Exhibit 10.3

Execution Version

FIRST AMENDMENT TO TERM LOAN CREDIT AGREEMENT

This FIRST AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Amendment”) is dated
as of July 8, 2019 and is entered into by and among PETIQ, LLC, an Idaho limited
liability company (the “Borrower”), the Guarantors party hereto, ARES CAPITAL
CORPORATION and each other Lender party hereto, the Departing Lender (as defined
below) and ARES CAPITAL CORPORATION, as the administrative agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement (as defined below) after giving effect to this Amendment.

RECITALS

WHEREAS, the Borrower, Ares Capital Corporation and the Lenders party thereto
and the Administrative Agent have entered into that certain Term Loan Credit
Agreement, dated as of January 17, 2018 (as amended, restated, amended and
restated, supplemented, or otherwise modified prior to the date hereof, the
“Credit Agreement”);

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement,
as set forth below and

WHEREAS, on the Amendment Effective Date, (a) the Lenders party hereto
(consisting of all Lenders) and the Administrative Agent are willing to agree to
the amendments requested by the Borrower, on the terms and conditions set forth
in this Amendment, and (b) East West Bank, as an existing Lender, shall cease to
be a party to the Credit Agreement as evidenced by its execution and delivery of
its signature page to this Amendment (the “Departing Lender”).

NOW, THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, the Borrower, the Guarantors party hereto, the Lenders party
hereto and the Administrative Agent hereby agree as follows:

SECTION I. AMENDMENTS

A. Subject to the satisfaction of the conditions set forth in Section II of this
Amendment, on the Amendment Effective Date (as defined below),

(1) the Credit Agreement will be amended to delete the stricken text (indicated
textually in the same manner as the following example: stricken text) and to add
the double-underlined text (indicated textually in the same manner as the
following example: double-underlined text) as set forth in the pages of Credit
Agreement attached as Exhibit A hereto;

(2) the schedules to the Credit Agreement will be amended and restated in their
entirety as set forth as Exhibit B hereto; and

(3) Exhibit D to the Credit Agreement will be amended and restated in its
entirety as set forth as Exhibit C hereto.

B. Except as otherwise provided herein, all exhibits to the Credit Agreement, in
the forms thereof in effect immediately prior to the Amendment Effective Date,
will be continued as the exhibits attached to the Amended and Restated Credit
Agreement (as defined below).

 

1

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C. Effective on the Amendment Effective Date, all “Loans” as defined in, and
outstanding under, the Credit Agreement of the Departing Lender shall be repaid
in full in cash (accompanied by any accrued and unpaid interest and fees
thereon) and all “Commitments” as defined in, and outstanding under, the Credit
Agreement of the Departing Lender shall be terminated and the Departing Lender
shall not be a Lender under the Amended and Restated Credit Agreement.

SECTION II. CONDITIONS TO EFFECTIVENESS

This Amendment shall become effective as of the date hereof only upon the
satisfaction or waiver of all of the conditions precedent (the date of
satisfaction or waiver of such conditions being referred to herein as the
“Amendment Effective Date”) set forth in Section 4.01 of the Amended and
Restated Credit Agreement.

SECTION III. REAFFIRMATION, ACKNOWLEDGMENT AND CONSENT

The Borrower hereby confirms its pledges, grants of security interests and other
obligations, as applicable, under and subject to the terms of each of the Loan
Documents to which it is party, and agrees that, notwithstanding the
effectiveness of this Amendment or any of the transactions contemplated hereby,
such pledges, grants of security interests and other obligations, and the terms
of each of the Loan Documents to which it is a party, as supplemented in
connection with this Amendment and the transactions contemplated hereby, are not
impaired or affected in any manner whatsoever and shall continue to be in full
force and effect and shall continue to secure all the Obligations.

Each Guarantor hereby acknowledges that it has reviewed the terms and provisions
of the Credit Agreement and this Amendment and consents to the amendments to the
Credit Agreement effected pursuant to this Amendment. Each Guarantor hereby
confirms its guarantees, pledges, grants of security interests and other
obligations under and subject to the terms of each of the Loan Documents to
which it is party, and agrees that, notwithstanding the effectiveness of this
Amendment or any of the transactions contemplated hereby, such guarantees,
pledges, grants of security interests and other obligations, and the terms of
each of the Loan Documents to which it is a party, as modified or supplemented
in connection with this Amendment and the transactions contemplated hereby, are
not impaired or affected in any manner whatsoever and shall continue to be in
full force and effect and shall continue to secure all the Obligations.

Each Guarantor acknowledges and agrees that each Loan Document to which it is a
party or otherwise bound shall continue in full force and effect and that all of
its obligations thereunder shall be valid and enforceable and shall not be
impaired or limited by the execution or effectiveness of this Amendment.

SECTION IV. MISCELLANEOUS

A. Reference to and Effect on the Credit Agreement and the other Loan Documents.

(i) On and after the Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the “Credit Agreement,” “thereunder,” “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Amended and Restated Credit Agreement.

(ii) Except as specifically amended by this Amendment, the Credit Agreement and
the other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

 

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B. Loan Document. This Amendment shall constitute a Loan Document under the
terms of the Amended and Restated Credit Agreement.

C. Non-Reliance on Administrative Agent. Each Lender acknowledges that it has
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Amendment. Each
Lender also acknowledges that it will, without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own credit
decisions in taking or not taking action under or based upon this Amendment, the
Amended and Restated Credit Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.

D. No Novation. By its execution of this Amendment, each of the parties hereto
acknowledges and agrees that the terms of this Amendment do not constitute a
novation, but, rather, an amendment of the terms of a pre-existing Indebtedness
and related agreement, as evidenced by the Amended and Restated Credit
Agreement.

E. Headings. Section and Subsection headings in this Amendment are included for
convenience of reference only and shall not affect the interpretation of this
Amendment.

F. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD OF CONFLICTS OF
LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW. The
provisions of Sections 10.04 and 10.14(b), (c), (d) and (e) of the Amended and
Restated Credit Agreement are incorporated by reference herein and made a part
hereof.

G. Counterparts. This Amendment may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Amendment by telecopy or other electronic imaging means shall be effective as
delivery of a manually executed counterpart of this Amendment.

H. Severability. If any provision of this Amendment is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Amendment shall not be affected or impacted thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.

[Signature pages follow]

 

3

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

 

Borrower: PETIQ, LLC, an Idaho limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer

[Signature Page to First Amendment]

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Guarantors: PETIQ HOLDINGS, LLC, a Delaware limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer TRUE SCIENCE
HOLDINGS, LLC, a Florida limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer TRURX LLC, an Idaho
limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer TRU PRODIGY, LLC, a
Texas limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer COMMUNITY VETERINARY
CLINICS, LLC, a Delaware limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer PET SERVICES
OPERATING, LLC, a Delaware limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer

[Signature Page to First Amendment]

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VIP PETCARE, LLC, a California limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer PAWSPLUS MANAGEMENT,
LLC, a Delaware limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer COMMUNITY CLINICS,
INC., a California corporation By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer HBH ENTERPRISES LLC,
a Utah limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer SERGEANT’S PET CARE
PRODUCTS, INC., a Michigan corporation By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer

 

[Signature Page to First Amendment]

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SPC TRADEMARKS, LLC, a Texas limited liability company By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer VELCERA, INC., a
Delaware corporation By:  

/s/ McCord Christensen

  Name: McCord Christensen   Title: Chief Executive Officer

 

[Signature Page to First Amendment]

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ARES CAPITAL CORPORATION, as Administrative Agent and a Lender By:  

/s/ Michael L. Smith

  Name: Michael L. Smith   Title: Authorized Signatory

 

[Signature Page to First Amendment]

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LENDERS: ARES CAPITAL CORPORATION By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory CADEX CREDIT FINANCING,
LLC By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory ARES JASPER FUND
HOLDINGS, LLC By: Ares Capital Management LLC, as servicer By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory ARES ND CSG HOLDINGS LLC
By: Ares Capital Management LLC, as servicer By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory ARES CREDIT STRATEGIES
INSURANCE DEDICATED FUND SERIES INTERESTS OF THE SALI MULTI-SERIES FUND, L.P.
By: Ares Management LLC, its investment subadvisor By: Ares Capital Management
LLC, as subadvisor By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title: Authorized Signatory

 

 

[Signature Page to First Amendment]

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ARES CSIDF HOLDINGS, LLC By: Ares Capital Management LLC, as servicer By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory GREAT AMERICAN LIFE
INSURANCE COMPANY By: Ares Capital Management LLC, its investment manager By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory GREAT AMERICAN INSURANCE
COMPANY By: Ares Capital Management LLC, its investment manager By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory BOWHEAD IMC LP By: Ares
Capital Management LLC, its investment manager By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

 

[Signature Page to First Amendment]

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AN CREDIT STRATEGIES FUND, L.P.

