subject to the acknowledgment and acceptance by such Lender or
prospective Lender or participant or prospective participant or Specified
Counterparty that such information is being disseminated on a confidential basis
(on substantially the terms set forth in this paragraph or as is otherwise
reasonably acceptable to you and us, including, without limitation, as agreed in
any confidential information memorandum or other marketing materials) in
accordance with our standard syndication processes or customary market standards
for dissemination of such type of information. The provisions of this paragraph
shall automatically be superseded by the confidentiality provisions to the
extent covered in the definitive documentation for the Facilities upon the
initial funding thereunder and shall in any event automatically terminate two
years following the Acceptance Date.

 

You acknowledge that the Commitment Parties and their respective affiliates may
from time to time effect transactions, for their own account or the account of
customers, and may hold positions in loans or options on loans of the Company,
the Target and other companies that may be the subject of the Transactions. In
addition, each of the Commitment Parties and their respective affiliates are
full service securities or banking firms and as such may from time to time
effect transactions, for their own account or the account of customers, and may
hold long or short positions in securities or options on securities of the
Company, the Target and other companies that may be the subject of the
Transactions. You acknowledge that each Commitment Party and their affiliates
may be providing debt financing, equity capital, investment banking or other
services (including financial advisory services) to other companies in respect
of which you may have conflicting interests regarding the transactions described
herein or otherwise, and that each Commitment Party and its affiliates may have
economic interests that are different from or conflict with those of the Company
regarding the Transactions. You acknowledge that no Commitment Party has any
obligation to disclose such interests and transactions to you by virtue of any
fiduciary, advisory or agency relationship and you waive, to the fullest extent
permitted by law, any claims you may have against any Commitment Party for
breach of fiduciary duty or alleged breach of fiduciary duty and agree that no
Commitment Party will have any liability (whether direct or indirect) to you in
respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on your behalf, including your equity holders, employees or
creditors. You acknowledge that the Transactions (including the exercise of
rights and remedies hereunder and under the Fee Letter) are arms’-length
commercial transactions and that we are acting as principal and in our own best
interests. The Company is relying on its own experts and advisors to determine
whether the Transactions are in the Company’s best interests. You agree that we
will act under this Commitment Letter and the Fee Letter as an independent
contractor and that nothing in this Commitment Letter, the Fee Letter, the
nature of our services or in any prior relationship will be deemed to create an
advisory, fiduciary or agency relationship between us, on the one hand, and the
Company, its equity holders or its affiliates, on the other hand, in connection
with the financing contemplated hereby. In addition, we may employ the services
of our respective affiliates and branches in providing any of the services
hereunder and may exchange with such affiliates information concerning the
Company, the Target and other companies that may be the subject of the
Transactions and such affiliates or branches will be entitled to the benefits
afforded to, and subject to the limitations and restrictions binding upon, us
hereunder.

 

In addition, please note that Barclays has been retained by you as financial
advisor (in such capacity, the “Financial Advisor”) to you in connection with
the Acquisition. You agree to such retention, and further agree not to assert
any claim you might allege based on any actual or potential conflicts of
interest that might be asserted to arise or result from, on the one hand, the
engagement of the Financial Advisor, and on the other hand, our and our
affiliates’ relationships with you as described and referred to herein.

 

Consistent with our policies to hold in confidence the affairs of our customers,
we will not use or disclose confidential information obtained from you by virtue
of the Transactions in connection with our performance of services for any of
our other customers (other than as permitted to be disclosed under this

 

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Section 8). Furthermore, you acknowledge that neither we nor any of our
affiliates have an obligation to use in connection with the Transactions, or to
furnish to you, confidential information obtained or that may be obtained by us
from any other person.

 

Additionally, you acknowledge and agree that no Commitment Party nor their
respective affiliates are advising you as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. You shall consult with
your own advisors concerning such matters and shall be responsible for making
your own independent investigation and appraisal of the transactions
contemplated hereby, and no Commitment Party nor their respective affiliates
shall have any responsibility or liability to you with respect thereto. Any
review by the Commitment Parties or their affiliates of you, the Borrowers, the
Transactions, the other transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the benefit of the
Commitment Parties and shall not be on behalf of you or any of your affiliates.

 

9.Waiver of Jury Trial; Governing Law; Submission to Jurisdiction; Surviving
Provisions

 

Any right to trial by jury with respect to any action, suit, proceeding OR CLAIM
arising in connection with or as a result of any matter referred to in thIS
Commitment Letter or the Fee Letter is hereby IRREVOCABLY waived by the parties
hereto. This Commitment Letter WILL be governed by and construed in accordance
with the laws of the State of New York.

 

Each of the parties hereto hereby irrevocably and unconditionally (i) submits,
for itself and its property, to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, New York County, located in the Borough of
Manhattan and (b) the United States District Court for the Southern District of
New York and any appellate court from any such court, in any action, suit,
proceeding or claim arising out of or relating to this Commitment Letter, the
Fee Letter or the performance of services hereunder or under the Fee Letter, or
for recognition or enforcement of any judgment, and agrees that all claims in
respect of any such action, suit, proceeding or claim may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court, (ii) waives, to the fullest extent that it may legally and
effectively do so, any objection that it may now or hereafter have to the laying
of venue of any action, suit, proceeding or claim arising out of or relating to
this Commitment Letter, the Fee Letter or the performance of services hereunder
or under the Fee Letter in any such New York State or Federal court and
(iii) waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of any such action, suit, proceeding or
claim in any such court. Each of the parties hereto agrees to commence any such
action, suit, proceeding or claim either in the United States District Court for
the Southern District of New York or in the Supreme Court of the State of New
York, New York County located in the Borough of Manhattan.

 

This Commitment Letter and any written or oral communications provided by the
Commitment Parties or any of their affiliates in connection with the
Transactions are issued for your benefit only and no other person or entity
(other than the Indemnified Persons) may rely hereon or thereon.

 

Each of the parties hereto agrees that (i) this Commitment Letter is a binding
and enforceable agreement with respect to the subject matter contained herein,
including an agreement of each party to negotiate in good faith the Loan
Documents by the parties hereto in a manner consistent with this Commitment
Letter, it being acknowledged and agreed that the commitments provided hereunder
are subject only to conditions precedent as expressly provided herein, and (ii)
the Fee Letter is a legally valid and binding agreement of the parties thereto
with respect to the subject matter set forth therein.

 

 13 

 

 

Except to the extent otherwise specified in this Commitment Letter, the
provisions of Sections 3, 5 and 8 and this Section 9 of this Commitment Letter
will survive any termination or completion of the arrangements contemplated by
this Commitment Letter or the Fee Letter, or the Transactions, including without
limitation whether or not the Loan Documents are executed and delivered and
whether or not the Facilities are made available or any loans under the
Facilities are incurred, and Section 3 of this Commitment Letter will survive
any termination of this Commitment Letter pursuant to clause (i) of the first
sentence of Section 10 below and the completion of the Transactions. You may
terminate this Commitment Letter and the Initial Lenders’ commitments with
respect to the Facilities hereunder at any time subject to the provisions of the
preceding sentence. In addition, in the event that a lesser amount of
indebtedness is required to fund the Transactions for any reason (including by
virtue of the receipt of proceeds by the Company from the issuance of additional
shares of its capital stock), you may, in your sole discretion, reduce the
Initial Lenders’ commitments with respect to the Term Facility (on a pro rata
basis amongst the Initial Lenders).

 

10.Termination; Acceptance

 

Our commitments hereunder and our agreements to provide the services described
herein will automatically (and without further action) terminate upon the first
to occur of (such first date, the “Termination Date”) (i) the consummation of
the Acquisition with or without the use of the Facilities, (ii) your written
notice to us of your abandonment of the Acquisition, (iii) the termination of
the Acquisition Agreement (or the termination of your obligations under the
Acquisition Agreement to consummate the Acquisition in accordance with the terms
thereof), (iv) your written notice to us of your election to terminate the
commitments for all of the Facilities, our agreements to provide the services
described herein, and your obligations described herein and (v) 11:59 p.m., New
York City time, on February 1, 2017 (the “Outside Date”) unless the closing of
the Facilities, as applicable, has been consummated on or before such date on
the terms and subject to the conditions set forth herein.

 

This Commitment Letter may be executed in any number of counterparts, each of
which when executed will be an original and all of which, when taken together,
will constitute one agreement. Delivery of an executed counterpart of a
signature page of this Commitment Letter by facsimile or other electronic
transmission will be as effective as delivery of a manually executed counterpart
hereof. This Commitment Letter and the Fee Letter set forth the entire
understanding of the parties with respect to the Facilities and supersede any
prior written or oral agreements among the parties hereto with respect to the
Facilities. Those matters that are not covered in this Commitment Letter or in
the Fee Letter are subject to mutual agreement of the parties. This Commitment
Letter is in addition to the agreements of the parties set forth in the Fee
Letter. No person has been authorized by any Commitment Party to make any oral
or written statements that are inconsistent with this Commitment Letter and the
Fee Letter.

 

Please confirm that the foregoing is in accordance with your understanding by
signing and returning to the Commitment Parties the enclosed copy of this
Commitment Letter, together, if not previously executed and delivered, with the
Fee Letter on or before 11:59 p.m., New York City time, on July 22, 2016,
whereupon this Commitment Letter and the Fee Letter will become binding
agreements between us. If not signed and returned as described in the preceding
sentence by such date, this offer will terminate on such date.

 

[The remainder of this page is intentionally left blank.]

 

 14 

 

 

We look forward to working with you on this assignment.

 

  Very truly yours,       BARCLAYS BANK PLC         By:    /s/ REGINA TARONE    
Name:  Regina Tarone     Title:  Managing Director

 

 

 

 

We look forward to working with you on this assignment.

 

  Very truly yours,       JPMORGAN CHASE BANK, N.A.         By:    /s/ DONNA
DIFORIO     Name:  Donna DiForio     Title:  Authorized Officer

 

 

 

 

Accepted and agreed to as of the date first above written:

 

G-III APPAREL GROUP, LTD         By:    /s/ WAYNE S. MILLER     Name:  Wayne S.
Miller     Title:  Chief Operating Officer  

 

 

 

 

Exhibit A

 

Project Brand II
Transaction Description

 

Capitalized terms used but not defined herein have the meanings assigned to such
terms as set forth in the Commitment Letter to which this Exhibit A is attached.
In the case of any such capitalized term that is subject to multiple and
differing definitions, the appropriate meaning thereof in this Exhibit A shall
be determined by reference to the context in which it is used.

 

G-III Apparel Group, Ltd., a corporation organized under the laws of the State
of Delaware, intends to acquire (the “Company”), the capital stock of an entity
codenamed “Brand II” (the “Target”), from LVMH Moet Hennessy Louis Vuitton Inc.,
a corporation organized under the laws of the State of Delaware (the “Seller”).
The Company intends to consummate the Acquisition pursuant to a Stock Purchase
Agreement, dated as of the date hereof (together with all exhibits, annexes,
schedules and other disclosure letters thereto, collectively, as modified,
amended or waived as permitted by the Commitment Letter, the “Acquisition
Agreement”) by and between the Company and Seller, pursuant to which the Company
will purchase the Shares (as defined in the Acquisition Agreement) from the
Seller and the Seller will receive cash in exchange for Shares (collectively,
the “Acquisition Consideration”), and the Target will become a wholly-owned
direct or indirect subsidiary of the Company.

 

In connection with the foregoing, it is intended that:

 

1.The Borrower will obtain a $450.0 million aggregate principal amount senior
secured term loan B facility described in Exhibit B to the Commitment Letter
(the “Term Facility”).

 

2.The Borrower will (i) obtain borrowings of up to the amount specified in the
ABL Facility Term Sheet under a new $525.0 million aggregate principal amount
senior secured asset-based revolving credit facility described in Exhibit C to
the Commitment Letter and (ii) in connection with the other Transactions, repay
in full the principal, accrued and unpaid interest, fees, premium, if any, and
other amounts, other than (A) contingent obligations not then due and payable
and that by their terms survive the termination of the Existing ABL Facility (as
defined below) and (B) certain existing letters of credit outstanding under the
Existing ABL Facility that on the Closing Date will be grandfathered into, or
backstopped by, the ABL Facility as described in Exhibit C or cash
collateralized in a manner satisfactory to the issuing banks thereof under that
certain Credit Agreement, dated as of August 6, 2012 (as amended by the
Amendment to Credit Agreement dated as of October 1, 2013, and as further
amended, supplemented or otherwise modified from time to time prior to the date
hereof, the “Existing ABL Facility”), by and among the Borrowers and the Loan
Guarantors (each as defined therein) party thereto, the lenders from time to
time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the
administrative agent thereunder, and terminate all commitments to extend credit
under the Existing ABL Facility and any security interests and guarantees in
connection therewith shall be terminated and/or released (the “ABL
Refinancing”).

 

3.The Borrower will consummate the Equity Issuance and will enter into the $75.0
million Seller Note.

 

 Exhibit A-1 

 

 

4.Immediately after giving effect to the Acquisition, all Financial Debt (as
defined in the Acquisition Agreement) shall have been settled and/or repaid in
full in connection with the other Transactions and all commitments to extend
credit under any documentation governing any such Financial Debt will be
terminated and any security interests and guarantees in connection therewith
shall be terminated and/or released (together with the ABL Refinancing, the
“Refinancings”).

 

5.The proceeds of the Term Facility, permitted borrowings under the ABL
Facility, the Seller Note and the Equity Issuance will be applied (i) as
described above to pay the Acquisition Consideration, (ii) to pay the fees and
expenses incurred in connection with the Transactions (such fees and expenses,
including any original issue discount, the “Transaction Costs”) and (iii) to pay
for the Refinancings (the amounts payable above, collectively, the “Acquisition
Funds”).

 

The transactions described above (including the payment of Transaction Costs)
are collectively referred to herein as the “Transactions”.

 

 Exhibit A-2 

 

 

Exhibit B

 

Project Brand II
Summary of Terms and Conditions of the Term Facility

 

Capitalized terms used but not defined herein have the meanings assigned to such
terms as set forth in the Existing ABL Facility and if not defined therein, in
the Commitment Letter (including Exhibits A, C and D thereto) to which this
Exhibit B is attached.