By: Ares Capital Management LLC, its investment manager

By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

IVY HILL MIDDLE MARKET CREDIT FUND XV, LTD.

By: Ivy Hill Asset Management, L.P., as Asset Manager

By:  

/s/ Shelly Cleary

Name:   Shelly Cleary Title:   Authorized Signatory

AC AMERICAN FIXED INCOME IV, L.P.

By: Ares Capital Management LLC, its investment manager

By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

FEDERAL INSURANCE COMPANY

By: Ares Capital Management LLC, its investment manager

By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

NATIONWIDE LIFE INSURANCE COMPANY

By: Ares Capital Management LLC, its investment manager

By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

 

[Signature Page to First Amendment]

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NATIONWIDE MUTUAL INSURANCE COMPANY

By: Ares Capital Management LLC, its investment manager

By:  

/s/ Michael L. Smith

Name:   Michael L. Smith Title:   Authorized Signatory

AO MIDDLE MARKET CREDIT L.P.

By: Ares Capital Management LLC, its investment manager

By:  

/s/ K. Patel

Name:   K. Patel Title:   Authorized Signatory By:  

/s/ Jeremy Ehrlich

Name:   J. Ehrlich Title:   Authorized Signatory

 

[Signature Page to First Amendment]

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The undersigned Departing Lender hereby acknowledges and agrees that, from and
after the Amendment Effective Date, it is no longer a party to the Credit
Agreement and will not be a party to the Amended and Restated Credit Agreement.
EAST WEST BANK, as Departing Lender By:  

/s/ David A. Lehner

Name:   David A. Lehner Title:   Senior Vice President

 

[Signature Page to First Amendment]

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Exhibit A

[See attached]

Exhibit A

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Execution Version

 

 

 

AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT

Dated as of July 8, 2019

among

PETIQ, LLC,

as Borrower,

ARES CAPITAL CORPORATION

and the other Lenders party hereto,

and

ARES CAPITAL CORPORATION

as Administrative Agent

 

 

 

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TABLE OF CONTENTS

 

         Page  

Article I. DEFINITIONS AND ACCOUNTING TERMS

     1  

Section 1.01

  Defined Terms      1  

Section 1.02

  Other Interpretive Provisions      51  

Section 1.03

  Accounting Terms      52  

Section 1.04

  Rounding      53  

Section 1.05

  Times of Day      53  

Section 1.06

  Divisions      53  

Article II. THE COMMITMENTS AND CREDIT EXTENSIONS

     53  

Section 2.01

  Loans      53  

Section 2.02

  Borrowings, Conversions and Continuations of Loans      54  

Section 2.03

  [Reserved]      55  

Section 2.04

  [Reserved]      55  

Section 2.05

  Prepayments; Repayments      55  

Section 2.06

  Termination or Reduction of Commitments      57  

Section 2.07

  Repayment of Loans      57  

Section 2.08

  Interest      58  

Section 2.09

  Fees      58  

Section 2.10

  Computation of Interest and Fees      58  

Section 2.11

  Evidence of Debt      59  

Section 2.12

  Payments Generally; Administrative Agent’s Clawback      59  

Section 2.13

  Sharing of Payments by Lenders      60  

Section 2.14

  Collateral and Guarantees      61  

Section 2.15

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      61  

Section 2.16

  Incremental Credit Extension      62  

Section 2.17

  Refinancing Amendments      65  

Section 2.18

  Loan Account      66  

Article III. TAXES, YIELD PROTECTION AND ILLEGALITY

     67  

Section 3.01

  Taxes      67  

Section 3.02

  Illegality      71  

Section 3.03

  Inability to Determine Rates      71  

Section 3.04

  Increased Costs      73  

Section 3.05

  Compensation for Losses      74  

Section 3.06

  Mitigation Obligations; Replacement of Lenders      74  

Section 3.07

  Survival      75  

Article IV. CONDITIONS PRECEDENT TO Credit Extensions

     75  

Section 4.01

  Conditions to the Closing Date      75  

Section 4.02

  Conditions to all Credit Extensions after the Closing Date      79  

Article V. REPRESENTATIONS AND WARRANTIES

     80  

 

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         Page  

Section 5.01

  Corporate Authority, Etc.      80  

Section 5.02

  Financial Statements; Projections      81  

Section 5.03

  Solvency      83  

Section 5.04

  No Material Adverse Change      83  

Section 5.05

  Ownership of Property; Liens      83  

Section 5.06

  Franchises, Patents, Copyrights, etc.      83  

Section 5.07

  Litigation      84  

Section 5.08

  No Default      84  

Section 5.09

  Compliance with Laws      84  

Section 5.10

  Tax Status      84  

Section 5.11

  Insurance      84  

Section 5.12

  Investment Company Acts      85  

Section 5.13

  ERISA Compliance      85  

Section 5.14

  Margin Regulations      85  

Section 5.15

  Use of Proceeds      86  

Section 5.16

  [Reserved]      86  

Section 5.17

  Subsidiaries, etc.      86  

Section 5.18

  Environmental Compliance      86  

Section 5.19

  [Reserved]      86  

Section 5.20

  Labor Contracts      86  

Section 5.21

  Disclosure      86  

Section 5.22

  Security Documents      87  

Section 5.23

  OFAC      87  

Section 5.24

  PATRIOT Act, Anti-Corruption Laws etc.      88  

Article VI. AFFIRMATIVE COVENANTS

     88  

Section 6.01

  Punctual Payment      88  

Section 6.02

  Maintenance of Office; Certain Changes      89  

Section 6.03

  Records and Accounts      89  

Section 6.04

  Financial Statements, Certificates and Information      89  

Section 6.05

  Notices      93  

Section 6.06

  Legal Existence; Maintenance of Properties      95  

Section 6.07

  Insurance      95  

Section 6.08

  Taxes      96  

Section 6.09

  Compliance with Laws, Contracts, Licenses, Permits; Leaseholds and Payment of
Obligations Generally      96  

Section 6.10

  [Reserved]      97  

Section 6.11

  Use of Proceeds      97  

Section 6.12

  Covenant to Guarantee Obligations and Give Security      98  

Section 6.13

  Certain Changes      100  

Section 6.14

  Conduct of Business      101  

Section 6.15

  Further Assurances      101  

Section 6.16

  Inspections, etc.      101  

Section 6.17

  Unrestricted Subsidiaries      102  

 

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         Page  

Section 6.18

  Fiscal Year      102  

Section 6.19

  Lien Waivers      102  

Section 6.20

  Post-Closing Obligations      103  

Article VII. NEGATIVE COVENANTS

     103  

Section 7.01

  Investments      103  

Section 7.02

  Restrictions on Indebtedness      104  

Section 7.03

  Restrictions on Liens and Negative Pledges      106  

Section 7.04

  Restricted Payments; Prepayments of Junior Indebtedness      108  

Section 7.05

  Merger, Consolidation and Disposition of Assets      110  

Section 7.06

  [Reserved]      112  

Section 7.07

  [Reserved]      112  

Section 7.08

  Transactions with Affiliates      112  

Section 7.09

  [Reserved]      112  

Section 7.10

  Change in Terms of Governing Documents      112  

Section 7.11

  [Reserved]      113  

Section 7.12

  [Reserved]      113  

Section 7.13

  Financial Maintenance Covenant      113  

Article VIII. EVENTS OF DEFAULT AND REMEDIES

     113  

Section 8.01

  Events of Default      113  

Section 8.02

  Remedies Upon Event of Default      115  

Section 8.03

  Application of Funds      116  

Article IX. ADMINISTRATIVE AGENT

     116  

Section 9.01

  Appointment and Authority      116  

Section 9.02

  Rights as a Lender      117  

Section 9.03

  Exculpatory Provisions      117  

Section 9.04

  Reliance by Agents      118  

Section 9.05

  Delegation of Duties      119  

Section 9.06

  Resignation of Agents      119  

Section 9.07

  Non-Reliance      120  

Section 9.08

  [Reserved]      120  

Section 9.09

  Administrative Agent May File Proofs of Claim      120  

Section 9.10

  Collateral and Guarantee Matters      121  

Section 9.11

  Disbursement and Collection Duties      121  

Section 9.12

  Secured Cash Management Agreements      121  

Article X. MISCELLANEOUS

     122  

Section 10.01

  Amendments, Etc.      122  

Section 10.02

  Notices; Effectiveness; Electronic Communication      124  

Section 10.03

  No Waiver; Cumulative Remedies      125  

 