 

Borrower: The Company (the “Borrower”).     Guarantors: All obligations of the
Borrower under the Term Facility and under any Incremental Facility (as defined
below) will be unconditionally guaranteed by the Borrower (other than with
respect to its own primary obligations), and each existing and each subsequently
acquired or organized direct or indirect wholly-owned domestically organized
restricted subsidiary of the Borrower, subject to customary exceptions
(including, without limitation, (a) no Guarantee from (i) any Excluded
Subsidiary (as such term is defined in the Existing ABL Facility) and (b) where
the Borrower and the Term Administrative Agent reasonably determine that the
costs of obtaining such a Guarantee are excessive in relation to the value
afforded thereby).  The Borrower and any such subsidiary guarantors are each
herein referred to as a “Loan Party”.     Term Facility Arrangers: Barclays and
JPMorgan, together with the financial institution appointed as the Additional
Commitment Party, will act as the Term Facility Arrangers for the Term Facility
and will perform the duties customarily associated with such role.     Term
Administrative Agent: Barclays will act as sole and exclusive Term
Administrative Agent for the Lenders and will perform the duties customarily
associated with such role.     Term Collateral Agent: Barclays will act as sole
and exclusive Term Collateral Agent for the Lenders and other secured parties
and will perform the duties customarily associated with such role.    
Syndication Agents: JPMorgan and each Additional Commitment Party will act as
the sole and exclusive syndication agents for the Term Facility and will perform
the duties customarily associated with such role.     Documentation Agents: One
or more financial institutions appointed by the Company in consultation with the
Term Facility Arrangers.     Lenders: Banks, financial institutions and
institutional lenders initially selected by the Term Facility Arrangers with the
consent of the Borrower (not to be unreasonably withheld, delayed or
conditioned).     Transactions: As described in Exhibit A.

 

 Exhibit B-1 

 

 

Amount of Term Facility: Senior secured tranche B term loan facility, consisting
of a $450.0 million US Dollar denominated term loan (the “Term Facility”) plus,
at the Borrower’s election and, without duplication, of any borrowings made
under the ABL Facility as described under clause (iii) under the heading
“Availability” in Exhibit C, an amount sufficient to fund any original issue
discount or upfront fees required to be funded in connection with the exercise
of “Market Flex Provisions” in the Fee Letter (which amount shall be
automatically added to the Commitment Parties’ commitments under the Commitment
Letter).     Purpose/Use of Proceeds: The proceeds of the Term Facility will be
used, along with proceeds of the ABL Facility, if drawn, proceeds from the
issuance of the Seller Note, proceeds from the Equity Issuance, cash on hand at
the Company and its subsidiaries and cash on hand at the Target and its
subsidiaries, to finance the Acquisition Funds and for working capital and
general corporate purposes.       Incremental Facilities: The Term Loan
Documents (as defined below) shall provide for the ability of the Borrower to
add one or more incremental term facilities or increase any then-existing term
loan facility, in each case under such documentation (the "Incremental
Facilities") in minimum amounts of USD to be agreed and in an aggregate total
principal amount not to exceed the sum of (i) the Maximum Base Incremental
Amount plus (ii) additional amounts so long as the Borrower is in pro forma
compliance (after giving effect to such Incremental Facility and any customary
and appropriate pro forma adjustments for acquisitions or dispositions or
prepayment of indebtedness in connection therewith (including adjustments for
cost-savings and synergies subject to parameters to be agreed), and assuming
that any cash proceeds of any Incremental Facilities will not be netted for the
purpose of determining compliance with the First Lien Net Leverage Ratio
calculated but without, for the avoidance of doubt, giving effect to any amount
incurred substantially simultaneously or contemporaneously therewith under
clause (i) above) that is less than or equal to 3.25 to 1.00 (the “Incremental
Leverage Test”).  For purposes hereof, the “Maximum Base Incremental Amount”
means, at any time, an amount equal to (a) $175.0 million minus (b) the sum of
(i) the aggregate amount of Incremental Facilities established under the Term
Facility in reliance on clause (i) of the immediately preceding sentence since
the Closing Date and (ii) the aggregate amount of Incremental Equivalent Debt
incurred in reliance on clause (i) of the preceding sentence since the Closing
Date.  The Incremental Facilities will be incurred by the Borrower and will rank
equal in right of payment, with the same guarantees and security as the Term
Facility.       The Incremental Facilities shall not initially be effective but
may be activated at any time and from time to time during the life of the Term
Facility at the request of the Borrower with consent required only from those
Lenders (including new lenders ("Additional Lenders") that are reasonably
acceptable to the Borrower; provided that the Term

 

 Exhibit B-2 

 

 

  Administrative Agent shall have consent rights (not to be unreasonably
withheld or delayed) with respect to such Additional Lender, if (and to the
extent) such consent would be required under the heading "Assignments and
Participations" for an assignment of loans or commitments, as applicable, to
such Additional Lender) that agree, in their sole discretion, to participate in
such Incremental Facility, and the following shall be conditions to the
effectiveness of any Incremental Facility: (a) no default or event of default
shall have occurred and be continuing or would result therefrom, except in the
case of an Incremental Facility incurred to finance a permitted Acquisition (as
defined below) or other permitted investment where no payment or bankruptcy
event of default will be the standard (except where customary “SunGard” or
“certain funds” conditionality is otherwise agreed to by the lenders providing
such Incremental Facility), (b) all representations and warranties shall be true
and correct in all material respects (except to the extent already qualified by
materiality, in which case accuracy in all respects is required) immediately
prior to, and after giving effect to, the incurrence of such Incremental
Facility (except where customary “SunGard” or “certain funds” conditionality is
otherwise agreed to by the lenders providing such Incremental Facility, in which
case such limited conditionality shall apply), (c) the maturity date of any such
Incremental Facility shall be no earlier than the maturity date for the Term
Facility, (d) the weighted average life to maturity of any Incremental Facility
shall be no shorter than the weighted average life to maturity of the Term
Facility, and (e) the interest margins for the Incremental Facility shall be
determined by the Borrower and the lenders of the Incremental Term Facility,
provided that in the event that the Effective Yield for any Incremental Facility
raised within twelve (12) months of the Closing Date are greater than the
Effective Yield for the Term Facility by more than 50 basis points (the "Yield
Differential"), then the Applicable Margin for the Term Facility shall be
increased to the extent necessary so that the Effective Yield for such
Incremental Facility is not more than 50 basis points higher than the Effective
Yield for the Term Facility; provided that, to the extent such terms and
documentation are not identical to the Term Facility (except to the extent
permitted by clause (c), (d) or (e) above), they shall be reasonably
satisfactory to the Administrative Agent.  “Effective Yield” shall mean, as of
any date of determination, the sum of (i) the interest rate margins as of such
date (with the effect of any interest rate floors to be determined in a manner
set forth in the proviso below) and (ii) original issue discount (“OID”) and/or
upfront fees paid and payable (which shall be deemed to constitute like amounts
of OID) by the Borrower to the Lenders in connection with the Term Facility or
Incremental Facility (with OID or upfront fees being equated to interest based
on assumed four-year life to maturity) (it being understood that customary
arrangement or commitment fees payable to any of the Term Facility Arrangers (or
their respective affiliates) in connection with the Term Facility, as
applicable, or to one or more arrangers or bookrunners (or their affiliates) of
any Incremental Facility shall be excluded); provided that, with respect to any
LIBOR

 

 Exhibit B-3 

 

 

  or ABR floor for any Incremental Facility, (A) to the extent that the LIBOR
rate or ABR rate (without giving effect to any floors in such definition), as
applicable, in respect of the Incremental Facility on the date the Effective
Yield is being calculated is less than such floor, the amount of such difference
shall be deemed added to the interest rate margin for the Incremental Facility
for the purpose of calculating the Effective Yield, (B) to the extent that the
LIBOR rate or ABR rate (without giving effect to any floors in such definition),
as applicable, in respect of the Incremental Facility on the date the Effective
Yield is being calculated is greater than such floor, then the floor shall be
disregarded in calculating the Effective Yield and (C) it is understood and
agreed that any increase in interest rate margins to the Term Facility required
due to the application of a LIBOR or ABR floor in respect of any Incremental
Facility shall be effected solely through an increase in the LIBOR or ABR floor,
as applicable, for the Term Facility.       “First Lien Net Leverage Ratio”
means, as of any date of determination, the ratio of (i) Total Secured
Indebtedness, but excluding any secured indebtedness to the extent the liens
with respect thereto are junior or subordinated to the liens securing both of
the Facilities, as of the last day of the most recently ended four-fiscal
quarter period for which financial statements are available on or prior to such
date of determination to (ii) Consolidated EBITDA of the Borrower and its
restricted subsidiaries for such fiscal period.       “Senior Secured Net
Leverage Ratio” means, as of any date of determination, the ratio of (a) Total
Secured Indebtedness (as defined below) as of the last day of the most recently
ended four-fiscal quarter period for which financial statements are available on
or prior to such date of determination, to (b) Consolidated EBITDA (as defined
below) of the Borrower and its restricted subsidiaries for such fiscal period.  
    “Total Net Leverage Ratio” means, as of any date of determination, the ratio
of (a) Total Indebtedness (as defined below) as of the last day of the most
recently ended four-fiscal quarter period for which financial statements are
available on or prior to such date of determination, to (b) Consolidated EBITDA
(as defined below) of the Borrower and its restricted subsidiaries for such
fiscal period.       “Total Indebtedness” means, as of any date of
determination, the outstanding principal amount of funded indebtedness for
borrowed money, purchase money indebtedness and the principal portion of
financing leases, determined on a consolidated basis, of Borrower and its
restricted subsidiaries less all unrestricted cash and cash equivalents of the
Borrower and its restricted subsidiaries; provided that when calculating Total
Indebtedness, the amount of (i) borrowings under the ABL Facility included in
any such calculation shall be deemed to be the average daily amount drawn on the
ABL Facility over the immediately preceding four quarter period and (ii)

 

 Exhibit B-4 

 

 

  unrestricted cash and cash equivalents included in any such calculation shall
be deemed to be the average amount held by the Borrower and its restricted
subsidiaries over the immediately preceding four fiscal quarter period.      
“Total Secured Indebtedness” means, as of any date of determination, all Total
Indebtedness that is secured by liens on any assets or property of the Borrower
and its restricted subsidiaries.       “Consolidated EBITDA” shall be defined in
a manner substantially similar to the definition of “EBITDA” in the Existing ABL
Facility but (a) the Borrower shall be permitted to “add back” in such
calculations (i) any extraordinary, unusual or non-recurring expenses or losses,
(ii) any Transaction Costs and (iii) (x) demonstrable “run-rate” cost-savings,
operating expense reductions or other cost synergies that are reasonably
projected in good faith by the Company to be achieved in connection with the
Transactions, other acquisitions or dispositions or other initiatives within the
12-month period following the consummation of such transaction, that are
reasonably identifiable, quantifiable and factually supportable in the good
faith judgment of the Company and that are set forth in reasonable detail in a
certificate of a financial officer of the Company (calculated on a pro forma
basis as though such cost savings had been realized on the first day of such
period, net of the amount of actual benefits realized during such period from
such transaction); provided that, (x) the aggregate amount of such costs savings
added back during any four-quarter test period shall not exceed twenty percent
(20%) of Consolidated EBITDA (as calculated without giving effect to this cost
savings add-back) and (y) any costs incurred in connection with achieving such
savings, reductions or synergies and (b) there will be a deduction for
extraordinary, unusual or non-recurring income or gains.     Refinancing
Facilities: The Term Loan Documents shall provide for the ability of the
Borrower to refinance loans under the Term Facility or under any Incremental
Facility with one or more new term facilities (each, a “Refinancing Term
Facility”) under such documentation with the consent of the Borrower and the
institutions providing such Refinancing Term Facility or with one or more
additional series of senior unsecured notes or loans or senior secured notes or
loans incurred by the Borrower that will be secured by liens on the Collateral
ranking on an equal priority basis (but without regard to the control of
remedies) with the liens on the Collateral securing the Term Facility or junior
lien secured notes or loans incurred by the Borrower that will be secured by
liens on the Collateral ranking junior to the liens on the Collateral securing
the Term Facility, which will be subject to a customary intercreditor agreement
reasonably acceptable to the Administrative Agent and the Borrower (such notes
or loans, “Refinancing Notes” and, together with the Refinancing Term Facility,
the “Refinancing Indebtedness”) subject to customary limitations.

 

 Exhibit B-5 

 

 

Availability: One drawing may be made under the Term Facility on the Closing
Date.     Maturity Date: 6 years after the Closing Date.  The Term Loan
Documents shall contain “amend and extend” provisions pursuant to which
individual Lenders may agree to extend the maturity date of their outstanding
loans (which may include, among other things, an increase in the interest rates
payable with respect of such extended loans, with such extensions not subject to
any “default stoppers”, financial tests or “most favored nation” pricing
provisions upon the request of the Borrower and without the consent of any other
Lender (it is understood that (i) no existing Lender will have any obligation to
commit to any such extension and (ii) each Lender under the class being extended
shall have the opportunity to participate in such extension on the same terms
and conditions as each other Lender under such class)).     Amortization:
Commencing with the last day of the first full calendar quarter following the
Closing Date, the Term Facility will amortize in equal quarterly installments in
aggregate annual amounts equal to 1% of the original principal amount of the
Term Facility, with the remaining balance, together with all other amounts owed
with respect thereto, payable on the Maturity Date.     Interest Rate: All
amounts outstanding under the Term Facility will bear interest, at the
Borrower’s option, at a rate per annum equal to:       (a)    the Base Rate plus
the Applicable Margin per annum; or       (b)    the Adjusted LIBOR Rate plus
the Applicable Margin per annum;       provided, however, that at no time will
the Base Rate be deemed to be less than 2.00% per annum or the Adjusted LIBOR
Rate be deemed to be less than 1.00% per annum.       The “Applicable Margin”
shall mean, (i) with respect to Base Rate Loans, 3.50% and (ii) with respect to
LIBOR Loans, 4.50%, subject to one step down of 0.25% to be based on a Senior
Secured Net Leverage Ratio to be agreed (the “Term Facility Margin Step-Down”).
      “Base Rate” and “Adjusted LIBOR Rate” shall be defined in a manner
customary for transaction of this kind.     Default Interest: Upon and during
the continuance of any payment or bankruptcy event of default, and solely with
respect to any overdue amounts, the applicable interest rate plus 2.00% per
annum.     Voluntary Prepayments: Voluntary prepayments of borrowings under the
Term Facility will be permitted at any time, in minimum principal amounts to be
agreed upon, without premium or penalty, (subject to the premium described

 

 Exhibit B-6 

 