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         Page  

Section 10.04

  Expenses; Indemnity; Damage Waiver      126  

Section 10.05

  Payments Set Aside      128  

Section 10.06

  Successors and Assigns      128  

Section 10.07

  Treatment of Certain Information; Confidentiality      132  

Section 10.08

  Right of Setoff      133  

Section 10.09

  Interest Rate Limitation      134  

Section 10.10

  Counterparts; Integration; Effectiveness      134  

Section 10.11

  Survival of Representations and Warranties      134  

Section 10.12

  Severability      135  

Section 10.13

  Replacement of Lenders      135  

Section 10.14

  Governing Law; Jurisdiction; Etc.      135  

Section 10.15

  USA PATRIOT Act Notice      137  

Section 10.16

  ENTIRE AGREEMENT      137  

Section 10.17

  Joint and Several      137  

Section 10.18

  Certain ERISA Matters      137  

Section 10.19

  No Advisory or Fiduciary Responsibility      138  

Section 10.20

  Acknowledgement Regarding Any Supported QFCs      139  

 

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Page

SCHEDULES

  

Schedule 2.01

   Commitments and Applicable Percentages

Schedule 5.07

   Litigation

Schedule 5.17

   Subsidiaries

Schedule 5.20

   Labor Contracts

Schedule 6.20

   Post-Closing Obligations

Schedule 7.01

   Existing Investments

Schedule 7.02

   Existing Indebtedness

Schedule 7.03

   Existing Liens

Schedule 7.08

   Transactions with Affiliates

Schedule 10.02

   Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

  

Exhibit A

   Form of Loan Advance Request

Exhibit B

   Form of Eurodollar Rate Loan Continuation Certificate

Exhibit C

   Form of Note

Exhibit D

   Form of Compliance Certificate

Exhibit E

   Form of Assignment and Assumption

Exhibit F

   [Reserved]

Exhibit G

   Form of Prepayment Notice

Exhibit H

   Form of U.S. Tax Compliance Certificates

Exhibit I

   Form of Secured Party Designation Notice

 

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AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT

This AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT (this “Agreement”) is
entered into as of July 8, 2019 among:

PETIQ, LLC, an Idaho limited liability company, as Borrower (as defined below);

ARES CAPITAL CORPORATION and each other Lender from time to time party hereto;
and

ARES CAPITAL CORPORATION, as Administrative Agent.

WHEREAS, the parties entered into the Existing Term Loan Credit Agreement on
January 17, 2018,

WHEREAS, the parties hereto desire to amend and restate the Existing Term Loan
Credit Agreement by entering into this Agreement, pursuant to which the Lenders
hereunder will provide the Borrower a term loan credit facility, the proceeds of
which the Borrower will use, together with the proceeds from borrowings of up to
$60,000,000 under the ABL Credit Agreement and cash on hand, (a) to finance the
Perrigo Acquisition, (b) to refinance the Existing Term Loans, (c) to pay
related fees and expenses and (d) for one or more of the other permitted
purposes provided for herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:

“2018 Contingent Note” means that certain 2018 Contingent Note, dated as of
January 17, 2018, among PetIQ, LLC, as issuer, and VIP Petcare Holdings, Inc.,
as holder, as may be amended, amended and restated or otherwise modified from
time to time in accordance with the terms thereof and the Seller Notes
Subordination Agreement.

“2019 Contingent Note” means that certain 2019 Contingent Note, dated as of
January 17, 2018, among PetIQ, LLC, as issuer, and VIP Petcare Holdings, Inc.,
as holder, as may be amended, amended and restated or otherwise modified from
time to time in accordance with the terms thereof and the Seller Notes
Subordination Agreement.

“ABL Consent Letter” means that certain consent letter, dated as of May 8, 2019,
from East West Bank, as administrative agent under the ABL Credit Agreement, to
PetIQ, LLC, as the borrower under the ABL Credit Agreement.

 

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“ABL Credit Agreement” means that certain Amended and Restated Credit Agreement,
dated as of January 17, 2018, among the Borrower, East West Bank, as
administrative agent, letter of credit issuer and swingline lender and each
other party thereto from time to time, as amended by the ABL Facility Amendment
on the Closing Date and as may be further amended, amended and restated or
otherwise modified from time to time in accordance with the terms thereof.

“ABL Facility” means any asset-based credit facility provided pursuant to the
ABL Credit Agreement or any Permitted Refinancing thereof.

“ABL Facility Amendment” means that certain Amendment to the ABL Credit
Agreement, dated as of the Closing Date, among the Borrower, East West Bank, as
administrative agent, letter of credit issuer and swingline lender and each
party thereto.

“ABL Intercreditor Agreement” means that certain Amended and Restated ABL
Intercreditor Agreement, dated as of January 17, 2018, as between East West
Bank, as initial ABL collateral agent and Ares Capital Corporation, as initial
fixed asset collateral agent and acknowledged and agreed by the Borrower and
certain other Credit Parties from time to time, as may be amended, amended and
restated or otherwise modified from time to time in accordance with the terms
thereof or, if such ABL Intercreditor Agreement is no longer in effect, any
other intercreditor agreement reasonably acceptable to the Administrative Agent.

“ABL Loan Documents” means “ABL Loan Documents” as defined in the ABL
Intercreditor Agreement.

“ABL Priority Collateral” means “ABL Priority Collateral” as defined in the ABL
Intercreditor Agreement.

“ABL Priority Liens” means Liens granted to the collateral agent under any ABL
Loan Documents, at any time, upon ABL Priority Collateral of any Credit Party to
secure Indebtedness and other obligations under the ABL Loan Documents.

“ABL Representative” means, with respect to the ABL Credit Agreement, East West
Bank, as administrative agent or collateral agent, and with respect to any
Permitted Refinancing of the Indebtedness under the ABL Credit Agreement that is
secured on the same basis as the Indebtedness under the ABL Credit Agreement,
the trustee, administrative agent, collateral agent, security agent or similar
agent under the indenture or agreement pursuant to which such Permitted
Refinancing is issued, incurred or otherwise obtained, as the case may be, and
each of their successors in such capacities.

“Acquisition” means a transaction or series of transactions resulting in (a) the
acquisition of a business, division or substantially all assets of a Person;
(b) the record or beneficial ownership of 50% or more of the Capital Stock of a
Person; or (c) a merger, consolidation or combination of any Credit Party or any
of its Restricted Subsidiaries with another Person.

“Act” has the meaning specified in Section 10.15.

“Additional Lender” has the meaning specified in Section 2.16(c).

 

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“Additional Refinancing Lender” has the meaning specified in Section 2.17(a).

“Administrative Agent” means Ares Capital Corporation, acting as administrative
agent for the Secured Parties, or any successor administrative agent appointed
in accordance with this Agreement.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

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

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Aggregate Commitments” means, as of any date of determination, the sum of
outstanding Commitments in respect of the Initial Term Loan Facility, any
Incremental Term Loan Facility and any Refinancing Term Loan Facility on such
date.

“Agreement” has the meaning specified in the introductory paragraph hereto.

“Alternative Interest Rate Election Event” has the meaning specified in Section
3.03.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to Parent, the Borrower or any of its Subsidiaries from
time to time concerning or relating to bribery or corruption, including without
limitation the United States Foreign Corrupt Practices Act of 1977, as amended,
the UK Bribery Act 2010 and other similar legislation in any other
jurisdictions.

“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering,
including Executive Order No. 13224, the PATRIOT Act, the laws comprising or
implementing the Bank Secrecy Act, and the laws administered by the United
States Treasury Department’s Office of Foreign Assets Control (as any of the
foregoing laws may from time to time be amended, renewed, extended, or
replaced).

“Applicable ECF Percentage” means

(a) if as of the end of the applicable Fiscal Year, the First Lien Net Leverage
Ratio is greater than 3.25 to 1.00, 50%,

(b) if as of the end of the applicable Fiscal Year, the First Lien Net Leverage
Ratio is equal to or less than 3.25 to 1.00 and greater than 2.75 to 1.00, 25%
and

(c) if as of the end of the applicable Fiscal Year, the First Lien Net Leverage
Ratio is equal to or less than 2.75 to 1.00, 0%.

 

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“Applicable Margin” means

(a) with respect to Initial Term Loans that are Base Rate Loans, 3.50%,

(b) with respect to Initial Term Loans that are Eurodollar Rate Loans, 4.50% and

(c) with respect to any Incremental Term Loans or any Refinancing Term Loans, as
set forth in the applicable Incremental Amendment or Refinancing Amendment.

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Term Loan Facility
represented by such Lender’s Term Loans at such time. The Applicable Percentage
of each Lender on the Closing Date is set forth opposite the name of such Lender
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, as of any date of determination, (a) in
respect of any Capitalized Lease of any Person, the capitalized amount thereof
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

“Auditor” means KPMG, LLP, or any other nationally recognized independent
certified public accounting firm as shall be retained by Borrower.