 

  in the next two sentences), subject to reimbursement of the Lenders'
redeployment costs in the case of a prepayment of Adjusted LIBOR loans other
than on the last day of the relevant interest period.  In the event that, within
six (6) months of the Closing Date, the Term Facility is refinanced, repaid or
repriced in connection with a Repricing Event (as defined below), such
prepayment, refinancing or repricing shall be made at 101% of the principal
amount prepaid, refinanced or repriced.  “Repricing Event” means (i) any
prepayment or re-payment of the Term Loans, in whole or in part, with the
proceeds of, or conversion of such Term Loans into, any new or replacement
tranche of term loans bearing interest with an Effective Yield less than the
Effective Yield applicable to the loans under the Term Facility (as such
comparative yields are determined in the reasonable judgment of the Term
Administrative Agent consistent with generally accepted financial practices) and
(ii) any amendment to the loans under the Term Facility which reduces the
Effective Yield applicable to the loans under the Term Facility (and any
assignment pursuant to the "yank-a-bank" provisions in connection therewith), in
each case of clauses (i) and (ii), solely to the extent the primary purpose of
such replacement or amendment, as reasonably determined by the Borrower in good
faith, is to reduce the Effective Yield on the loans under the Term
Facility.  Notwithstanding the foregoing, no such fee shall be payable if such
Repricing Event relates to new or replacement loans incurred in connection with
any transaction that would, if consummated, constitute a change of control or a
Transformative Acquisition.  For the purposes of this paragraph, “Transformative
Acquisition” shall mean any acquisition by the Borrower or one its restricted
subsidiaries that either (a) is not permitted by the terms of the Term Loan
Documents immediately prior to the consummation of such acquisition or (b) if
permitted by the terms of the Term Loan Documents immediately prior to the
consummation of such acquisition, would not provide the Borrower and it
restricted subsidiaries with adequate flexibility under the Term Loan Documents
for the continuation and/or expansion of their combined operations following
such consummation, as determined by the Borrower acting in good faith.       All
voluntary prepayments under the Term Facility shall be applied to the remaining
amortization payments thereunder as directed by the Borrower and as between the
Term Facility and any Incremental Facility, as directed by the Borrower.    
Mandatory Prepayments: Loans under the Term Facility and under any Incremental
Facility shall be prepaid with:       (a) 50% (stepping down to 25% if the
Senior Secured Net Leverage Ratio is less than or equal to 3.25 to 1.00 and to
0% if the Senior Secured Net Leverage Ratio is less than or equal to 2.75 to
1.00) of the Borrower’s annual excess cash flow (to be defined as mutually
agreed, but in any event calculated on the basis of net income (and not
Consolidated EBITDA) and to provide for a deduction from excess

 

 Exhibit B-7 

 

 

  cash flow, without duplication among periods, of operating cash flow used to
make acquisitions, make permitted investments (other than intercompany
investments, cash equivalents, money market instruments and certain other
limited exceptions), make certain distributions and dividends (in any event, not
to include those made under the Available Amount Basket, the Free and Clear
Basket or the general basket), or make capital expenditures, or to be used
within the succeeding twelve months to fund acquisition obligations for which
binding agreements exist or to make capital expenditures (in each case subject
to reversal of such deduction if such amount is not actually expended within
such twelve-month period)) commencing with the fiscal year ending January 31,
2018; provided that voluntary prepayments of loans under the Term Fees and under
any Incremental Facility shall reduce excess cash flow payments on a
dollar-for-dollar basis (except to the extent made with the proceeds of
long-term indebtedness or non-ordinary course disposition of property);      
(b) to the extent that the net cash proceeds of non-ordinary course asset sales
or other dispositions of property (including by condemnation and insurance
proceeds) by any Borrower or any of its restricted subsidiaries (collectively,
the "Restricted Group") (including, without limitation, insurance and
condemnation proceeds) exceeds, in the aggregate, an amount to be agreed in any
fiscal year, 100% of such excess net cash proceeds in excess of such amount to
be agreed of all non-ordinary course asset sales or other dispositions of
property by the Borrower or its restricted subsidiaries (including, without
limitation, insurance and condemnation proceeds), subject to exceptions to be
agreed upon and customary reinvestment rights if reinvested within twelve (12)
months of such sale or disposition (or committed to be reinvested within such
twelve (12) month period and reinvested within six (6) months thereafter); and  
    (c) 100% of the net cash proceeds of debt issued by the Borrower or its
restricted subsidiaries (other than debt permitted under the Term Loan
Documents, except for Refinancing Indebtedness, the net cash proceeds of which,
for the avoidance of doubt, will be applied as a mandatory prepayment to the
class of loans being refinanced as determined by the Borrower).       The above
described mandatory prepayments shall be applied to the installments thereof in
direct order of maturity and, other than with respect to mandatory prepayments
in respect of Refinancing Indebtedness, pro rata among classes of loans
outstanding under the Term Loan Documents and, if applicable, to any equal
priority secured Incremental Equivalent Debt (as defined below).       Any
Lender may elect not to accept any mandatory prepayment (each a "Declining
Lender"). Any prepayment amount declined by a Declining Lender may be retained
by the Borrower and any such retained amounts will not, solely for the purposes
of calculating mandatory prepayments, thereafter be counted as excess cash flow
or

 

 Exhibit B-8 

 

 

  net cash proceeds (as described above) in any subsequent measurement period.  
  Collateral: Subject to the limitations set forth below in this section,
obligations of the Loan Parties in respect of the Term Facility, any Incremental
Facility and the Guarantees will be secured by substantially all assets of the
Loan Parties, wherever located, now owned or hereafter acquired, including the
following (collectively, the "Collateral"):       (a) a perfected
second-priority security interest (subject to permitted liens) in the following,
whether owned on the Closing Date or thereafter acquired (collectively, the “ABL
Priority Collateral”): (i) all accounts receivable and credit card receivables
and other rights to payment (in each case, other than to the extent relating to
the sale or other disposition of Term Loan Priority Collateral (as defined
below)); (ii) inventory and documents related to inventory; (iii) instruments
(except to the extent relating to the sale or other disposition of Term Loan
Priority Collateral); (iv) general intangibles (other than intellectual
property) relating to accounts receivable and inventory; (v) deposit accounts,
security accounts, cash and cash equivalents (other than cash and cash
equivalents held in the Term Loan Asset Sale Proceeds Account referred to
below); (vi) guarantees, letters of credit rights, security, insurance,
supporting obligations and other credit enhancements, relating to accounts
receivable and inventory; and (vii) books and records; and       (b) a
first-priority security interest (subject to permitted liens) in the following
(collectively, the “Term Loan Priority Collateral”): all assets of the Loan
Parties (other than the ABL Priority Collateral), whether owned on the Closing
Date or thereafter acquired, including but not limited to: (i) machinery,
equipment, furniture, fixtures, vehicles, real property, intellectual property,
general intangibles (except those relating to accounts and inventory set forth
above), documents relating to equipment, (ii) instruments and other rights to
payment (including accounts receivable), in each case, solely to the extent
relating to the sale or other disposition of Term Loan Priority Collateral and
any deposit account or securities account that contain only proceeds of the sale
of any Term Loan Priority Collateral (the “Term Loan Asset Sale Proceeds
Account”), and (iii) the equity interests held directly by the Borrower or any
Guarantor in any restricted subsidiary (which pledge, in the case of any foreign
subsidiary, will be limited to 100% of the non-voting equity interests (if any)
and 66% of the voting equity interests of such foreign subsidiary).      
Additionally, each of the ABL Priority Collateral and the Term Loan Priority
Collateral, respectively, will include all proceeds thereof.  The priority of
such proceeds will be allocated among the secured parties in respect of the ABL
Facility (the “ABL Secured Parties”), lender (or lender affiliate)
counterparties under certain hedging arrangements (“Hedging Secured Parties”)
and certain banking

 

 Exhibit B-9 

 

 

  services arrangements (“Banking Services Secured Parties”) and the secured
parties in respect of the Term Facility (the “Term Loan Secured Parties”) as
provided in the intercreditor agreement referred to below to be entered into on
the Closing Date.       The obligations of the Loan Parties in respect of the
ABL Facility, certain hedging and banking services arrangements provided by the
lender (or lender affiliate) counterparties with respect to the ABL Facility
will be secured by a perfected first-priority security interest (subject to
permitted liens) in the ABL Loan Priority Collateral and a perfected
second-priority security interest (subject to permitted liens) in the Term Loan
Priority Collateral.  All such security interests will be perfected on the
Closing Date, subject to the Limited Conditionality Provisions provided in
Section 2 of this Commitment Letter.         Notwithstanding anything to the
contrary, the Collateral shall exclude the following: (A) motor vehicles and
other assets subject to certificates of title (to the extent a lien thereon
cannot be perfected by filing of a UCC financing statement); (B) pledges and
security interests (including in respect of interests in partnerships, joint
ventures and other non-wholly owned entities) to the extent prohibited by law or
prohibited by agreements containing anti-assignment clauses not overridden by
the UCC or other applicable law, other than proceeds and receivables thereof;
(C) all fee owned real property having a fair market value less than an amount
to be agreed (with all required mortgages being permitted to be delivered
post-closing subject to the requirements of the Limited Conditionality
Provisions) determined on the Closing Date for existing real property and on the
date of acquisition for any after acquired real property (or the date of
substantial completion of any material improvement thereon or new construction
thereof) and all real property leasehold interests (including requirements to
deliver landlord lien waivers, estoppels and collateral access letters, which
may, however, be required under certain eligibility requirements under the ABL
Facility); (D) intent to use trademark or service mark applications; (E) equity
interests in any person other than wholly owned restricted subsidiaries to the
extent not permitted by the terms of such subsidiary's organizational or joint
venture documents; and (F) any lease, license or other agreement or any property
subject to a purchase money security interest, capital lease obligation or
similar arrangements, in each case, to the extent permitted under the Term Loan
Documents to the extent that a grant of a security interest therein would
violate or invalidate such lease, license or agreement, purchase money, capital
lease or a similar arrangement or create a right of termination in favor of any
other party thereto (other than a Loan Party), in each case, after giving effect
to the applicable anti-assignment provisions of the UCC or other applicable law,
other than proceeds and receivables thereof.  In addition, (a) control
agreements shall not be required with respect to any deposit accounts,
securities accounts or commodities accounts except to the extent required by the
ABL Facility, (b) no perfection

 

 Exhibit B-10 

 

 

  actions shall be required with respect to (A) commercial tort claims not
exceeding an amount to be agreed, (B) motor vehicles and other assets subject to
certificates of title and (C) letter of credit rights, except to the extent
constituting a supporting obligation for other Collateral as to which perfection
is accomplished by the filing of a UCC financing statement or equivalent, (c)
promissory notes to the extent evidencing debt for borrowed money in a principal
amount (individually) of less than an amount to be agreed shall not be required
to be delivered, (d) share certificates of immaterial subsidiaries and
non-subsidiaries shall not be required to be delivered and (e) other than in
respect of any foreign borrowers or guarantors (to the extent applicable) under
the ABL Facility, no actions in any non-U.S. jurisdiction or required by the
laws of any non-U.S. jurisdiction shall be required to be taken to create any
security interests in assets located or titled outside of the U.S. or to perfect
or make enforceable any security interests in any such assets (it being
understood that there shall be no security agreements or pledge agreements
governed under the laws of any non U.S. jurisdiction, other than in respect of
any foreign borrowers or guarantors (to the extent applicable) under the ABL
Facility). For the avoidance of doubt, notwithstanding the foregoing, the Term
Loan Secured Parties will have a security interest in all collateral required
under the ABL Facility, which security interest shall be (x) senior to any lien
the ABL Secured Parties have in any Term Loan Priority Collateral and (y) junior
to any lien the ABL Secured Parties have in any ABL Priority Collateral.    
Intercreditor Matters: The relative rights and priorities in the ABL Priority
Collateral and the Term Loan Priority Collateral among the ABL Secured Parties,
the Hedging Secured Parties, Banking Services Secured Parties and the Term Loan
Secured Parties will be set forth in an intercreditor agreement that will
contain customary lien subordination, completion rights, collateral access and
intellectual property licensing provisions, all in form and substance reasonably
satisfactory to the Arrangers and the Borrower.  In addition, the relative
rights and priorities in the Collateral among the ABL Secured Parties, the Term
Loan Secured Parties and the holder of the Seller Note will be set forth in an
intercreditor agreement that will contain customary lien subordination
provisions for silent junior lien secured debt, all in form and substance
reasonably satisfactory to the Arrangers and the Borrower.     Term Loan
Documents: The definitive credit documentation for Term Facility (the “Term Loan
Documents”) shall contain the terms set forth in this Exhibit B (subject to the
right of the Term Facility Arrangers to exercise the “Market Flex Provisions”
under the Fee Letter) and, to the extent any other terms are not expressly set
forth in this Exhibit B, will (i) be negotiated in good faith within a
reasonable time period to be determined based on the expected Closing Date and
taking into account the timing of the syndication of the Term Facility and the
pre-closing requirements of the Acquisition Agreement and, if applicable, (ii)
contain such other terms as the Borrower and the Term Facility

 

 Exhibit B-11 

 

 

  Arrangers shall reasonably agree; it being understood and agreed that the Term
Loan Documents shall (A) be based upon the Existing ABL Facility (with
modifications to (x) include term loan specific provisions and (y) remove the
ABL specific borrowing mechanics, co-borrowing provisions, ABL specific
reporting obligations, ABL specific prepayment provisions, ABL specific
“payment” or “distribution” conditions and Section 6.12) and (B) be consistent
with the related security, pledge, collateral and guarantee agreements executed
and/or delivered in connection therewith; and as such documentation shall be
further modified by the terms set forth herein and subject to (i) materiality
qualifications and other exceptions that give effect to and/or permit the
Transactions, (ii) baskets, thresholds and exceptions that are to be agreed in
light of the Consolidated EBITDA, total assets and leverage level of the
Borrower and its subsidiaries, after giving effect to the Transactions, (iii)
such other modifications to reflect the operational and strategic requirements
of the Restricted Group (after giving effect to the Transactions) in light of
its increased size and geographic locations, (iv) modifications to reflect
changes in law or accounting standards since the date of the Existing ABL
Facility and (v) modifications to reflect reasonable operational and
administrative agency requirements of the Term Administrative Agent
(collectively, the “Documentation Considerations”).     Unrestricted
Subsidiaries: The Term Loan Documents will contain provisions pursuant to which,
subject to customary limitations on investments, loans, advances to, and other
investments in unrestricted subsidiaries, the Borrower will be permitted to
designate any existing or subsequently acquired or organized subsidiary as an
“unrestricted subsidiary” and subsequently re-designate any such unrestricted
subsidiary as a “restricted subsidiary”; provided that, (i) no event of default
shall have occurred and be continuing or would result from any such designation
and (ii) after giving effect to such designation, the Borrower’s pro forma Total
Net Leverage Ratio does not exceed 3.75 to 1.00.  Unrestricted subsidiaries will
not be subject to the mandatory prepayment, representation and warranty,
affirmative or negative covenant or event of default provisions of the Term Loan
Documents and the cash held by results of operations, indebtedness and interest
expense of unrestricted subsidiaries will not be taken into account for purposes
of determining any financial ratio or covenant contained in the Term Loan
Documents.     Representations and  Warranties:

Consistent with the Existing ABL Facility after giving effect to the
Documentation Considerations, with other appropriate exceptions and materiality
qualifiers to be agreed, consisting solely of the following (to be applicable to
the Borrower and its restricted subsidiaries only): organizational status, good
standing and powers; power and authority; execution, delivery and
enforceability; no violation of, or conflict with law or regulation,
organizational/constitutional documents or contractual obligations; governmental
and third-party