“Available Amount” means, as of any date of determination, an amount, not less
than zero in the aggregate, determined on a cumulative basis equal to, without
duplication:

(a) an amount equal to $5,000,000; plus

(b) the Cumulative Retained Excess Cash Flow Amount; plus

(c) the cumulative amount of Net Issuance Proceeds Not Otherwise Applied from
issuances of Qualified Capital Stock received by the Borrower after the Closing
Date and prior to such date; plus

 

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(d) (i) the aggregate amount of proceeds received by the Borrower in cash or
Cash Equivalents after the Closing Date from the sale or other disposition of
any Investment to the extent not required to be (A) used to prepay the
Obligations or (B) reinvested, plus (ii) returns, profits, distributions and
similar amounts received in cash or Cash Equivalents after the Closing Date to
the extent not included or includable in Consolidated EBITDA or the Cumulative
Retained Excess Cash Flow Amount, in each instance in clauses (i) and (ii), on
or in respect of Investments to the extent such Investment was originally funded
with and in reliance on the Available Amount (but, in the aggregate for clauses
(i) and (ii), not in excess of the original amount of the Available Amount used
to fund such Investment); minus

(e) any amount of the Available Amount used to make Investments pursuant to
Section 7.01(j) after the Closing Date and prior to such time; minus

(f) any amount of the Available Amount use to make Restricted Payments pursuant
to Section 7.04(a)(viii) after the Closing Date and prior to such time; minus

(g) any amount of the Available Amount used to prepay Junior Indebtedness
pursuant to Section 7.04(b)(v) after the Closing Date and prior to such time.

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

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

“Bankruptcy Code” means Title 11 of the United States Code as now and
hereinafter in effect and any successors to such statutes.

“Base Rate” means the highest of (a) for any day a fluctuating rate per annum
equal to the rate last quoted by The Wall Street Journal as the “Prime Rate” in
the United States (or another national publication selected by the
Administrative Agent), (b) the Federal Funds Rate plus 0.50%, (c) the Eurodollar
Rate for an Interest Period of one month plus 1.00% and (d) 1.00%. Any change in
the Base Rate due to a change in any of the foregoing shall take effect at the
opening of business on the day specified in the public announcement of such
change.

“Base Rate Loan” means a Term Loan that bears interest based upon the Base Rate.

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by the Administrative Agent
and the Borrower giving due consideration to (i) any selection or recommendation
of a replacement rate or the mechanism for determining such a rate by the
Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a rate of interest as a replacement to the Eurodollar
Rate for U.S. dollar-denominated syndicated credit facilities and (b) the
Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as
so determined would be less than zero, the Benchmark Replacement will be deemed
to be zero for the purposes of this Agreement.

 

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“Benchmark Replacement Adjustment” means, with respect to any replacement of the
Eurodollar Rate with an Unadjusted Benchmark Replacement for each applicable
Interest Period, the spread adjustment, or method for calculating or determining
such spread adjustment, (which may be a positive or negative value or zero) that
has been selected by the Administrative Agent and the Borrower giving due
consideration to (i) any selection or recommendation of a spread adjustment, or
method for calculating or determining such spread adjustment, for the
replacement of the Eurodollar Rate with the applicable Unadjusted Benchmark
Replacement by the Relevant Governmental Body or (ii) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
the Eurodollar Rate with the applicable Unadjusted Benchmark Replacement for
U.S. dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate,” the definition of “Interest Period,”
timing and frequency of determining rates and making payments of interest and
other administrative matters) that the Administrative Agent decides may be
appropriate to reflect the adoption and implementation of such Benchmark
Replacement and to permit the administration thereof by the Administrative Agent
in a manner substantially consistent with market practice (or, if the
Administrative Agent decides that adoption of any portion of such market
practice is not administratively feasible or if the Administrative Agent
determines that no market practice for the administration of the Benchmark
Replacement exists, in such other manner of administration as the Administrative
Agent decides is reasonably necessary in connection with the administration of
this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the Eurodollar Rate:

(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition
Event,” the later of (i) the date of the public statement or publication of
information referenced therein and (ii) the date on which the administrator of
the Eurodollar Rate permanently or indefinitely ceases to provide the Eurodollar
Rate; or

(b) in the case of clause (c) of the definition of “Benchmark Transition Event,”
the date of the public statement or publication of information referenced
therein.

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the Eurodollar Rate:

(a) a public statement or publication of information by or on behalf of the
administrator of the Eurodollar Rate announcing that such administrator has
ceased or will cease to provide the Eurodollar Rate, permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the Eurodollar Rate;

 

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(b) a public statement or publication of information by the regulatory
supervisor for the administrator of the Eurodollar Rate, the U.S. Federal
Reserve System, an insolvency official with jurisdiction over the administrator
for the Eurodollar Rate, a resolution authority with jurisdiction over the
administrator for the Eurodollar Rate or a court or an entity with similar
insolvency or resolution authority over the administrator for the Eurodollar
Rate, which states that the administrator of the Eurodollar Rate has ceased or
will cease to provide the Eurodollar Rate permanently or indefinitely, provided
that, at the time of such statement or publication, there is no successor
administrator that will continue to provide the Eurodollar Rate; or

(c) a public statement or publication of information by the regulatory
supervisor for the administrator of the Eurodollar Rate announcing that the
Eurodollar Rate is no longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Administrative
Agent or the Required Lenders, as applicable, by notice to the Borrower, the
Administrative Agent (in the case of such notice by the Required Lenders) and
the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the Eurodollar
Rate and solely to the extent that the Eurodollar Rate has not been replaced
with a Benchmark Replacement, the period (x) beginning at the time that such
Benchmark Replacement Date has occurred if, at such time, no Benchmark
Replacement has replaced the Eurodollar Rate for all purposes hereunder in
accordance with Section 3.03 and (y) ending at the time that a Benchmark
Replacement has replaced the Eurodollar Rate for all purposes hereunder pursuant
to Section 3.03.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA)
that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of
the Code or (c) any Person whose assets include (for purposes of ERISA
Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of
the Code) the assets of any such “employee benefit plan” or “plan”.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

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“Borrowing” means (a) a borrowing consisting of simultaneous Initial Term Loans
on the Closing Date made by each of the Initial Term Loan Lenders pursuant to
Section 2.01(a), (b) a borrowing consisting of simultaneous Incremental Term
Loans on the applicable Incremental Facility Closing Date or (c) a borrowing
consisting of simultaneous Refinancing Term Loans on the applicable date of a
Refinancing Amendment.

“Breakage Costs” has the meaning specified in Section 3.05.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to the calculation of the Eurodollar Rate, means any such day
on which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.

“CAP Supply Agreement” means that certain Exclusive Distribution and Supply
Agreement, dated as of August 22, 2014 between CAP Supply, Inc., a Delaware
corporation, and PetIQ, LLC (f/k/a True Science Holdings, LLC), an Idaho limited
liability company.

“Capital Expenditures” means, with respect to the Credit Parties and their
Restricted Subsidiaries, all expenditures (by the expenditure of cash or the
incurrence of Indebtedness) by the Credit Parties and their Restricted
Subsidiaries during any measuring period for any fixed or capital assets or
improvements or for replacements, substitutions or additions thereto that are
required to be capitalized and shown on the balance sheet of the Credit Parties
and their Restricted Subsidiaries in accordance with GAAP.

“Capital Stock” means any and all shares, limited liability company interests,
partnership interests, other interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants, rights or options to purchase any of the foregoing.

“Capitalized Leases” means leases under which any Credit Party is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by a Credit Party:

(a) marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency thereof maturing within one year from the
date of acquisition thereof;

(b) commercial paper maturing no more than 270 days from the date of creation
thereof and having the highest or next highest rating obtainable from either
Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc. determined at
the time of investment;

(c) certificates of deposit, banker’s acceptances and time deposits maturing no
more than 180 days from the date of creation thereof issued or guaranteed by, or
placed with, and demand deposit and money market deposit accounts issued or
offered by, (i) any Lender or (ii) any commercial bank, that at the time of
investment, (x) has combined capital, surplus and undivided profits of not less
than $500,000,000, (y) a senior unsecured rating of “A” or better by a
nationally recognized rating agency and (z) is organized under the laws of the
United States of America, any state thereof or is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States or any state thereof;

 

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(d) money market mutual funds that invest solely in one or more of the
investments described in clauses (a) through (c) above.

“Cash Management Agreement” means any agreement that is not prohibited by the
terms hereof to provide Cash Management Products or Services.

“Cash Management Bank” means any Person in its capacity as a party to a Cash
Management Agreement that, at the time it enters into a Cash Management
Agreement with a Credit Party, is a Lender or an Affiliate of a Lender, in its
capacity as a party to such Cash Management Agreement (even if such Person
ceases to be a Lender or such Person’s Affiliate ceased to be a Lender).

“Cash Management Obligations” means, as of any date of determination, the
aggregate outstanding obligations of Credit Parties pursuant to Cash Management
Agreements, provided that Cash Management Obligations (i) may not exceed
$10,000,000 at any time and (ii) with respect to the obligations pursuant to
Cash Management Products or Services described in clause (ii) of the definition
thereof, such Cash Management Obligations shall not exceed in the aggregate
$500,000 out of the $10,000,000 aggregate cap amount at any time; for the
avoidance of doubt, the $500,000 sublimit provided herein is a part of, and not
in addition to, the overall $10,000,000 aggregate limit.