 

 Exhibit B-12 

 

 

  approvals/consents; financial statements (including pro forma financial
statements); no material adverse change; ownership of property; intellectual
property; litigation and environmental matters; compliance with laws and
agreements; Investment Company Act; taxes; pension plans; accuracy of
disclosure; consolidated Closing Date solvency after giving effect to the
Transactions; insurance; capitalization and subsidiaries; employment matters;
Patriot Act, OFAC, FCPA and other applicable sanction, anti-money laundering,
anti-bribery and anti-corruption laws; Federal Reserve regulations; and
creation, validity, perfection and priority of security interests, subject to
the Limited Conditionality Provisions set forth in Section 2 of the Commitment
Letter.     Affirmative Covenants: Consistent with the Existing ABL Facility
after giving effect to the Documentation Considerations, consisting solely of
the following (to be applicable to the Borrower and its restricted subsidiaries
only) (subject to customary exceptions and qualifications to be agreed):
delivery of audited annual consolidated and unaudited consolidated quarterly
financial statements (and annual audit opinions from nationally recognized
auditors that are not subject to any qualification as to "going concern" or
scope of the audit), delivery of consolidating financial statements reflecting
adjustments necessary to eliminate the accounts of unrestricted subsidiaries (if
any) from consolidated financial statements, annual projections, accountants'
letters, officers' certificates and other information reasonably requested by
the Lenders through the Administrative Agent; notices of defaults, material
adverse effects, litigation and other material events; payment of taxes;
maintenance of existence and material rights, privileges, licenses and permits;
compliance with laws and regulations (including environmental laws and labor
laws), compliance with the Patriot Act, OFAC, FCPA and other applicable
sanction, anti-money laundering, anti-bribery and anti-corruption laws; use of
proceeds; maintenance of property and insurance; maintenance of books and
records; right of the Lenders to inspect property and books and records;
commercially reasonable efforts to maintain public corporate credit and facility
ratings (but not a specific rating); and further assurances with respect to
guarantees, security interests and related matters.     Negative Covenants:
Consistent with the Existing ABL Facility after giving effect to the
Documentation Considerations, consisting solely of the following (to be
applicable to the Borrower and its restricted subsidiaries only) (in each case
with customary exceptions, qualifications and baskets to be agreed):       (a)
limitations on the incurrence of indebtedness, including guarantee obligations
and earn outs (which shall permit, among other things, the incurrence of (i)
indebtedness under the Term Facility (including Incremental Facilities) and
Refinancing Indebtedness, (ii) indebtedness under the ABL Facility and any
refinancing thereof in whole or in part, (iii) non-speculative hedging
arrangements and cash management obligations, (iv) indebtedness of the Target
and its

 

 Exhibit B-13 

 

 

  subsidiaries incurred prior to the Closing Date and listed on a schedule that
remains outstanding and is permitted to remain outstanding under the Acquisition
Agreement (except to the extent required to be repaid pursuant to the
Refinancing), (v) any (x) equal or junior priority secured or unsecured notes or
(y) junior priority secured or unsecured loans incurred or issued by the
Borrower in lieu of the Incremental Facilities (such loans or notes,
“Incremental Equivalent Debt”), which may be incurred on customary terms but
shall not be subject to an “MFN”, (vi) indebtedness incurred and/or assumed on
the terms set forth below (regarding debt assumed or incurred in connection with
a Permitted Acquisition or similar investment), subject to a non-Loan Party cap
to be agreed (and all of which shall be unsecured (except in the case of assumed
indebtedness)), (vii) purchase money indebtedness and financing leases (subject
to a cap to be agreed), (viii) indebtedness under a general debt basket in an
amount to be agreed and which may be secured to the extent permitted by
exceptions to the lien covenant, (ix) indebtedness of non-Guarantor subsidiaries
under a basket in an amount to be agreed), (x) other indebtedness, so long as
(i) after giving pro forma effect to such incurrence and any related
transaction, the Borrower’s Total Net Leverage Ratio shall be no greater than
3.50 to 1.00 (the “Ratio Debt Test”), (ii) if such indebtedness is secured by
all or any portion of the Collateral it is subject to a customary intercreditor
agreement reasonably acceptable to the Term Administrative Agent and the
Borrower and the liens shall be junior or subordinated to the liens securing
both the Term Facility and ABL Facility, (iii) such indebtedness matures no
earlier than 91 days after the latest maturity date of the Term Facility and
(iv) the weighted average life to maturity of such indebtedness shall be no
shorter than the weighted average life to maturity of the Term Facility, subject
to a cap on the amount of debt incurred by subsidiaries that are not Guarantors,
(xi) the Seller Note and (xii) unsecured indebtedness maturing no earlier than
91 days after the latest maturity date of the Term Facility in an amount equal
to 100% of any cash common equity contribution to the Borrower following the
Closing Date to the extent such cash equity contribution shall not be counted
for purposes of the Available Amount Basket (as defined below);       (b)
limitation on incurrence of liens (which shall permit, among other things, liens
securing (i) the Term Facility, ABL Facility (including any incremental
facilities and any refinancing facilities permitted as of the Closing Date
thereunder) and Incremental Facilities, (ii) any secured Incremental Equivalent
Debt, (iii) Refinancing Indebtedness, (iv) debt assumed in connection with a
Permitted Acquisition or similar investment (provided that, such liens extend
only to the same assets that such liens extended to, and/or secure the same
indebtedness, that such liens secured, immediately prior to such assumption and
were not created in contemplation thereof), (v) permitted purchase money
indebtedness or financing leases, (vi) obligations under a general lien basket
in an amount to be agreed (which in the case of consensual liens on Collateral
shall rank junior to the liens securing the Term Loan Documents and junior to
the liens

 

 Exhibit B-14 

 

 

  securing the ABL Facility), (vii) the Seller Note and (viii) obligations under
a non-Guarantor subsidiary lien basket (limited to liens on assets of
non-guarantor subsidiaries) equal to the size of the non-Guarantor subsidiary
debt basket);       (c) limitations on fundamental changes, mergers,
liquidations and dissolutions;       (d) sales of assets (including sale and
leasebacks) (which shall be permitted on the terms set forth below (regarding
asset sales));       (e) dividends, distributions and other payments (which
shall permit, among other things, (i) dividends, distributions or redemptions
with the Available Amount Basket as set forth and defined in below, (ii)
dividends, distributions or redemptions in connection with the Transactions, and
(iii) additional dividends, distributions or redemptions when the Free and Clear
RP Basket (as defined below) conditions are satisfied);       (f) investments,
acquisitions (which shall be permitted on the terms set forth in below regarding
Permitted Acquisitions), loans and advances (which, in addition, shall permit
(i) unlimited investments in the Borrower and in any Guarantor or by any
non-Guarantor in any other non-Guarantor, (ii) investments in restricted
subsidiaries that are not Guarantors subject to an aggregate amount to be
agreed, (iii) investments in connection with the Transactions and (iv) unlimited
investments when the Free and Clear Investment/Prepayment Basket (as defined
below) conditions are satisfied);       (g) transactions with affiliates;      
(h) prepayments, redemptions or repurchases of subordinated, junior lien or
unsecured “third-party” debt for borrowed money (collectively, “Junior Debt”)
and amending or otherwise modifying any documents related thereto in a manner
materially adverse to the Lenders;       (i) amending or otherwise modifying any
organizational documents in a manner materially adverse to the Lenders;      
(j) negative pledge clauses;       (k) changes in fiscal year;       (l)
restrictive agreements; and       (m) changes in lines of business.       The
Borrower and its restricted subsidiaries will be permitted to make acquisitions
of persons that become restricted subsidiaries or of assets (including assets
constituting a business unit, line of business or division) (each, a “Permitted
Acquisition”) and incur or assume

 

 Exhibit B-15 

 

 

  indebtedness in connection therewith subject to: (a) pro forma compliance,
after giving effect to any such transaction, with either (i) a Total Net
Leverage Ratio that is less than or equal to 3.75 to 1.00 or (ii) a Total Net
Leverage Ratio that is no greater than the Total Leverage Ratio immediately
prior to giving effect to any such acquisition (the “Permitted Acquisition
Leverage Ratios”); (b) no event of default shall have occurred and be continuing
or would result therefrom; (c) the acquired entity or business is in the same
line of business or carries on, or is, a business complementary to that carried
on by the Borrower and its restricted subsidiaries; (d) the Loan Parties comply
with the applicable covenants to provide Collateral and guarantees; and (e)
acquisitions of entities that do not become Guarantors (or of assets that do not
become Collateral) will be subject to the applicable limitations on investments
in non-Guarantor subsidiaries to be mutually agreed.       The Borrower or any
restricted subsidiary will be permitted to make non-ordinary course of business
asset sales or dispositions without limit so long as (a) such sales or
dispositions are for fair market value, (b) at least 75% of the consideration
for asset sales and dispositions shall consist of cash or cash equivalents,
subject to customary terms and limitations and (c) such asset sale or
disposition is subject to the terms set forth in the section entitled “Mandatory
Prepayments” hereof and subject to other customary terms and conditions to be
agreed (the “Asset Sale Exception”).       The negative covenants will be
subject, in the case of each of the foregoing covenants, to exceptions,
qualifications and “baskets” to be set forth in the Term Loan Documents that
will reflect the Documentation Considerations and the monetary baskets included
therein will include basket builders based on a percentage of the Company and
its subsidiaries’ consolidated total assets equivalent to the initial monetary
amount of each such basket and in addition shall include:       (1) an Available
Amount Basket based on (i) $35.0 million, plus (ii) the retained portion of
excess cash flow (i.e., the portion not required to be applied to prepay the
Term Loans under the excess cash flow sweep), plus (iii) permitted equity
proceeds, which may be used (without duplication) for restricted payments,
investments and the prepayment or redemption of Junior Debt; provided that the
ability to utilize the Available Amount Basket in connection with restricted
payments and payments or redemptions of Junior Debt shall be subject to (x) pro
forma compliance with a Total Net Leverage Ratio of 3.75 to 1.00 and (y) no
event of default shall have occurred and be continuing or would result
therefrom; and       (2) an additional basket to make restricted payments or
payments in respect of Junior Debt if the Total Net Leverage Ratio does not
exceed 3.00 to 1.00 and no event of default is then continuing or would result
therefrom (the “Free and Clear RP Basket”); and       (3) an additional basket
to make investments if the Total Net Leverage Ratio does not exceed 3.25 to 1.00
and no event of default is then continuing or would result therefrom (the “Free
and Clear Investment Basket”).

 

 Exhibit B-16 

 

 

Financial Covenant: None.     Limited Conditionality
Acquisition: For purposes of (i) determining compliance with any provision of
the Term Loan Documents that requires the calculation of a financial ratio (ii)
determining compliance with representations and warranties or the absence of
defaults or events of default or (iii) testing availability under baskets set
forth in the Term Loan Documents, in each case, in connection with an
acquisition by one or more of Borrower and its restricted subsidiaries of any
assets, business or person permitted to be acquired under the Term Loan
Documents, in each case whose consummation is not conditioned on the
availability of, or on obtaining, third party financing (any such acquisition, a
“Limited Condition Acquisition”), at the option of the Borrower (Borrower’s
election to exercise such option in connection with any Limited Condition
Acquisition, an “LCA Election”), the date of determination of whether any such
action is permitted hereunder, shall be deemed to be the date the definitive
agreements for such Limited Condition Acquisition are entered into (the “LCA
Test Date”), and if, after giving pro forma effect to the Limited Condition
Acquisition and the other transactions to be entered into in connection
therewith as if they had occurred at the beginning of the most recent test
period ending prior to the LCA Test Date, the Borrower could have taken such
action on the relevant LCA Test Date in compliance with such financial ratio or
basket, representation, warranty and absence of such default or event of
default, such financial ratio or basket, representation, warranty, absence of
default or event of default shall be deemed to have been complied with.      
For the avoidance of doubt, if the Borrower has made an LCA Election and any of
the financial ratios or baskets for which compliance was determined or tested as
of the LCA Test Date are exceeded as a result of fluctuations in any such
financial ratio or basket (including due to fluctuations of the target of any
Limited Condition Acquisition) solely as a result of fluctuations in
Consolidated EBITDA (as opposed to any incurrence, disposition or restricted
payment) at or prior to the consummation of the relevant transaction or action,
such baskets or financial ratios will not be deemed to have been exceeded as a
result of such fluctuations.       If the Borrower has made an LCA Election for
any Limited Condition Acquisition, then in connection with any subsequent
calculation of any financial ratio or basket availability on or following the
relevant LCA Test Date and prior to the earlier of (i) the date on which such
Limited Condition Acquisition is consummated or (ii) the date that the
definitive agreement for such Limited Condition Acquisition is

 

 Exhibit B-17 

 

 

  terminated or expires without consummation of such Limited Condition
Acquisition, any such financial ratio or basket availability shall be calculated
(and tested) on a pro forma basis assuming that such Limited Condition
Acquisition and other transactions in connection therewith (including any
incurrence of debt and the use of proceeds thereof) had been consummated (the
provisions of the foregoing two paragraphs, the “Limited Condition Acquisition
Provisions”). For the further avoidance of doubt, in the absence of an LCA
Election, unless specifically stated in the Term Loan Documents to be otherwise,
all determinations of compliance with (x) any Senior Secured Net Leverage Ratio
or Total Net Leverage Ratio test, (y) any representations and warranties, or any
requirement regarding the absence of defaults or events of default or (z) any
availability tests under baskets shall be made as of the applicable date of
incurrence of indebtedness, making of payment or consummation of acquisitions,
as applicable.     Events of Default: Consisting solely of the following (each
an “Event of Default”): nonpayment of principal when due; nonpayment of
interest, fees or other amounts after five (5) business days; material
inaccuracy of representations and warranties when made or deemed made; violation
of other covenants (subject, in the case of all affirmative covenants other than
notices of default and maintenance of existence of the Borrower, to a grace
period of thirty (30) days); cross-default and cross-acceleration to other
material debt (provided that, a breach of the ABL Financial Covenant (as defined
in Exhibit C) of the ABL Facility will not constitute an event of default under
the Term Loan Documents unless and until all of the commitments and loans under
the ABL Facility have been accelerated and permanently terminated); bankruptcy,
insolvency, and/or similar related events of any Loan Party or other material
restricted subsidiary thereof; material monetary judgments defaults; material
ERISA events; actual or asserted invalidity repudiation or rescission by a Loan
Party of a Term Loan Document (including the intercreditor agreement referred to
under the heading “Intercreditor Matters”) or any material guarantees or
security documents; failure to deliver the QoE Reports prior to the Closing
Date, subject to a grace period of thirty (30) days (which Event of Default
shall be waivable by the Arrangers in their sole discretion (without the consent
of any Lenders)); and change of control. While the accuracy of any
representation and warranty other than as set forth in Exhibit D is not a
condition precedent to the availability of the Facilities on the Closing Date,
all other representations and warranties shall be made on the Closing Date
(subject to “Clean-up Period” provisions (not to exceed 60 days after the
Closing Date) for defaults which are subject to cure).     Conditions Precedent
to Effectiveness and Borrowings On the Closing Date:

The several obligations of the Lenders to make, or cause one of their respective
affiliates to make, loans under the Term Facility on the Closing Date will be
subject to only the following conditions: (i) prior

 

 Exhibit B-18 

 

 

  written notice of borrowing and (ii) the conditions set forth or referred to
in Section 2 of this Commitment Letter (including those specified in Exhibit D
thereto).     Assignments and
Participations: The Lenders will be permitted to assign loans and commitments
with the consent of the Borrower (not to be unreasonably withheld, delayed or
conditioned and deemed to be given if no response is received within 10 business
days of the date of the request) (unless (x) a payment or bankruptcy event of
default has occurred and is continuing, (y) such assignment is to a Lender, an
affiliate of a Lender or a related fund or (z) such assignment is by the Term
Loan Arrangers during primary syndication of the Term Facility pursuant to a
pre-approved syndication strategy) and the Term Administrative Agent (unless
such assignment is an assignment to a Lender, an affiliate of a Lender or an
approved fund), in each case such consent not to be unreasonably withheld or
delayed. Each assignment (except to other Lenders or their affiliates or
approved funds) will be in a minimum amount of $1.0 million. The Administrative
Agent will receive a processing and recordation fee of $3,500, payable by the
assignor and/or the assignee, with each assignment.       The Lenders will be
permitted to participate loans and commitments without restriction. Voting
rights of participants shall be limited to matters in respect of (a) increases
in commitments, (b) reductions of principal, interest, premium or fees, (c)
extensions of scheduled amortization or final maturity or the due date of any
interest, premium or fee payment and (d) releases of all or substantially all of
the Collateral or all or substantially all of the value of the Guarantees.      
In addition, subject to the provisions below, non-pro rata distributions and
commitment reductions will be permitted in connection with loan buy-back or
similar programs on terms to be mutually agreed.       The Term Loan Documents
shall provide that (a) loans under the Term Facility or under any Incremental
Facilities may be purchased and assigned on a non-pro rata basis through (i)
open market purchases and/or (ii) Dutch auction or similar procedures to be
agreed that are offered to all Lenders on a pro rata basis in accordance with
customary procedures to be agreed and, in each case, subject to customary
restrictions to be agreed and (b) the Borrower and any other affiliates of the
Borrower shall be eligible assignees of loans under the Term Facility or under
any Incremental Facilities; provided that (i) any such loans under the Term
Facility or under any Incremental Facilities acquired by the Borrower or any of
its subsidiaries shall be cancelled (and be deemed automatically cancelled)
promptly upon acquisition thereof, (ii) no loan purchases shall be permitted by
the Borrower or any of its subsidiaries if a default or event of default has
occurred and is continuing and (iii) all parties to the relevant transactions
shall render customary "big boy" disclaimer letters and the Borrower (or such
subsidiary, as applicable)

 

 Exhibit B-19 

 

 

  shall have executed and delivered to the Term Administrative Agent an
Affiliated Lender assignment and assumption agreement.       No assignments or
participations may be made to Disqualified Lenders.  The Term Administrative
Agent shall have the right to (a) post the list of Disqualified Lenders provided
by the Borrower and any updates thereto from time to time (collectively, the “DQ
List”) on IntraLinks, SyndTrak Online or similar electronic means (the
“Platform”), including that portion of the Platform that is designated for
“public side” Lenders and/or (b) provide the DQ List to each Lender requesting
the same. The Term Administrative Agent shall not be responsible or have any
liability for, or have any duty to ascertain, inquire into, monitor or enforce,
compliance with the provisions of the Term Loan Documents relating to
Disqualified Lenders.     Voting: Amendments and waivers of the Term Loan
Documents will require the approval of Lenders (the “Required Lenders”) holding
more than 50.0% of the aggregate amount of loans and commitments under the Term
Facility and under any Incremental Facilities, except that: (a) the consent of
each Lender directly and adversely affected thereby shall be required with
respect to (i) increases in or extensions of commitments of such Lender, (ii)
reductions of principal, interest (other than default interest), premium or
fees, (iii) reductions in the amount of or extensions of scheduled amortization
or final maturity or the due date of any interest, premium or fee payment and
(iv) changes to the “default waterfall” and certain pro rata sharing and payment
provisions; (b) the consent of 100% of the Lenders will be required with respect
to (i) modifications to any of the voting percentages applicable thereto and
(ii) releases of liens on all or substantially all of the Collateral or all or
substantially all of the value of the Guarantees (other than in connection with
any sale of Collateral or of the relevant Guarantor permitted by the Loan
Documents); and (c) the consent of the Term Administrative Agent will be
required to amend, modify or otherwise affect the rights and duties of the Term
Administrative Agent.  Notwithstanding the foregoing, amendments and waivers of
the Term Loan Documents that affect solely the Lenders under the Term Facility
or any Incremental Facility, will require only the consent of Lenders holding
more than 50% of the aggregate commitments or loans, as applicable, under such
Term Facility or Incremental Facility.       The Term Loan Documents shall
contain customary provisions for replacing non-consenting Lenders in connection
with amendments and waivers requiring the consent of all relevant Lenders or of
all relevant Lenders directly affected thereby so long as relevant Lenders
holding at least 50% of the aggregate amount of the loans and commitments under
the Term Facility and Incremental Facility have consented thereto.       In
addition, if the Term Administrative Agent and the Borrower shall have jointly
identified an obvious error or any error or omission of a

 

 Exhibit B-20 

 

 

  technical nature in the Term Loan Documents, then the Term Administrative
Agent and the Borrower shall be permitted to amend such provision without any
further action or consent of any other party if the same is not objected to in
writing by the Required Lenders to the Term Administrative Agent within five (5)
business days following receipt of notice thereof.     Yield Protection and
Increased Costs: Usual for facilities and transactions of this type, including
customary tax gross-up provisions (including customary provisions relating to
the implementation of regulations related to Basel III and Dodd-Frank regardless
of the date enacted subject to agreed caveats); provided that any U.S. federal
withholding taxes imposed on any Lender under current Sections 1471 through 1474
of the U.S. Internal Revenue Code (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with) shall
be solely for the account and expense of such Lenders.     Indemnity and
Expenses: Provided that the Closing Date occurs, the Borrower shall pay (a) (i)
all reasonable and documented or invoiced out-of-pocket expenses of the Term
Administrative Agent and each Term Facility Arranger associated with the
syndication of the Term Facility and the preparation, execution, delivery and
administration of the Term Loan Documents and (ii) all reasonable and documented
or invoiced out-of-pocket expenses of the Term Administrative Agent and each
Term Facility Arranger, if applicable, associated with and any amendment or
waiver with respect to the Term Loan Documents (including, without limitation,
the reasonable and documented fees, disbursements and other charges of counsel
identified herein, one local counsel in each relevant material jurisdiction and,
solely in the case of an actual or perceived conflict of interest, one
additional counsel in each applicable material jurisdiction) and (b) all
reasonable and documented or invoiced out-of-pocket expenses of the Term
Administrative Agent, each Term Facility Arranger, if applicable, and the
Lenders (including, without limitation, the reasonable and documented fees,
disbursements and other charges of counsel) in connection with the enforcement
of the Term Loan Documents.       The Loan Parties will indemnify the Term
Administrative Agent, each Term Facility Arranger, and the Lenders and their
respective affiliates, and the officers, directors, employees, affiliates and
agents of the foregoing, and hold them harmless from and against all costs,
expenses (including, without limitation, reasonable and documented fees,
disbursements and other charges of counsel), losses, claims, damages and
liabilities of any such Indemnified Person arising out of or relating to any
claim or any litigation or other proceedings (regardless of whether any such
Indemnified Person is a party thereto or whether such claim, litigation, or
other proceeding is brought by a third party or by the Borrower or any of its
affiliates, creditors or shareholders) that relate to the Transactions; provided
that no Indemnified Person will be indemnified for its gross negligence, bad
faith or willful misconduct as determined by a court of competent

 

 Exhibit B-21 

 

 

  jurisdiction in a final non-appealable decision or for any dispute that is
solely among Indemnified Persons and does not arise from any act or omission by
the Borrower or any of its affiliates (other than a dispute involving claims
against the Term Administrative Agent in its capacity as such, or any Term
Facility Arranger or any of its affiliates solely in connection with its
syndication activities contemplated hereunder); provided, further that no
Indemnified Person or Borrower shall be liable for any indirect, special,
punitive or consequential damages (other than in respect of any such damages
incurred or paid by an Indemnified Person to a third party).     Bail-In
Provisions: The Term Facility shall contain customary European Union “bail-in”
provisions substantially in the form of the Loan Syndications and Trading
Association proposed standard form.     Governing Law and Forum: New York.    
Counsel to the
Administrative Agent
and Arrangers: Latham & Watkins LLP.

 

 Exhibit B-22 

 

 

Exhibit C

 

Project Brand II
Summary of Terms and Conditions of the ABL Facility

 

Capitalized terms used but not defined herein have the meanings assigned to such
terms as set forth in the Existing ABL Facility and if not defined therein, in
the Commitment Letter (including Exhibits A, B and D thereto) to which this
Exhibit C is attached.

 

Borrowers: G-III Leather Fashions, Inc., the other subsidiaries that are
Borrowers under the Existing ABL Facility and such other subsidiaries of the
Company, including the Target and certain of its subsidiaries, as may be
determined by the Company and, with respect to any foreign subsidiaries,
approved by the ABL Administrative Agent and the Lenders (collectively, the
“Borrowers”); provided that, the terms and conditions on which any subsidiaries
may be added as Borrowers shall be mutually agreed upon in the ABL Loan
Documents (as defined below).     Guarantors: All obligations of (i) the
Borrowers under the ABL Facility and (ii) the Borrowers or any of their
subsidiaries under each interest rate swap, currency or other hedging
obligations and banking services obligations owing to any Lender or any
affiliate thereof will be unconditionally guaranteed by the Company, the
Borrowers (with respect to obligations described in the preceding clause (ii))
and each existing and each subsequently acquired or organized direct or indirect
wholly-owned domestically organized restricted subsidiary of the Company (other
than the Borrowers as to their own primary obligations), subject to customary
exceptions (including, without limitation, (a) no Guarantee from any Excluded
Subsidiary (as such term is defined in the Existing ABL Facility) and (b) where
the Company and the ABL Administrative Agent reasonably determine that the costs
of obtaining such a Guarantee are excessive in relation to the value afforded
thereby).  The Company, the Borrowers and any such subsidiary guarantors are
each herein referred to as a “Loan Party”.  Notwithstanding the foregoing, if
any foreign borrowers are added to the ABL Facility, such foreign borrowers and
certain foreign subsidiaries may be added as guarantors pursuant to terms and
conditions to be mutually agreed upon.     ABL Facility Arrangers: JPMorgan and
Barclays, together with any financial institution appointed as an Additional
Commitment Party, will act as the ABL Facility Arrangers for the ABL Facility
and will perform the duties customarily associated with such role.     ABL
Administrative Agent: JPMorgan will act as sole and exclusive administrative
agent and collateral agent (in such capacities, the “ABL Administrative Agent”)
for the Lenders and will perform the duties customarily associated with such
role.     Syndication Agents: Barclays and each Additional Commitment Party will
act as the sole and exclusive syndication agents for the ABL Facility and will
perform the duties customarily associated with such role.

 

 Exhibit C-1 

 

 

Documentation Agents: One or more financial institutions appointed by the
Company in consultation with the ABL Facility Arrangers.     Lenders: Banks,
financial institutions and institutional lenders initially selected by the ABL
Facility Arrangers with the consent of the Company (not to be unreasonably
withheld, delayed or conditioned).     Transactions: As described in Exhibit A.
    ABL Facility: A senior secured asset-based revolving credit facility (the
“ABL Facility”) in an aggregate principal amount of $525.0 million.  Commitments
under the ABL Facility are referred to as “ABL Commitments”.     Purpose/Use of
Proceeds The proceeds of loans under the ABL Facility and of Letters of Credit
(as defined below) issued under the ABL Facility will be used by the Borrowers
and their subsidiaries for working capital and for other general corporate
purposes (including to finance the Transactions and any other transactions not
prohibited by the ABL Loan Documents (as defined below)).     Letter of Credit
Sub-Facility: No less than $100.0 million of the ABL Facility will be available
to the Borrowers for the purpose of issuing Letters of Credit and each
Commitment Party agrees to be an Issuing Lender (as defined below) in a fronting
capacity for at least $33.3 million of Letters of Credit.  Letters of Credit
will be issued by the ABL Administrative Agent and other Lenders (reasonably
acceptable to the Borrower and the ABL Administrative Agent) who agree to issue
Letters of Credit (each, an “Issuing Lender”) (provided that Barclays, in its
capacity as an Issuing Lender, shall not be required to issue commercial or
trade letters of credit or bank guarantees).  Each Letter of Credit shall expire
not later than the earlier of (a) 12 months after its date of issuance or such
longer period of time as may be agreed by the applicable Issuing Lender and (b)
the fifth business day prior to the final maturity of the ABL Facility; provided
that any Letter of Credit may provide for automatic renewal thereof for
additional periods of up to 12 months or such longer period of time as may be
agreed by the applicable Issuing Lender (which in no event shall extend beyond
the date referred to in clause (b) above, except to the extent cash
collateralized or backstopped pursuant to arrangements reasonably acceptable to
the relevant Issuing Lender).       Except as otherwise set forth in the
preceding paragraph, Letters of Credit shall be issued on terms and conditions
(including with respect to defaulting lenders) consistent with Existing ABL
Facility after giving effect to the Documentation Considerations (as defined
below).     Incremental Facilities: The ABL Loan Documents will permit the
Borrowers to increase commitments under the ABL Facility (any such increase, an
“Incremental ABL Facility”) such that the aggregate commitments under the ABL
Facility (including any Incremental ABL Facility) do not exceed $700.0 million;
provided that (i) no default or event of default shall have occurred and be
continuing or would result therefrom, (ii) the representations and warranties in
the ABL Facility shall be true and correct in all material respects (or in all
respects if qualified by materiality) prior to, and immediately after giving

 

 Exhibit C-2 

 

 

 

effect to, the incurrence of such Incremental ABL Facility, (iii) to the extent
requested by the ABL Administrative Agent, the ABL Administrative Agent shall
have received legal opinions and certain customary closing deliverables
consistent with those delivered on the Closing Date and (iv) any Incremental ABL
Facility shall be on terms and pursuant to documentation applicable to the ABL
Facility, except with respect to any customary commitment, arrangement, upfront
or similar fees that may be agreed to among the Borrowers and the lenders
providing such additional commitments.