“Cash Management Products or Services” means (i) treasury or cash management
services, including deposit accounts, overnight draft, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled
disbursement, lockbox, account reconciliation and/or (ii) credit cards, debit
cards, p-cards (including purchasing cards and commercial cards), reporting and
trade finance services and other cash management services.

“Casualty Event” means, with respect to any property (including any interest in
property) of Parent, the Borrower or any Restricted Subsidiary, any loss of,
damage to, or condemnation or other taking of, such property for which the
Borrower or a Restricted Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.

“CERCLA” has the meaning specified in the definition of “Environmental Laws.”

“CFC” means any direct or indirect Subsidiary of the Borrower that is not a U.S.
Person and that is a “controlled foreign corporation” within the meaning of
Section 957 of the Code.

“CFC Holding Company” means any direct or indirect Subsidiary of the Borrower
that is a U.S. Person and that has no material assets other than equity (or
equity and debt (including any debt instrument treated as equity for U.S.
federal income tax purposes)) of one or more direct or indirect Subsidiaries of
the Borrower that are CFCs.

 

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

“Change of Control” means

(a) an event or series of events by which any Person or two or more Persons
acting in concert (other than the Sponsors and any Person acting in the capacity
of an underwriter in connection with a public offering of Capital Stock of
Parent) shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of such Credit Party, or
control over the equity securities of Parent entitled to vote for members of the
board of directors or equivalent governing body of Parent on a fully-diluted
basis (and taking into account all such securities that such Person or group has
the right to acquire pursuant to any option right) representing 35% or more of
the combined voting power of such securities; or

(b) Parent shall cease to directly or indirectly own and control legally and
beneficially 100% of the Capital Stock of the Borrower (free and clear of all
Liens other than Liens in favor of the Administrative Agent granted under the
Security Documents and Liens in favor of the ABL Representative granted under
the ABL Loan Documents).

“Class” refers to

(a) with respect to Loans or Term Loans, whether such Loans are Initial Term
Loans, Incremental Term Loans or Refinancing Term Loans (provided, that Loans
that are not fungible of United States federal income tax purposes shall be
construed to be in different Classes or tranches and there shall be no more than
an aggregate of three Classes of term loan facilities under this Agreement) and

(b) with respect to Commitments, whether such Commitments are Initial Term Loan
Commitments, Incremental Term Loan Commitments or Refinancing Term Loan
Commitments (provided, that Commitments that do not result in Loans that are of
the same Class shall be construed to be in difference Classes or tranches).

“Closing Date” means the date of the amendment and restatement of this Agreement
pursuant to the First Amendment.

“Closing Date Material Adverse Effect” means “Material Adverse Effect” as
defined in the Perrigo Acquisition Agreement as of May 8, 2019.

 

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“Closing Date Transactions” means, collectively,

(a) the Perrigo Acquisition,

(b) the amendment and restatement of the Existing Term Loan Credit Agreement by
entering into this Agreement and the Borrowing of the Initial Term Loans
hereunder and

(c) the amendment of the ABL Credit Agreement on or after the Closing Date in
connection with other Closing Date Transactions.

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

“Collateral” means all of the property, rights and interests of the Credit
Parties that are or are intended to be subject to the Liens created by the
Security Documents.

“Commitment” means,

(a) as to each Initial Term Loan Lender, its obligation to make an Initial Term
Loan to the Borrower pursuant to Section 2.01(a) on the Closing Date in an
aggregate principal amount not to exceed the product of (i) the percentage set
forth opposite such Term Loan Lender’s name on Schedule 2.01 under the caption
“Initial Term Loan Commitment Percentage” and (ii) the Initial Term Loan
Commitment Amount,

(b) as to each Incremental Term Loan Lender, its obligations to make an
Incremental Term Loan to the Borrower pursuant to Section 2.16 on the applicable
Incremental Facility Closing Date as set forth in the applicable Incremental
Amendment and

(c) as to each Refinancing Term Loan Lender, its obligations to make a
Refinancing Term Loan to the Borrower pursuant to Section 2.17 on the applicable
date set forth in the applicable Refinancing Amendment.

“Competitor” means a company engaged in the manufacture or distribution of
over-the-counter and prescription pet medication, pet-health, pet treats and pet
food related products.

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

“Confidential Information Memorandum” means a customary confidential information
memorandum for the Initial Term Loan Facility.

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

“Consolidated Current Assets” means, as of any date of determination, all
amounts (other than cash and Cash Equivalents) that would, in conformity with
GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of Parent, the Borrower and their
Restricted Subsidiaries at such date.

 

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“Consolidated Current Liabilities” means, as of any date of determination, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
“total current liabilities” (or any like caption) on a consolidated balance
sheet of Parent, the Borrower and their Restricted Subsidiaries at such date,
but excluding (a) the current portion of any Indebtedness for borrowed money and
(b) without duplication of clause (a) above, all Indebtedness consisting of
revolving loans or swingline loans under the ABL Facility to the extent
otherwise included therein.

“Consolidated EBITDA” means, with respect to Parent, the Borrower and their
Restricted Subsidiaries, on a consolidated basis, as of any date of
determination for any period of determination, without duplication, an amount
equal to:

(a) Consolidated Net Income for such period, plus

(b) the sum of, without duplication, of the following, in each case (other than
clauses (xi) and (xii) below), to the extent deducted in the calculation of
Consolidated Net Income for such period

(i) any provision for income taxes,

(ii) Consolidated Interest Expense,

(iii) depreciation and amortization, in each case to the extent included in the
calculation of Consolidated Net Income for such period,

(iv) other one-time, non-recurring and non-cash expenses or losses that have
been deducted in determining Consolidated Net Income disclosed in writing to,
and deemed acceptable by, the Administrative Agent,

(v) costs and expenses incurred in connection with the Closing Date Transactions
in an aggregate amount not in excess of $6,000,000,

(vi) [reserved],

(vii) Pre-Opening Expenses and losses related to and for further consideration
in New Wellness Centers, opened for less than eighteen (18) full calendar months
and regional and district offices (defined in a manner substantially consistent
with the manner in which PetIQ, Inc. has historically reported same-store
Consolidated EBITDA in its quarterly earnings releases) in an amount not to
exceed, when combined with the add-back set forth in clause (xii) below, 25% of
Consolidated EBITDA for such period prior to giving effect to this clause
(vii) and clause (xii) below; provided, any Pre-Opening Expenses and losses
under this clause (vii) funded with the Net Issuance Proceeds Not Otherwise
Applied from issuances of Qualified Capital Stock shall be excluded from the 25%
cap set forth above,

(viii) non-cash compensation expenses and other non-cash expenses or charges
arising from the granting of stock options, stock appreciation right or similar
arrangements,

 

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(ix) non-recurring legal expenses for litigation matters in an amount not to
exceed $200,000 for any period of four consecutive Fiscal Quarters,

(x) fees and expenses paid to members of the board of directors of Parent (or
any direct or indirect parent company of Parent) in an amount not to exceed
$250,000 for any period of four consecutive Fiscal Quarters,

(xi) “run rate” cost savings, operating expense reductions and synergies related
to the Closing Date Transactions in an amount previously identified to the
Administrative Agent and projected by the Borrower in good faith to result from
actions either taken or expected to be taken or with respect to which
substantial steps have been taken or are expected to be taken (in each case, in
the good faith determination of the Borrower) within eighteen (18) months after
the Closing Date and that are realized within eighteen (18) months after such
actions taken, so long as such savings and synergies are reasonably identifiable
and factually supportable,

(xii) “run rate” cost savings, operating expense reductions and synergies
related to mergers and other business combinations, acquisitions, divestitures,
restructurings, cost saving initiatives and other similar initiatives
consummated after the Closing Date projected by the Borrower in food faith to
result from actions either taken or expected to be taken or with respect to
which substantial steps have been taken or are expected to be taken (in each
case, in the good faith determination of the Borrower) within eighteen
(18) months after a merger or other business combination, acquisition,
divestiture, restructuring, cost savings initiative or other initiative and that
are realized within eighteen (18) months after such actions taken, so long as
such cost savings and synergies are reasonably identifiable and factually
supportable and in an amount not to exceed, when combined with the add-back set
forth in clause (vii) above (other than any Pre-Opening Expenses and losses
under clause (vii) funded with the Net Issuance Proceeds Not Otherwise Applied
from issuances of Qualified Capital Stock), 25% of Consolidated EBITDA for such
period prior to giving effect to this clause (xii) and clause (vii) above,

(xiii) restructuring and related charges and extraordinary, unusual and
non-recurring charges,

(xiv) costs and expenses incurred in connection with the Perrigo Acquisition and
related transactions, any other acquisitions, dispositions outside the ordinary
course of business, any casualty events, any incurrence of debt, issuance of
equity or amendments or waivers to this Agreement or any other debt permitted
under this Agreement, whether or not consummated, minus

(c) the sum of, without duplication, (i) income tax credits and cash refunds
actually received and (ii) any non-cash gains that have been added in
determining Consolidated Net Income, in each case to the extent included in the
calculation of Consolidated Net Income for such period;

 

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provided, Consolidated EBITDA for the Perrigo Entities for the fiscal quarters
ending June 30, 2018, September 30, 2018, December 31, 2018 and March 31, 2019
shall be deemed to be $7,832,896.90, $2,420,512.70, $428,938.20 and
$3,082,683.70, respectively.

“Consolidated Interest Expense” means, as of any date of determination for any
period of determination, for Parent, the Borrower and their Restricted
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, (b) all interest paid or payable with respect
to discontinued operations and (c) the portion of rent expense under Capitalized
Leases that is treated as interest in accordance with GAAP.

“Consolidated Net Income” means, at any date of determination for any period of
determination, the net income (or loss) of Parent, the Borrower and their
Restricted Subsidiaries on a consolidated basis for such period, but excluding
(a) extraordinary gains and extraordinary losses (but, for the avoidance of
doubt, such exclusions shall not include extraordinary losses on account of
write-offs or write-downs of inventory or receivables) for such period and
(b) the net income of any Restricted Subsidiary during such period to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such income is not permitted by operation of the terms
of its Governing Documents or any agreement, instrument or Law applicable to
such Restricted Subsidiary during such period and is not actually distributed
during such period to a Credit Party.

“Consolidated Working Capital” means, as of any date of determination, the
excess of Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

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

“Covered Entity” means any of the following:

(a) a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);

(b) a “covered bank” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 47.3(b); or

(c) a “covered FSI” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning assigned in Section 10.20.

 

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“Credit Agreement Refinancing Indebtedness” means Indebtedness incurred solely
by the Borrower in the form of one or more Classes of Loans or Commitments under
this Agreement, in each case, issued, incurred or otherwise obtained (including
by means of the extension or renewal of existing Indebtedness) in exchange for,
or to refinance, in whole or part, existing Term Loans or any then-existing
Credit Agreement Refinancing Indebtedness (“Refinanced Debt”); provided that

(a) such Indebtedness is secured by the Collateral on an equal priority basis
(but without regard to control of remedies) with the Liens securing the other
Obligations hereunder and is not secured by any property or assets other than
the Collateral,

(b) such Indebtedness is not guaranteed by any Person other than the Guarantors,

(c) such Indebtedness is incurred solely to refinance, in whole or part,
Refinanced Debt, and the proceeds thereof shall be substantially
contemporaneously applied to prepay such Refinanced Debt, interest and any
premium (if any) thereon, and fees and expenses incurred in connection with such
Credit Agreement Refinancing Indebtedness,

(d) such Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of the Refinanced Debt, plus accrued and
unpaid interest, any premium, and fees and expenses reasonably incurred in
connection therewith,

(e) such Indebtedness has a maturity no earlier, and a Weighted Average Life to
Maturity no shorter than the Refinanced Debt,

(f) the terms and conditions of such Indebtedness (except as otherwise provided
above and with respect to pricing, premiums, fees, rate floors and optional
prepayment or redemption terms) are substantially identical to the terms and
conditions applicable to the Refinanced Debt (except for covenants or other
provisions applicable only to periods after the latest maturity date for the
Term Loans at the time of incurrence of such Indebtedness or added for the
benefit of all Lenders) and

(g) such Refinanced Debt shall be repaid, all accrued interest, fees, premiums
(if any) and penalties in connection therewith shall be paid on the date such
Credit Agreement Refinancing Indebtedness is incurred.

“Credit Extension” means a Borrowing of Term Loans hereunder.

“Credit Parties” means the Borrower and the Guarantors.

“Cumulative Retained Excess Cash Flow Amount” means, as of any date of
determination, an amount, not less than zero in the aggregate, determined on a
cumulative basis equal to the aggregate cumulative sum of the Retained ECF
Percentage of Excess Cash Flow for all Fiscal Years ending after the Closing
Date (commencing with the Fiscal Year ended December 31, 2020) and prior to such
date.

“Customer Agreement” means the supplier agreements with Wal-Mart and Sam’s Club.

 

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“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means 2.00% per annum.

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

“Designated Non-Cash Consideration” means the fair market value of non-cash
consideration received by a Credit Party or a Restricted Subsidiary in
connection with an asset sale that is so designated as “Designated Non-Cash
Consideration” in a certificate executed by a Financial Officer of the Borrower
setting for the basis for such valuation; provided, the applicable Credit Party
or Restricted Subsidiary will convert such Designated Non-Cash Consideration
into cash or Cash Equivalents within 180 days following the consummation of the
applicable sale.

“Disqualified Capital Stock” means any Capital Stock that, by its terms (or by
the terms of any security or other Capital Stock into which they are convertible
or for which they are exchangeable), or upon the happening of any event or
condition,

(a) requires the payment of any dividends (other than dividends payable solely
in shares of Qualified Capital Stock),

(b) matures or is mandatorily redeemable or subject to mandatory repurchase or
redemption or repurchase at the option of the holders thereof (other than solely
for Qualified Capital Stock), in each case in whole or in part and whether upon
the occurrence of any event, pursuant to a sinking fund obligation on a fixed
date or otherwise (including as the result of a failure to maintain or achieve
any financial performance standards) or

(c) is or becomes convertible into or exchangeable for, automatically or at the
option of any holder thereof, any Indebtedness, Capital Stock or other assets
other than Qualified Capital Stock,

in the case of each of clauses (a), (b) and (c), prior to the date that is 91
days after the latest maturity date of the Term Loans at the time of issuance of
such Capital Stock; provided, however, that if such Capital Stock is issued to
any employee or to any plan for the benefit of employees of Parent, the Borrower
or their Restricted Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Capital Stock solely because it
may be required to be repurchased by a Credit Party in order to satisfy
applicable statutory or regulatory obligations or as a result of such employee’s
termination, death or disability.

 

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“Disqualified Lender” has the meaning specified in Section 10.01.

“Dollar” and “$” mean lawful money of the United States.

“Early Opt-in Election” means the occurrence of:

(a) (i) a determination by the Administrative Agent or (ii) a notification by
the Required Lenders to the Administrative Agent (with a copy to the Borrower)
that the Required Lenders have determined that U.S. dollar-denominated
syndicated credit facilities being executed at such time, or that include
language similar to that contained in Section 3.03 are being executed or
amended, as applicable, to incorporate or adopt a new benchmark interest rate to
replace the Eurodollar Rate, and

(b) (i) the election by the Administrative Agent or (ii) the election by the
Required Lenders to declare that an Early Opt-in Election has occurred and the
provision, as applicable, by the Administrative Agent of written notice of such
election to the Borrower and the Lenders or by the Required Lenders of written
notice of such election to the Administrative Agent.

“East West Bank” means East West Bank, a California banking corporation.

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

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

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

“Effective Yield” means, as of any date of determination, the sum of

(a) the higher of (i) the Eurodollar Rate on such date for a deposit in Dollars
with a maturity of three months (as determined by reference to clause (a) of the
definition of Eurodollar Rate) and (ii) any applicable eurodollar rate floor
applicable to such Indebtedness,

(b) the interest rate margin as of such date (with such interest rate margin
being determined by reference to the applicable eurodollar rate) and

 

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(c) the amount of original issue discount and/or upfront fees paid and payable
(which shall be deemed to constitute like amounts of original issue discount) by
the Borrower to the Lenders in providing such Indebtedness (with original issue
discount and upfront fees being equated to interest based on the shorter of an
assumed four-year life to maturity or actual maturity) (it being understood that
customary arrangement or commitment fees payable to any of the lead arrangers
(or its affiliates) in connection with such Indebtedness shall be excluded).

“Electronic Medium” means the electronic medium through which notices and other
communications are sent (including e-mail) pursuant to procedures approved by
the Administrative Agent and otherwise in accordance with Section 10.02(b).

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii)).

“Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems and including without limitation, those arising under the Resource
Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended (“CERCLA”) and the
Superfund Amendments and Reauthorization Act of 1986 (“SARA”).

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Credit Party or any of
their respective Restricted Subsidiaries directly or indirectly resulting from
or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

“Environmental Permits” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal

 

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under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is insolvent within the meaning of Section 4245 of ERISA;
(d) the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; or (h) the imposition of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate.