 

The Borrower may, but shall not be required to, seek commitments in respect of
the Incremental ABL Facilities from existing ABL Lenders (each of which shall be
entitled to agree or decline to participate in its sole discretion) and
additional banks, financial institutions and other institutional lenders who
will become ABL Lenders in connection therewith (an “ABL Additional Lender”);
provided that the ABL Administrative Agent and the Issuing Banks shall have
consent rights (not to be unreasonably withheld) with respect to such ABL
Additional Lender, if such consent would be required under the heading
“Assignments and Participations” for an assignment of loans or commitments, as
applicable, to such ABL Additional Lender.

    Availability: Loans under the ABL Facility (exclusive of Letter of Credit
usage) may be made available on the Closing Date to (i) fund working capital,
(ii) to pay Acquisition Funds and (iii) 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, notwithstanding the foregoing,
the aggregate principal amount of borrowings under the ABL Facility (exclusive
of Letter of Credit usage, the Refinancings and amounts used 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) on the Closing Date to pay
the Acquisition Funds shall not exceed $150.0 million.  Additionally, Letters of
Credit may be issued on the Closing Date in order to backstop or replace letters
of credit outstanding on the Closing Date under the Existing ABL Facility or
under any other facilities no longer available to the Target and its
subsidiaries (and such existing letters of credit may be deemed Letters of
Credit outstanding under the ABL Facility).  Otherwise, subject to Availability
(as defined below), loans under the ABL Facility will be available at any time
prior to the final maturity of the ABL Facility, in minimum principal amounts to
be agreed upon.  Amounts repaid under the ABL Facility may be reborrowed.    
Maturity Date: 5 years from the Closing Date. The ABL Loan Documents shall
contain “amend and extend” provisions pursuant to which individual Lenders may
agree to extend the maturity date of their outstanding commitments (which may
include, among other things, an increase in the interest rates payable with
respect of the related loans and/or an increase in the undrawn fees payable with
respect to such commitments, with such extensions not subject to any “most
favored nation” pricing provisions upon the request of the Company and without
the consent of any other Lender (it is understood that (i) no existing Lender
will have any obligation to commit to any such extension and (ii) each Lender
under the class being extended

 

 Exhibit C-3 

 

 

  shall have the opportunity to participate in such extension on the same terms
and conditions as each other Lender under such class)); provided that (i) no
default or event of default shall have occurred and be continuing at the time of
any such extension or would result therefrom and (ii) the representations and
warranties in the ABL Facility shall be true and correct in all material
respects (or in all respects if qualified by materiality) prior to, and
immediately after giving effect to, any such extension.     Amortization: None.
    Interest Rates:

All amounts outstanding under the ABL Facility will bear interest, at the
Borrower’s option, at a rate per annum equal to:

 

(a)      the Base Rate plus the Applicable Margin per annum; or

 

(b)      the Adjusted LIBOR Rate plus the Applicable Margin per annum;

 

There shall be no LIBOR or ABR floors for the ABL Facility.

 

The Applicable Margin shall mean, (i) with respect to Base Rate Loans, 0.50% and
(ii) with respect to Adjusted LIBOR Rate Loans, 1.50%, which margins shall be
subject to one step-down of 0.25% and one step-up of 0.25% commencing at the
completion of the first full fiscal quarter completed after the Closing Date
based on average historical Excess Availability during the preceding quarter
greater than 662/3% and less than 331/3%, respectively; provided that, if at the
end of any four-fiscal quarter test period, the Company’s Total Net Leverage
Ratio for such period is no greater than 2.00 to 1.00, then the Applicable
Margin referred to above, and each step-up and step-down percentage, shall be
reduced by 0.125% (the “ABL Facility Margin Step-Down”)

 

“Base Rate” and “Adjusted LIBOR Rate” shall be defined using the ABL
Administrative Agent’s customary definitions for transactions of this kind.

    Commitment Fee Rate: 0.25% per annum on the undrawn portion of the ABL
Commitments, payable to non-defaulting Lenders quarterly in arrears after the
Closing Date and upon the termination of the ABL Commitments, calculated based
on the number of days elapsed in a 360-day year.

 

 Exhibit C-4 

 

 

Letter of Credit Fees: A per annum fee equal to the spread over the Adjusted
LIBOR Rate under the ABL Facility will accrue for the account of Lenders (other
than defaulting Lenders) on the aggregate face amount of outstanding standby
Letters of Credit, payable in arrears at the end of each quarter and upon the
termination of the ABL Facility, in each case for the actual number of days
elapsed over a 360-day year.  A per annum fee equal to 50% of the Applicable
Margin for Adjusted LIBOR Rate loans under the ABL Facility will accrue for the
account of Lenders (other than defaulting Lenders) on the aggregate face amount
of outstanding commercial Letters of Credit, payable in arrears at the end of
each quarter and upon the termination of the ABL Facility, in each case for the
actual number of days elapsed over a 360-day year. Such fees shall be
distributed to such Lenders pro rata in accordance with the amount of each such
Lender’s ABL Commitment.  In addition, the Borrowers shall pay to the relevant
Issuing Lender, for its own account, (a) a fronting fee equal to 0.125% of the
aggregate face amount of outstanding Letters of Credit or such other amount as
may be agreed by the Company and such Issuing Lender, payable in arrears at the
end of each quarter and upon the termination of the ABL Facility, calculated
based upon the actual number of days elapsed over a 360-day year, and
(b) customary issuance and administration fees.     Default Interest: Upon and
during the continuance of any payment or bankruptcy event of default, and solely
with respect to any overdue amounts, the applicable interest rate plus 2.00% per
annum.     Borrowing Base:

The borrowing base (the “Borrowing Base”) at any time shall equal the sum of:

 

(i) 90% of book value of eligible credit card receivables of the Borrowers,

 

(ii) 85% of book value eligible accounts receivable of the Borrowers,

 

(iii) the lesser of (a) 70% of cost (FIFO basis) of eligible wholesale
inventory, and (b) 85% of the net orderly liquidation value of eligible
wholesale inventory of the Borrowers,

 

(iv) 90% of the net orderly liquidation value of eligible retail inventory of
the Borrowers (increased to 92.5% during a 4-month period each year); and

 

(v) 100% of the Borrowers’ unrestricted cash and cash equivalents (to the extent
held in accounts maintained at JPMorgan or its affiliates and subject to the
control of, the ABL Administrative Agent or subject to customary control
agreements in favor of the ABL Administrative Agent), less

 

(vi) customary reserves including royalty and dilution reserves and reserves for
inventory held in leased locations or bailees without a landlord waiver, bailee
letter or other collateral access agreement and other reserves consistent with
the Existing ABL Facility.

 

Eligibility criteria for eligible wholesale inventory, eligible retail
inventory, eligible accounts receivable and eligible credit card receivables
shall be set

 

 Exhibit C-5 

 

 

 

forth in the ABL Loan Documents in a manner consistent with the Documentation
Considerations, subject to the inclusion in the calculation of eligible
wholesale inventory of eligible in-transit inventory in amount not to exceed 15%
to the Borrowing Base.

 

The Borrowing Base will be computed by the Company monthly (or more frequently
as the Company may elect; provided that if such election is exercised, it must
be continued until the date that is 60 days after the date of such election),
and a certificate (the “Borrowing Base Certificate”) presenting the Company’s
computation of the Borrowing Base will be delivered to the ABL Administrative
Agent promptly, but in no event later than the 20th day following the end of
each calendar month; provided, however, that, during any Cash Dominion Period,
the Company will be required to compute the Borrowing Base and deliver a
Borrowing Base Certificate on a weekly basis.

 

The ABL Administrative Agent will have the right to establish and modify
reserves against the Borrowing Base assets in its Permitted Discretion with
prior written notice to the Borrowers. For purposes of the foregoing, “Permitted
Discretion” shall have a meaning substantially consistent with that set forth in
the Existing ABL Facility.

 

The amount of any reserve established or modified by the ABL Administrative
Agent shall have a reasonable relationship to circumstances, conditions, events
or contingencies which are the basis for such reserve, without duplication, as
determined by the ABL Administrative Agent in its Permitted Discretion.

 

The Borrowing Base shall not include any amounts attributable to the inventory
and receivables of the Target and its subsidiaries until such time as a field
examination and inventory appraisal with respect thereto have been completed.

    Cash Management and Cash Dominion: The Loan Parties shall use commercially
reasonable efforts to obtain and/or maintain account control agreements on the
concentration accounts (“DDAs”) where the proceeds of sales of ABL Priority
Collateral of the Loan Parties (including those of the Target and its
subsidiaries that are to become Loan Parties under the ABL Facility) are
deposited.  The Loan Parties shall use commercially reasonable efforts to obtain
and/or maintain account control agreements on all other deposit accounts (but in
any event excluding accounts that are (i) solely used for the purposes of making
payments in respect of payroll, workers’ compensation, pension benefits, taxes
and employees’ salaries and wages and benefits and similar expenses, (ii)
accounts where solely non-ABL Priority Collateral deposited, (iii) any zero
balance payables accounts and (iv) other accounts with funds on deposit
averaging less than an amount to be agreed (collectively, “Excluded Accounts”)
as soon as possible and in any event within 60 days after the Closing Date (or
such later date as the ABL Administrative Agent shall reasonably agree)). If
such arrangements are not obtained within 60 days after the Closing Date (or
such later date as the ABL Administrative Agent shall reasonably agree), the
Loan Parties shall be required to move their bank

 

 Exhibit C-6 

 

 

 

accounts to the ABL Administrative Agent or another bank that will provide such
control agreements.  During a Cash Dominion Period (as defined below), all
amounts in controlled DDAs will be swept into a collection account (or accounts)
maintained with the ABL Administrative Agent and used to repay borrowings under
the ABL Facility, subject to customary exceptions, limitations and thresholds to
be agreed. It is understood that accounts exclusively holding the proceeds of
any indebtedness, including the proceeds of the loans under the ABL Facility,
shall not be swept during any Cash Dominion Period.

 

“Cash Dominion Period” means (a) the period from the date that Excess
Availability shall have been less than the greater of (x) 12.5% of the Maximum
Borrowing Amount and (y) $52.5 million for five consecutive business days to the
date Excess Availability shall have been at least the greater of (i) 12.5% of
the Maximum Borrowing Amount and (ii) $52.5 million for five consecutive
calendar days (a “Liquidity Condition”) or (b) upon the occurrence of an Event
of Default and shall continue until the date on which, as applicable, in the
case of clause (b), such Event of Default is cured or waived or no longer
continuing, or in the case of clause (a), Excess Availability under the ABL
Facility has been at least the greater of (i) $52.5 million and (ii) 12.5% of
the Maximum Borrowing Amount for at least 30 consecutive calendar days.
Notwithstanding the foregoing, if at any time four separate Cash Dominion
Periods shall have commenced and ended, then, any subsequent Cash Dominion
Period shall be permanently in effect for the remainder of the term of the ABL
Facility.

 

“Maximum Borrowing Amount” shall mean, at any time, an amount equal to the
lesser of (i) the ABL Commitments and (ii) the Borrowing Base.

 

“Availability” shall mean, at any time, the remainder of (a) the Maximum
Borrowing Amount at such time over (b) the sum of (i) aggregate principal amount
of all loans outstanding under the ABL Facility and (ii) all amounts outstanding
under Letters of Credit (including issued and undrawn Letters of Credit) at such
time.

 

“Excess Availability” shall mean, at any time, the remainder of (a) the sum of
(i) Maximum Borrowing Amount at such time and (ii) for purposes of calculating
Excess Availability for determining whether additional appraisals or field exams
are required, whether the Company shall be required to deliver monthly financial
statements or weekly Borrowing Base certificates and in the Payment Conditions,
the lesser of (x) Suppressed Availability (as defined below) and (y) an amount
equal to 5.0% of the Maximum Borrowing Amount over (b) the sum of (i) aggregate
principal amount of all loans outstanding under the ABL Facility and (ii) all
amounts outstanding under Letters of Credit (including issued and undrawn
Letters of Credit) at such time.

 

“Suppressed Availability” shall mean the excess (if any) of (i) the Borrowing
Base over (ii) the ABL Commitments.

 

 Exhibit C-7 

 

 

Voluntary Prepayments and Reductions in Commitments: Voluntary reductions of the
unutilized portion of the ABL Commitments and prepayments of borrowings under
the ABL Facility will be permitted at any time, in minimum principal amounts to
be agreed upon, without premium or penalty, subject to reimbursement of the
Lenders’ “breakage costs” incurred in the case of a prepayment of Adjusted LIBOR
Rate borrowings other than on the last day of the relevant interest period.    
Mandatory Prepayments: If at any time, the aggregate amount of outstanding
loans, unreimbursed Letter of Credit drawings and undrawn letters of credit
under the ABL Facility exceeds the Maximum Borrowing Amount, then the Borrowers
will repay outstanding loans and cash collateralize outstanding letters of
credit in an aggregate amount equal to such excess, with no reduction of the ABL
Commitments.     Collateral and Intercreditor Matters: As described under each
the sections entitled “Collateral” and  “Intercreditor Matters” in Exhibit B to
the Commitment Letter.  It is understood, that, except as described under the
first paragraph of the section entitled “Cash Management/Cash Dominion” above,
control agreements shall not be required with respect to any deposit accounts or
securities accounts or commodities accounts, and in the case of securities
accounts and commodities accounts with average amounts therein less than an
amount to be agreed.     Loan Documents: The definitive credit documentation for
ABL Facility (the “ABL Loan Documents” and, together with the Term Loan
Documents, the “Loan Documents”) shall contain the terms set forth in this
Exhibit C and, to the extent any other terms are not expressly set forth in this
Exhibit C, will (i) be negotiated in good faith within a reasonable time period
to be determined based on the expected Closing Date and taking into account the
timing of the syndication of the ABL Facility and the pre-closing requirements
of the Acquisition Agreement and, if applicable, (ii) contain such other terms
as the Borrower and the ABL Facility Arrangers shall reasonably agree; it being
understood and agreed that the ABL Loan Documents shall be consistent with the
Existing ABL Facility and the related security, pledge, collateral and guarantee
agreements executed and/or delivered in connection therewith; and as such
documentation shall be further modified by the terms set forth herein and
subject to (i) materiality qualifications and other exceptions that give effect
to and/or permit the Transactions, (ii) baskets, thresholds and exceptions that
are to be agreed in light of the Consolidated EBITDA, total assets and leverage
level of the Company and its subsidiaries, after giving effect to the
Transactions, (iii) modifications to the eligibility criteria and reserves in
light of the addition of assets of the Target and/or any of its subsidiaries in
the Borrowing Base, (iv) such other modifications to reflect the operational and
strategic requirements of the Restricted Group (after giving effect to the
Transactions) in light of its increased size and geographic locations and (v)
modifications to reflect changes in law or accounting standards since the date
of the Existing ABL Facility (collectively, the “Documentation Considerations”).
    Unrestricted Subsidiaries: As described under the section entitled
“Unrestricted Subsidiaries” in Exhibit B to the Commitment Letter, with (i)
corresponding changes to

 

 Exhibit C-8 

 

 

  reference the ABL Facility, (ii) a requirement to deliver an updated Borrowing
Base Certificate if the designation of any “restricted subsidiaries” as
“unrestricted subsidiaries” since the last delivery of a Borrowing Base
Certificate results (on a pro forma basis) in a reduction of the Borrowing Base
by the lesser of 5% or more of the Borrowing Base and $25.0 million and (iii) a
requirement to satisfy the Payment Conditions at the time of such designation.  
  Representations and Warranties: Limited to the representations and warranties
(to be applicable to the Company and its restricted subsidiaries only) expressly
set forth in Exhibit B, with corresponding changes to reference the ABL
Facility.     Affirmative Covenants:

Limited to the covenants expressly set forth in Exhibit B under “Affirmative
Covenants” (to be applicable to the Company and its restricted subsidiaries
only) with corresponding changes to reference the ABL Facility and to add
requirements (i) to deliver consolidating financial statements, (ii) to deliver
the Borrowing Base Certificates, (iii) to provide other collateral-related
reporting consistent with the Existing ABL Facility, (iv) referenced in the
first paragraph under “Cash Management/Cash Dominion”, (v) to require the
delivery of monthly financial statements during any Cash Dominion Period and
(vi) to maintain the ABL Administrative Agent as its primary depositary bank.