“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan, the higher of (a) the rate per annum determined by the Administrative
Agent to be the rate for deposits in Dollars for a period approximately equal to
such Interest Period and in an amount approximately equal to the principal
amount of such Eurodollar Rate Loan which appears on the Reuters Screen LIBOR01
Page as of 11:00 a.m. (London time) on the second Business Day prior to the
first day of such Interest Period (adjusted for any and all assessments,
surcharges and reserve requirements) and (b) 0.00%. If such interest rate shall
cease to be available from the above-described Reuters report, the Eurodollar
Rate shall be determined from such financial reporting service as the
Administrative Agent shall reasonably determine and use with respect to its
other loan facilities for which interest is determined based on the London
interbank offered rate.

“Eurodollar Rate Loan” means a Term Loan that bears interest based upon the
Eurodollar Rate.

“Eurodollar Rate Loan Continuation Certificate” means a certificate
substantially in the form of Exhibit B.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means, in respect of Parent, the Borrower and their
Restricted Subsidiaries’ for any Fiscal Year, and for the purpose of determining
the amount of any required prepayment of the Term Loans pursuant to
Section 2.05(g), the excess, if any, of

(a) Consolidated EBITDA for such Fiscal Year, minus

(b) the sum, without duplication, of

(i) the cash portion of Consolidated Interest Expense paid during such Fiscal
Year,

(ii) the cash portion of any fees paid pursuant to this Agreement or the ABL
Facility during such Fiscal Year,

 

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(iii) the cash portion of income taxes, including Permitted Tax Distributions
(excluding the principal amount of Indebtedness used to finance such Permitted
Tax Distributions and any such Permitted Tax Distributions financed with the
proceeds of an offering of Capital Stock),

(iv) (A) all scheduled and voluntary principal payments made in respect of the
Term Loan Facilities during such Fiscal Year, (B) all permanent repayments of
advances made during such Fiscal Year under the ABL Facility to the extent
accompanied by a permanent reduction of commitments thereunder and (C) all
principal payments made in respect of any other Indebtedness permitted pursuant
to Section 7.02 made during such Fiscal Year to the extent such payments cannot
be reborrowed, in each case of clauses (A) through (C), to the extent made with
internally generated funds,

(v) (A) maintenance and growth Capital Expenditures funded with internally
generated cash in the applicable Fiscal Year and (B) to the extent the Borrower
or its Restricted Subsidiaries have entered into a binding contract with respect
to the same, maintenance and growth Capital Expenditures to be funded with
internally generated cash in the immediately subsequent Fiscal Year; provided,
to the extent the actual amount of such Capital Expenditures in the subsequent
Fiscal Year is less than the amount deducted pursuant to this clause (b)(v)(B),
such difference shall be added to the Excess Cash Flow for the subsequent Fiscal
Year,

(vi) Pre-Opening Expenses incurred in such Fiscal Year to the extent made with
internally generated funds,

(vii) cash payments made during such Fiscal Year in respect of Permitted
Acquisitions to the extent made with internally generated funds, including cash
earnouts and royalty payments made to sellers that were not deducted as expenses
and working capital and purchase price adjustments made pursuant to the
acquisition documentation governing such Permitted Acquisition,

(viii) the cash portion of costs or expenses paid during such Fiscal Year in
accordance with clause (v) of the definition of Consolidated EBITDA,

(ix) the cash portion of amounts added back to the definition of Consolidated
EBITDA in accordance with clauses (ix) and (x) thereof and

(x) the excess, if any, of Consolidated Working Capital at the end of such
Fiscal Year over Consolidated Working Capital at the beginning of such Fiscal
Year (or if the difference results in an amount less than zero, minus the
excess, if any of the Consolidated Working Capital at the end of such Fiscal
Year over Consolidated Working Capital).

“Excluded Hedge Obligation” means, with respect to any Guarantor, any Hedge
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Hedge Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official

 

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interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the guarantee
of such Guarantor or the grant of such security interest becomes effective with
respect to such Hedge Obligation. If a Hedge Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Hedge Obligation that is attributable to swaps for which such
guarantee or security interest is or becomes illegal.

“Excluded Subsidiary” means any Subsidiary

(a) that is a CFC,

(b) that is a direct or indirect Subsidiary of a CFC,

(c) that is a CFC Holding Company,

(d) that is an Immaterial Subsidiary,

(e) that is an Unrestricted Subsidiary,

(f) that is a Restricted Subsidiary prohibited by applicable law, rule or
regulation or by any contractual obligation existing on the Closing Date or on
the date such subsidiary is acquired (so long as in respect of any such
contractual prohibition such prohibition is not incurred in contemplation of
such acquisition and only so long as such restriction is continuing), in each
case, from Guaranteeing the Obligations or which would require governmental
(including regulatory) consent, approval, license or authorization to provide a
Guarantee unless such consent, approval, license or authorization to provide a
Guarantee has been received, or for which the provision of a Guarantee would
result in a material adverse tax consequence to Parent, the Borrower or their
Restricted Subsidiaries, as reasonably determined by the Borrower in
consultation with the Administrative Agent,

(g) that is a Restricted Subsidiary acquired pursuant to a Permitted Acquisition
or similar investment financed with Indebtedness permitted to be assumed
pursuant to Section 7.02 hereof (and not incurred in contemplation of such
Permitted Acquisitions or Investment) and any Restricted Subsidiary thereof that
Guarantees such assumed Indebtedness, in each case, and so long as, such
Indebtedness prohibits such Restricted Subsidiary from becoming a Guarantor (so
long as such prohibition is not created in contemplation of such acquisition and
only for so long as such prohibition exists),

(h) that is a Mark and Chappell Entity;

(i) that is any other Restricted Subsidiary that the Borrower and the
Administrative Agent reasonably agree that the cost of providing a Guarantee of
the Obligations is excessive in relation to the value afforded thereby; and

(j) any Subsidiary that is not a wholly-owned Subsidiary of the Borrower;
provided, that any disposition or other transaction that results in a Guarantor
becoming an Excluded Subsidiary (and ceasing to be a Guarantor) pursuant to this
clause (j) shall be deemed to be an Investment in such Excluded Subsidiary at
the time of such disposition or other transaction equal to the fair market value
of the Capital Stock of such Excluded Subsidiary owned, directly or indirectly,
by the Borrower after giving effect to such disposition or other transaction.

 

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Notwithstanding the foregoing, no Subsidiary shall be considered an “Excluded
Subsidiary” unless such Subsidiary is also excluded or otherwise does not
provide a guarantee with respect to any Indebtedness or other obligations under
the ABL Credit Agreement, the ABL Loan Documents or any other Permitted
Refinancing thereof.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient,

(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its Lending Office located in, the jurisdiction
imposing such Taxes (or any political subdivision thereof) or (ii) that are
Other Connection Taxes,

(b) in the case of a Lender or any other Recipient of a payment hereunder, U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
such Recipient (other than a Lender) on the date such Recipient becomes a party
to this Agreement or of such Lender with respect to an applicable interest in a
Loan or Commitment pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Loan or Commitment (other than pursuant to
an assignment request by the Borrower under Section 10.13) or (ii) such Lender
changes its Lending Office, except in each case to the extent that, pursuant to
Section 3.01(a), amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its Lending Office,

(c) Taxes attributable to such Recipient’s failure to comply with
Section 3.01(e) and

(d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Existing Affiliate Transactions” has the meaning assigned in Section 7.08.

“Existing Term Loan Credit Agreement” means that certain Term Loan Credit
Agreement, dated as of January 17, 2018, among PetIQ, LLC, as the borrower, Ares
Capital Corporation and the other lenders party thereto and Ares Capital
Corporation, as the administrative agent.

“Existing Term Loans” means any advance made by any term loan lender under the
Existing Term Loan Credit Agreement prior to the date hereof.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities entered into in
connection with the implementation of the foregoing.

 

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“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to major
financial institutions reasonably acceptable to the Administrative Agent on such
day on such transactions as determined by the Administrative Agent.

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Fee Letter” means the letter agreement dated as of May 8, 2019 by and between
the Borrower and the Administrative Agent.

“Financial Maintenance Covenant” means the covenants set forth in Section 7.13.

“Financial Officer” means, with respect to any Person, its chief financial
officer, treasurer or controller or other officer acceptable to the
Administrative Agent, provided, that with respect to the Borrower (other than
with respect to Section 4.01(g)), this shall mean John Newland, Jeff Caywood or
April McAvoy in their respective capacities as chief financial officer,
treasurer and controller, respectively, or, in the event they shall no longer
serve in such capacities at any time, such replacement therefor that is
acceptable to the Administrative Agent.

“First Amendment” means that certain First Amendment to Term Loan Credit
Agreement, dated as of July 8, 2019, by and among the Borrower, the Guarantors,
the lenders party thereto and the Administrative Agent.