 

In addition, the ABL Administrative Agent may conduct up to one (1) inventory
appraisal (at the expense of the Borrowers) during any calendar year; provided
that (X) at any time after the date on which Excess Availability has been less
than the greater of $60.0 million and 15% of the Maximum Borrowing Amount for
five consecutive business days, inventory appraisals may each be conducted (at
the expense of the Borrowers) two (2) times during such calendar year or (Y) at
any time during the continuation of any Event of Default, field examinations and
inventory appraisals, may be conducted (at the expense of the Borrowers) as
frequently as determined by the ABL Administrative Agent in its Permitted
Discretion; provided, further, that no such inventory appraisal shall be
required if inventory included in the Borrowing Base would not have had to be
relied upon for borrowings under the ABL Facility for the preceding twelve month
period.

 

In addition, the ABL Administrative Agent may conduct up to one (1) field
examination (at the expense of the Borrowers) during any calendar year; provided
that (X) at any time after the date on which Excess Availability has been less
than the greater of $60.0 million and 15% of the Maximum Borrowing Amount for
five consecutive business days, field examinations may each be conducted (at the
expense of the Borrowers) two (2) times during such calendar year or (Y) at any
time during the continuation of any Event of Default, field examinations, may be
conducted (at the expense of the Borrowers) as frequently as determined by the
ABL Administrative Agent in its Permitted Discretion; provided, further, that no
such field exam shall be required if, during the preceding twelve month period,
there are no borrowings under the ABL Facility (other than Letter of Credit
usage) and the Letter of Credit usage does not at any time exceed $45.0 million.

 

 Exhibit C-9 

 

 

  Notwithstanding the foregoing, for purposes of clarity, the initial inventory
appraisal and field examination for the Target and its subsidiaries and
inventory appraisals and field examination of any Borrower added after the
Closing Date shall not reduce the number of inventory appraisals and field
examinations otherwise permitted.     Negative Covenants: Limited to the
covenants expressly set forth in Exhibit B under “Negative Covenants” (to be
applicable to the Company and its restricted subsidiaries only) with only
corresponding changes to reference the ABL Facility; provided that the ABL
Facility shall not include, (i) the Free and Clear RP Basket and the Free and
Clear Investment/Prepayment Basket and (ii) the Available Amount Basket.  In
addition, if the disposition of assets under the Asset Sale Exception since the
delivery of the preceding Borrowing Base Certificate results (in a pro forma
basis) in a reduction of 10% or more of the Borrowing Base, the Company shall be
required to deliver an updated Borrowing Base Certificate to the ABL
Administrative Agent.     Payment Conditions:

The ABL Facility will permit unlimited (i) dividends, other payments in respect
of capital stock and other restricted payments, (ii) prepayments and voluntary
redemptions of Junior Debt and (iii) acquisitions and other investments so long
as, in each case, the Payment Conditions are satisfied at the time of such
dividend, prepayment, investment or incurrence.

 

“Payment Conditions” shall mean the following: (i) no Event of Default exists or
would arise after giving effect to the relevant transactions, (ii) pro forma
compliance for the four fiscal quarters most recently preceding such transaction
or payment for which financial statements are available with a Fixed Charge
Coverage Ratio of 1.10:1.00 and (iii) the Borrowers’ having Excess Availability
in excess of the greater of (x) 15% of the Maximum Borrowing Amount and (y)
$62.5 million on a pro forma basis immediately after giving effect to such
transaction and over 60 consecutive days immediately prior to such transaction,
also on a pro forma basis; provided however that the condition set forth in
clause (ii) shall not be applicable if the Borrowers have Excess Availability in
excess of the greater of (x) 22.5% of the Maximum Borrowing Amount and (y) $90.0
million (except for permitted acquisitions, investments and the incurrence of
indebtedness, which shall be (x) 20% of the Maximum Borrowing Amount and (y)
$80.0 million), in each case, on a pro forma basis immediately after giving
effect to such transaction and over the 360-day period immediately prior to such
transaction, also on a pro forma basis.

    ABL Financial Covenant: If Excess Availability shall be less than the
greater of (A) 10.0% of the Maximum Borrowing Amount or (B) $42.5 million (such
greater amount, the “ABL Financial Covenant Trigger”) and until Excess
Availability is greater than or equal to the ABL Covenant Trigger for 30
consecutive calendar days (such period, a “Compliance Period”) the Company shall
comply on a monthly basis with a minimum ratio (the “Fixed Charge Coverage
Ratio”) as defined in the Existing ABL Facility, (but (i) with Consolidated
EBITDA (as defined in Exhibit B) used for the numerator (instead of “EBITDAR”),
(ii) with the definition of “Fixed Charges” modified to exclude (A) prepayments
of indebtedness, (B) rent and common

 

 Exhibit C-10 

 

 

 

area maintenance payments under operating leases and (C) dividends,
distributions and other restricted payments (other than regularly scheduled cash
dividends paid by the Company (in accordance with the Company’s dividend policy,
as amended from time to time)), (iii) when determining whether the condition set
forth in clause (ii) in the definition of “Payment Conditions” above is
satisfied in connection with making restricted payments, the denominator of the
Fixed Charge Coverage Ratio shall also include on a pro forma basis, without
duplication, the actual amount of restricted payments actually being made at
such time and the actual amount of restricted payments made during the relevant
four quarter test period and (iv) calculated on a consolidated basis in
accordance with GAAP) and tested (i) immediately upon the trigger based on the
most recently completed fiscal month for which financial statements have been
delivered and (ii) on the last day of each subsequently completed fiscal month
of the Company ending during a Compliance Period for which financial statements
have been delivered. Notwithstanding the foregoing, for incurrence based tests
when no Cash Dominion Period is in effect, compliance with the Fixed Charge
Coverage Ratio shall be determined on a quarterly basis.

 

For purposes of determining compliance with the ABL Financial Covenant, any cash
equity contribution (which shall be common equity or otherwise in a form
reasonably acceptable to the ABL Administrative Agent) made to the Company after
the last day of the relevant fiscal quarter and on or prior to the day that is
10 business days after the day on which financial statements are required to be
delivered for such fiscal quarter will, at the request of the Company, be
included in the calculation of Consolidated EBITDA solely for the purposes of
determining compliance with such ABL Financial Covenant at the end of such
fiscal quarter and applicable subsequent periods which include such fiscal
quarter (any such equity contribution so included in the calculation of
Consolidated EBITDA, a “Specified Equity Contribution”); provided that, (a)
there shall be no more than two quarters in each four consecutive fiscal quarter
period in respect of which a Specified Equity Contribution is made, (b) the
amount of any Specified Equity Contribution shall be no more than the amount
expected to be required to cause the Company to be in pro forma compliance with
the ABL Financial Covenant specified above, (c) no more than five Specified
Equity Contributions shall be made during the term of the ABL Facility, (d) all
Specified Equity Contributions shall be disregarded for purposes of any
financial ratio determination under the ABL Loan Documents other than for
determining compliance with the ABL Financial Covenant and (e) there shall be no
pro forma or other reduction in indebtedness with the proceeds of any Specified
Equity Contribution for determining compliance with the ABL Financial Covenant.

    Events of Default: Consisting of the following (each, an “Event of
Default”): nonpayment of principal when due; nonpayment of interest, fees or
other amounts after five (5) business days; material inaccuracy of
representations and warranties when made or deemed made; violation of other
covenants (subject in the case of all affirmative covenants, other than (i)
notices of default, maintenance of existence of the Company or any Borrower and
use of proceeds (each of which will result in an immediate event of default);
(ii)

 

 Exhibit C-11 

 

 

  failure to comply with cash management provisions for a period of more than 5
consecutive business days; (iii) failure to deliver a Borrowing Base Certificate
after 5 business days (or 2 business days in the case of a weekly Borrowing Base
Certificate); (iv) notices of all other material events (which shall be subject
to a grace period of five (5) days) and (v) failure to comply with collateral
requirement provisions (which shall be subject to a grace period of fifteen (15)
days), to a grace period of thirty (30) days; cross default and cross
acceleration to other material debt; bankruptcy, insolvency and/or other similar
related events of any material Loan Party or other material restricted
subsidiary thereof; material monetary judgments; ERISA events; actual or
asserted invalidity or rescission by a Loan Party of an ABL Facility Document
(including the intercreditor agreement refereed to under the heading “Collateral
and Intercreditor Matters”) or any material guarantees or security documents;
failure to deliver the QoE Reports prior to the Closing Date, subject to a grace
period of thirty (30) days (which Event of Default shall be waivable by the
Arrangers in their sole discretion (without the consent of any Lenders)) and
change of control. While the accuracy of any representation and warranty other
than as set forth in Exhibit D is not a condition precedent to the availability
of the ABL Facility on the Closing Date, all other representations and
warranties shall be made on the Closing Date (subject to “Clean-up Period”
provisions (not to exceed 60 days after the Closing Date) for defaults which are
subject to cure).     Conditions Precedent to Effectiveness and Borrowing under
ABL Facility on Closing Date only: The several obligations of the Lenders to
make, or cause one of their respective affiliates to make, loans under the ABL
Facility on the Closing Date will be subject to only the following conditions:
(i) prior written notice of borrowing and (ii) the conditions set forth or
referred to in Section 2 of this Commitment Letter (including those specified in
Exhibit D thereto).     Assignments and Participations:

The Lenders will be permitted to assign loans and ABL Commitments with the
consent of (i) the Company (not to be unreasonably withheld or delayed) (unless
a payment or bankruptcy event of default has occurred and is continuing) and
(ii) the ABL Administrative Agent and the Issuing Lenders (in each case not to
be unreasonably withheld or delayed). Each assignment (except to other Lenders
or their affiliates or approved funds) will be in a minimum amount of $5.0
million. The ABL Administrative Agent will receive a processing and recordation
fee of $3,500, payable by the assignor and/or the assignee, with each
assignment.

 

The Lenders will be permitted to participate loans and ABL Commitments without
restriction. Voting rights of participants shall be limited to matters in
respect of (a) increases in commitments, (b) reductions of principal, interest,
premium or fees, (c) extensions of final maturity or the due date of any
interest, premium or fee payment and (d) releases of all or substantially all of
the Collateral or all or substantially all of the value of the Guarantees.

 

No assignments or participations may be made to Disqualified Lenders. The ABL
Administrative Agent shall have the right to (a) post the list of Disqualified
Lenders provided by the Company and any updates thereto from time to time
(collectively, the “DQ List”) on IntraLinks, SyndTrak

 

 Exhibit C-12 

 

 

  Online or similar electronic means (the “Platform”), including that portion of
the Platform that is designated for “public side” Lenders and/or (b) provide the
DQ List to each Lender requesting the same. The ABL Administrative Agent shall
not be responsible or have any liability for, or have any duty to ascertain,
inquire into, monitor or enforce, compliance with the provisions of the ABL Loan
Documents relating to Disqualified Lenders.     Voting:

Amendments and waivers of the ABL Loan Documents will require the approval of
Lenders (the "Required Lenders") holding more than 50.0% of the aggregate amount
of ABL Commitments (or, if the ABL Commitments have been terminated, outstanding
loans under the ABL Facility) under the ABL Loan Documents, except that: (a) the
consent of each Lender directly and adversely affected thereby shall be required
with respect to (i) increases in or extensions of commitments of such Lender,
(ii) reductions of principal, interest (other than default interest), premium or
fees and (iii) reductions in the amount of or extensions of final maturity or
the due date of any interest, premium or fee payment; (b) the consent of 100% of
the Lenders will be required with respect to (i) modifications to any of the
voting percentages applicable thereto, (ii) changes to the waterfall or pro rata
sharing provisions in a manner that would alter the manner in which payments are
shared and (iii) releases of liens on all or substantially all of the Collateral
or all or substantially all of the value of the Guarantees (other than in
connection with any sale of Collateral or of the relevant Guarantor permitted by
the Loan Documents); and (c) the consent of the ABL Administrative Agent and
Issuing Lenders will be required to amend, modify or otherwise affect the rights
and duties of the ABL Administrative Agent or the Issuing Lenders, as
applicable. In addition, the consent of a supermajority (66.7%) of the aggregate
amount of ABL Commitments (or, if the ABL Commitments have been terminated,
outstanding loans under the ABL Facility) shall be required for increases in
advance rates under the definition of Borrowing Base (provided that the
foregoing shall not impair the ability of the ABL Administrative Agent to add,
remove, reduce or increase reserves against the Borrowing Base assets in its
Permitted Discretion) and the consent of a supermajority (66.7%) of the
aggregate amount of ABL Commitments (or, if the ABL Commitments have been
terminated, outstanding loans under the ABL Facility) shall be required for any
changes to the Borrowing Base definition or the component definitions thereof
which result in increased borrowing availability.

 

The ABL Loan Documents shall contain customary provisions for replacing (i)
non-consenting Lenders in connection with amendments and waivers requiring the
consent of all relevant Lenders or of all relevant Lenders directly affected
thereby so long as relevant Lenders holding at least 50% (or, the relevant
required percentage) of the aggregate amount of ABL Commitments have consented
thereto and (ii) defaulting Lenders. The ABL Facility shall also contain usual
and customary provisions regarding defaulting lenders to be based on the ABL
Administrative Agent’s customary form.

 

In addition, if the ABL Administrative Agent and the Company shall have jointly
identified an obvious error or any error or omission of a technical

 

 Exhibit C-13 

 

 

  nature in the ABL Loan Documents, then the ABL Administrative Agent and the
Company shall be permitted to amend such provision without any further action or
consent of any other party if the same is not objected to in writing by the
Required Lenders to the ABL Administrative Agent within five (5) business days
following receipt of notice thereof.     Yield Protection and Increased Costs:
The ABL Loan Documents will include customary tax gross-up, cost and yield
protection provisions substantially consistent with those set forth in the Term
Loan Documents.     Indemnity and Expenses: The ABL Loan Documents will include
customary expense reimbursement and indemnification provisions substantially
consistent with those set forth in the Term Loan Documents; provided that, in
connection with the Closing Date and only to the extent that the Closing Date
occurs, one appraisal and one field examination shall be included within the
scope of this paragraph and thereafter, expense reimbursements with respect to
field examinations and inventory appraisals shall be limited as described in the
section entitled “Affirmative Covenants” above in this Exhibit C.     Bail-In
Provisions: The ABL Loan Documents shall contain the ABL Administrative Agent’s
customary provisions in respect of European Union “Bail-In” matters (but no
representation) to be based on the ABL Administrative Agent’s customary form.  
  Governing Law and Forum: New York.     Counsel to ABL Administrative Agent and
ABL Arrangers: Latham & Watkins LLP.

 

 Exhibit C-14 

 

 

Exhibit D

 

Project Brand II
Summary of Conditions Precedent to the Facilities1

 

The availability of the Facilities is subject to the following conditions
precedent:

 

1.Concurrent Transactions: The Acquisition shall have been consummated or will
be consummated substantially concurrently with the initial funding under the
Facilities in accordance with the Acquisition Agreement, after giving effect to
any amendments, modifications or waivers thereto; provided that no such
amendment, modification or waiver by you (or your affiliates) of any term
thereof that is materially adverse to any interest of the Commitment Parties or
the Lenders (it being understood that any amendment, modification or waiver by
you (or your affiliates) that results in a decrease of up to 10% of the Cash
Consideration (as defined in the Acquisition Agreement) shall not be deemed to
be materially adverse to any interest of the Commitment Parties or the Lenders
so long as the Term Facility is reduced by the amount of any such decrease in
the Cash Consideration), will be made or granted, as the case may be, without
the prior written consent of the Commitment Parties.

 

2.Historical Financial Statements. The Arrangers shall have received (i) audited
consolidated financial statements of the Company and its consolidated
subsidiaries consisting of audited consolidated balance sheets as of January 31,
2015 and January 31, 2016 and audited consolidated income statements and
statements of stockholders’ equity and cash flows for each of the fiscal years
of the Company ended January 31, 2014, January 31, 2015 and January 31, 2016,
(ii) audited consolidated financial statements of the Target and its
subsidiaries consisting of audited consolidated balance sheets as of December
31, 2014 and December 31, 2015 and audited consolidated statements of operations
and comprehensive income (loss), statements cash flows and statements of
stockholders’ equity for each of the fiscal years of the Target and its
subsidiaries ended December 31, 2013, December 31, 2014 and December 31, 2015,
(iii) unaudited interim consolidated financial statements of the Company and its
consolidated subsidiaries consisting of (A) an unaudited interim consolidated
balance sheet of the Company and its consolidated subsidiaries as of the last
day of the most recent fiscal quarter (other than the fourth fiscal quarter of
any fiscal year) of the Company and its consolidated subsidiaries that has been
completed prior to the Closing Date that has ended at least 45 days before the
Closing Date and (B) an unaudited interim consolidated income statement,
statement of cash flows and statement of stockholder’s equity of the Company and
its consolidated subsidiaries for the most recent six or nine month, as
applicable, fiscal period (other than the fourth fiscal quarter of any fiscal
year) of the Company and its consolidated subsidiaries that has been completed
prior to the Closing Date and that has ended at least 45 days before the Closing
Date and (iv) unaudited interim consolidated financial statements of the Target
and its subsidiaries consisting of (A) an unaudited interim consolidated balance
sheet of the Target and its subsidiaries as of the last day of the most recent
fiscal quarter (other than the fourth fiscal quarter of any fiscal year) of the
Target and its subsidiaries that has been completed prior to the Closing Date
and that has ended at least 45 days before the Closing Date and (B) an unaudited
interim consolidated statement of operations and comprehensive income (loss),
statement of cash flows and statement of stockholders’ equity of the Target and
its subsidiaries for the most recent six or nine month, as

 

 

1Capitalized terms used in this Exhibit D shall have the meanings set forth in
the other Exhibits attached to the Commitment Letter to which this Exhibit D is
attached (the “Commitment Letter”). In the case of any such capitalized term
that is subject to multiple and differing definitions, the appropriate meaning
thereof in this Exhibit D shall be determined by reference to the context in
which it is used.

 

 Exhibit D-1 

 

 

applicable, fiscal period (other than the fourth fiscal quarter of any fiscal
year) of the Target and its subsidiaries that has been completed prior to the
Closing Date and that has ended at least 45 days before the Closing Date. The
Arrangers hereby acknowledge receipt of the audited consolidated financial
statements referred to in clause (i) above for the fiscal years ended January
31, 2014, January 31, 2015 and January 31, 2016.

 

3.Pro Forma Financial Statements. The Arrangers shall have received a pro forma
consolidated balance sheet and related pro forma consolidated statement of
income of the Company as of, and for the twelve-month period ending on, the last
day of the most recently completed four-fiscal quarter period for which
financial information pursuant to paragraph 2(i) and (iii) above has been
delivered, prepared after giving effect to the Transactions as if the
Transactions had occurred as of such date (in the case of such balance sheet) or
at the beginning of such period (in the case of such income statements), which
need not be prepared in compliance with Regulation S-X of the Securities Act of
1933, as amended, or include adjustments for purchase accounting (including
adjustments of the type contemplated by Financial Accounting Standards Board
Accounting Standards Codification 805, Business Combinations (formerly SFAS
141R)).

 

4.Payment of Fees and Expenses. The Company shall have paid, or will
substantially simultaneously with the initial borrowing under the Facilities
pay, all fees and reasonable expenses (including, without limitation, legal fees
and expenses) of the Arrangers, the Administrative Agents and the Lenders as and
to the extent (a) required pursuant to the terms of this Commitment Letter and
the Fee Letter relating to the Facilities and (b) invoiced to the Company at
least two business days prior to the Closing Date (which amounts may be offset
against the proceeds of the Facilities).

 

5.Definitive Documents; Customary Closing Conditions. Subject in all respects to
the Limited Conditionality Provisions, (a) with respect to the Term Facility (i)
the Term Loan Documents (as defined in Exhibit B and including guarantees,
security agreements and other related definitive documents), which shall be in
accordance with the terms set forth in this Commitment Letter, Exhibit B (as
modified to reflect any exercise of the “Market Flex Provisions” under the Fee
Letter) and the Documentation Considerations (as defined in Exhibit B) shall
have been executed and delivered by the Borrowers and each Guarantor and (ii)
the Company shall have delivered the following other customary closing
deliverables with respect to the Borrower and the Guarantors: (A) customary
officer’s closing and secretary certificates, legal opinions (in each relevant
jurisdiction), corporate authority or organizational documents, good standing
certificates in jurisdictions of formation/organization, and officer’s
certificates evidencing authority and (B) a solvency certificate, dated as of
the Closing Date and after giving effect to the Transactions, substantially in
the form of Annex I attached to this Exhibit D, of the chief financial officer
of the Company;

 

(b) with respect to the ABL Facility (i) the ABL Loan Documents (as defined in
Exhibit C and including guarantees, security agreements and other related
definitive documents), which shall be in accordance with the terms set forth in
this Commitment Letter, Exhibit C and the Documentation Considerations (as
defined in Exhibit C) shall have been executed and delivered by the Borrowers
and each Guarantor and (ii) the Company shall have delivered the following other
customary closing and secretary deliverables with respect to the Borrowers and
the Guarantors: (A) customary officer’s closing certificates, legal opinions (in
each relevant jurisdiction), corporate authority or organizational documents,
good standing certificates in jurisdictions of formation/organization, and
officer’s certificates evidencing authority, (B) the Initial Borrowing Base
Certificate and (C) a solvency certificate, dated as of the Closing Date and

 

 Exhibit D-2 

 

 

after giving effect to the Transactions, substantially in the form of Annex I
attached to this Exhibit D, of the chief financial officer of the Company;

 

6.Refinancings. The Refinancings shall have been consummated, or substantially
simultaneously with the initial borrowing under the Facilities, shall be
consummated.

 

7.Liens. Subject in all respects to the Limited Conditionality Provisions, (a)
with respect to the Term Facility, all documents and instruments required to
create and perfect the Term Administrative Agent’s security interest in the
Collateral (as defined in Exhibit B) shall have been executed and delivered and,
if applicable, be in proper form for filing and (b) with respect to the ABL
Facility, all documents and instruments required to create and perfect the ABL
Administrative Agent’s security interest in the Collateral shall have been
executed and delivered and, if applicable, be in proper form for filing.

 

8.Patriot Act. Each Commitment Party shall have received, at least three
business days prior to the Closing Date, all documentation and other information
about the Loan Parties that the Commitment Parties have reasonably determined is
required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including the Patriot Act, and
that was reasonably requested from the Company in writing at least 10 business
days prior to the Closing Date.

 

9.Representations and Warranties. The Acquisition Agreement Representations
shall be true and correct, but only to the extent that the Company or its
subsidiaries have the right (taking into account any applicable cure periods) to
terminate its or their obligations under the Acquisition Agreement or decline to
consummate the transactions thereunder as a result of the failure of such
representations to be true and correct and the Specified Representations shall
be true and correct in all material respects (provided that Specified
Representations already qualified by materiality or material adverse effect
shall be true and correct in all respects) on the Closing Date, except to the
extent that any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be true and
correct on and as of such earlier date.

 

10.Closing Date. The Closing Date shall occur no earlier than September 30,
2016.

 

 Exhibit D-3 

 

 

Annex I to Exhibit D

 

Form of Solvency Certificate

 

To the Administrative Agent and each of the Lenders party to the Credit
Agreement referred to below:

 

I, the undersigned, the Chief Financial Officer of [Borrower], a [           ]
(the “Borrower”), in that capacity only and not in my individual capacity (and
without personal liability), do hereby certify as of the date hereof, and based
upon facts and circumstances as they exist as of the date hereof (and
disclaiming any responsibility for changes in such fact and circumstances after
the date hereof), that:

 

1.           This certificate is furnished to the Administrative Agent and the
Lenders pursuant to Section [___] of the [Credit Agreement], dated as of____,
201[ ], among [____] (the “Credit Agreement”). Unless otherwise defined herein,
capitalized terms used in this certificate shall have the meanings set forth in
the Credit Agreement.

 

2.           For purposes of this certificate, the terms below shall have the
following definitions:

 

(a)“Fair Value”

 

The amount at which the assets (both tangible and intangible), in their
entirety, of the Borrower and its subsidiaries taken as a whole would change
hands between a willing buyer and a willing seller, within a commercially
reasonable period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act.

 

(b)“Present Fair Salable Value”

 

The amount that could be obtained by an independent willing seller from an
independent willing buyer if the assets (both tangible and intangible) of the
Borrower and its subsidiaries taken as a whole are sold on a going concern basis
with reasonable promptness in an arm’s-length transaction under present
conditions for the sale of comparable business enterprises insofar as such
conditions can be reasonably evaluated.

 

(c)“Stated Liabilities”

 

The recorded liabilities (including contingent liabilities that would be
recorded in accordance with GAAP) of the Borrower and its subsidiaries taken as
a whole, as of the date hereof after giving effect to the consummation of the
Transactions (including the execution and delivery of the Credit Agreement, the
making of the loans under the Credit Agreement and the use of proceeds of such
loans on the date hereof), determined in accordance with GAAP consistently
applied.

 

(d)“Identified Contingent Liabilities”

 

The maximum estimated amount of liabilities reasonably likely to result from
pending litigation, asserted claims and assessments, guaranties, uninsured risks
and other contingent liabilities of the Borrower and its subsidiaries taken as a
whole after giving effect to the Transactions (including the execution and
delivery of the Credit Agreement, the making of the loans under the Credit
Agreement and the use of proceeds of such loans on the date hereof) (including
all fees and expenses related thereto but exclusive of such contingent
liabilities to the extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by responsible
officers of the Borrower.

 

 Exhibit D-I-1 

 

 

(e)“Can pay their Stated Liabilities and Identified Contingent Liabilities as
they mature”

 

Borrower and its subsidiaries taken as a whole after giving effect to the
Transactions (including the execution and delivery of the Credit Agreement, the
making of the loans under the Credit Agreement and the use of proceeds of such
loans on the date hereof) have sufficient assets and cash flow to pay their
respective Stated Liabilities and Identified Contingent Liabilities as those
liabilities mature or (in the case of contingent liabilities) otherwise become
payable.

 

(f)“Do not have Unreasonably Small Capital”

 

Borrower and its subsidiaries taken as a whole after giving effect to the
Transactions (including the execution and delivery of the Credit Agreement, the
making of the loans under the Credit Agreement and the use of proceeds of such
loans on the date hereof) have sufficient capital to ensure that it is a going
concern.

 

3.           For purposes of this certificate, I, or officers of Borrower under
my direction and supervision, have performed the following procedures as of and
for the periods set forth below.

 

(a)I have reviewed the financial statements (including the pro forma financial
statements) referred to in Section [    ] of the Credit Agreement.

 

(b)I have knowledge of and have reviewed to my satisfaction the Credit
Agreement.

 

(c)As chief financial officer of Borrower, I am familiar with the financial
condition of Borrower and its subsidiaries.

 

4.           Based on and subject to the foregoing, I hereby certify on behalf
of Borrower that after giving effect to the consummation of the Transactions
(including the execution and delivery of the Credit Agreement, the making of the
loans under the Credit Agreement and the use of proceeds of such loans on the
date hereof), it is my opinion that (i) each of the Fair Value and the Present
Fair Salable Value of the assets of Borrower and its subsidiaries taken as a
whole exceed their Stated Liabilities and Identified Contingent Liabilities;
(ii) Borrower and its subsidiaries taken as a whole do not have Unreasonably
Small Capital; and (iii) Borrower and its subsidiaries taken as a whole can pay
their Stated Liabilities and Identified Contingent Liabilities as they mature.*
* *

 

 Exhibit D-I-2 

 

 

IN WITNESS WHEREOF, Borrower has caused this certificate to be executed on its
behalf by its Chief Financial Officer this [  ] day of 201[ ].

 

  [ ]           By:         Name:       Title: Chief Financial Officer  

 

 Exhibit D-I-3