“First Lien Net Leverage Ratio” means the ratio, as of any date of
determination, of

(a) Total Indebtedness as of such date secured by a first-lien on property of
Parent, the Borrower or their Restricted Subsidiaries (including, for the
avoidance of doubt, the ABL Facility, any secured letters of credit and
Indebtedness under this Agreement) minus Unrestricted Cash to

(b) Consolidated EBITDA for the twelve-month period ended as of such date,

provided, that for purposes of calculating compliance with Section 7.13 for the
first two (2) full Fiscal Quarters ending after the Closing Date, clause
(a) shall exclude revolving loans borrowed as of the Closing Date under the ABL
Facility to the extent such loans remain outstanding as of the applicable date
of determination.

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

 

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“Fiscal Quarter” means each period of three months commencing on the first day
of each of January, April, July and October.

“Fiscal Year” means the respective fiscal years of the Borrower and its
Restricted Subsidiaries for accounting and tax purposes, ending on December 31
of each year.

“Foreign Lender” means any Lender that is not a U.S. Person.

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

“Frontline Agreement” means the Frontline Plus Distribution Agreement, dated as
of January 1, 2018, by and between the Borrower and Merial, Inc., a Georgia
corporation.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governing Documents” means, with respect to any Person, its certificate or
articles of incorporation, certificate of change of name (if any), certificate
of formation, or, as the case may be, certificate of limited partnership, its
by-laws, memorandum and articles of association, operating agreement or, as the
case may be, partnership agreement or other constitutive documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its Capital Stock.

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

“Granting Lender” has the meaning specified in Section 10.06(h).

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the

 

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payment or performance of such Indebtedness or other obligation, or (iii) to
maintain working capital, equity capital or any other financial statement
condition or liquidity or level of income or cash flow of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation or
(iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or
in part) or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien). The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantees” means, collectively, (a) the Guaranty dated as of the Original
Closing Date among the Guarantors in favor of the Administrative Agent and
(b) any other guaranty in form and substance reasonably satisfactory to the
Administrative Agent and executed by any Guarantor in favor of the
Administrative Agent and the other Secured Parties in respect of the
Obligations.

“Guarantors” means Parent, the Borrower and each wholly-owned Restricted
Subsidiary (other than an Excluded Subsidiary) which has guaranteed the
Obligations.

“Guaranty Promissory Note” means that certain Guaranty Promissory Note, dated as
of January 17, 2018, among PetIQ, LLC, as issuer and VIP Petcare Holdings, Inc.,
as holder, as may be amended, amended and restated or otherwise modified from
time to time in accordance with the terms thereof and the Seller Notes
Subordination Agreement.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedge Banks” means, any Person that, at the time it enters into a Swap Contract
permitted hereunder, is a Lender, the Administrative Agent or an Affiliate of a
Lender or the Administrative Agent, in its capacity as a party to such Swap
Contract.

“Hedge Obligations” means, as of any date of determination, the aggregate
outstanding obligations of the Credit Parties pursuant to Swap Contracts.

“Immaterial Subsidiary” means any Restricted Subsidiary of Parent or the
Borrower as to which, as of the relevant date of determination (a) the
consolidated total assets of such Restricted Subsidiary and its Subsidiaries (on
a consolidated basis and after giving effect to intercompany eliminations) and
all other Immaterial Subsidiaries as of such date (and their respective
Subsidiaries (on a consolidated basis and after giving effect to intercompany

 

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eliminations)) does not exceed an amount equal to 2.5% of the consolidated total
assets (after giving effect to intercompany eliminations) of Parent, the
Borrower and their Restricted Subsidiaries as of the last day of the most
recently ended Fiscal Quarter and (b) the revenues of such Restricted Subsidiary
and its Subsidiaries (on a consolidated basis and giving effect to intercompany
eliminations) for such Fiscal Quarter and all other Immaterial Subsidiaries as
of such date (on a consolidated basis and after giving effect to intercompany
eliminations) for such Fiscal Quarter do not exceed an amount equal to 2.5% of
consolidated revenues (after giving effect to intercompany eliminations) of
Parent, the Borrower and their Restricted Subsidiaries for such Fiscal Quarter,
unless in either case, the Borrower shall have designated that such Restricted
Subsidiary shall not be an Immaterial Subsidiary.

“Incremental Amendment” has the meaning specified in Section 2.16(f)(i).

“Incremental Amount” means

(a) (i) the greater of (x) $65,000,000 and (y) 100% of Consolidated EBITDA,
determined on a pro forma basis for the most recently ended four Fiscal Quarter
period of the Borrower minus (ii) the aggregate principal amount of all
Incremental Term Loans, Incremental Term Loan Commitments and Incremental
Equivalent/Ratio Debt previously incurred or issued in reliance of this clause
(a), plus,

(b) (i) the aggregate amount of all voluntary prepayments of any Term Loans
pursuant to Section 2.05(a) (to the extent not funded with long term
Indebtedness) minus (ii) the aggregate principal amount of all Incremental Term
Loans, Incremental Term Loan Commitments and Incremental Equivalent/Ratio Debt
previously incurred or issued in reliance of this clause (b), plus

(c) an unlimited amount so long as,

(i) in the case of Incremental Equivalent/Ratio Debt secured by a first-lien on
property of Parent, the Borrower or their Restricted Subsidiaries and
Incremental Term Loans and Incremental Term Loan Commitments, the pro forma
First Lien Net Leverage Ratio after giving effect to such Indebtedness is not
greater than 3.75 to 1.00,

(ii) in the case of Incremental Equivalent/Ratio Debt secured by a lien on
property of Parent, the Borrower or their Restricted Subsidiaries, the pro forma
Secured Net Leverage Ratio after giving effect to such Indebtedness is not
greater than 3.75 to 1.00, and

(iii) in the case of unsecured Incremental Equivalent/Ratio Debt, the pro forma
Total Net Leverage Ratio after giving effect to such Indebtedness is not greater
than 3.75 to 1.00;

provided, in the case of clause (c), calculated assuming any commitments are
fully drawn as of the date of determination and without “netting” the cash
proceeds of any such Indebtedness or other Indebtedness incurred substantially
concurrently; provided, further, that (x) capacity under clause (c) of the
Incremental Amount shall be used before capacity under clauses (a) and (b) and
capacity under clause (b) shall be used before capacity under clause (a) and
(y) Indebtedness may be incurred under any of clauses (a), (b) and (c) of the
Incremental Amount in a single transaction by calculating the incurrence under
clause (c) without giving effect to concurrence incurrence of Indebtedness under
clauses (a) or (b).

 

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“Incremental Equivalent/Ratio Debt” means Indebtedness pursuant to a credit
agreement, indenture or other agreement (other than this Agreement) shall be
subject to the following conditions:

(a) if such Incremental Equivalent/Ratio Debt is in the form of term loans
denominated in U.S. dollars and secured on pari passu basis with Initial Term
Loans, it shall be subject to Section 2.16(e)(ii), mutatis mutandis,

(b) shall not mature earlier than the latest maturity date of any Term Loans
outstanding at the time of incurrence of such Incremental Equivalent/Ratio Debt
(or in the case of an Incremental Equivalent/Ratio Debt that is Subordinated
Debt, the date that is 180 days after the latest maturity date of any of any
Term Loans outstanding at the time of incurrence of such Incremental
Equivalent/Ratio Debt),

(c) shall have a Weighted Average Life to Maturity no shorter than the remaining
Weighted Average Life to Maturity of any Term Loans outstanding at the time of
incurrence of such Incremental Equivalent/Ratio Debt,

(d) may participate on a pro rata basis or less than pro rata basis (but not on
a greater than pro rata basis) in any mandatory prepayments of Term Loans
hereunder, as specified in the applicable documentation of such Incremental
Equivalent/Ratio Debt,

(e) to the extent such Incremental Equivalent/Ratio Debt is secured on a pari
passu basis with the Term Loans, an Other Debt Representative validly acting on
behalf of the holders of such Incremental Equivalent/Ratio Debt shall have
become party to a Pari Passu Intercreditor Agreement or, if a Pari Passu
Intercreditor Agreement has previously been entered into, execute a joinder to
such Pari Passu Intercreditor Agreement in substantially the form provided in
such Pari Passu Intercreditor Agreement,

(f) to the extent such Incremental Equivalent/Ratio Debt is secured on a junior
basis with the Term Loans, an Other Debt Representative validly acting on behalf
of the holders of such Incremental Equivalent/Ratio Debt shall have become party
to a Junior Lien Intercreditor Agreement or, if a Junior Lien Intercreditor
Agreement has previously been entered into, execute a joinder to such Junior
Lien Intercreditor Agreement in substantially the form provided in such Junior
Lien Intercreditor Agreement and

(g) the terms, provisions and documentation of any commitments or loans, as the
case may be, incurred under any such Incremental Equivalent/Ratio Debt, to the
extent not identical to the then-existing Term Loans, shall be materially no
more favorable to the lenders committing or providing such Incremental
Equivalent/Ratio Debt than the terms, provisions and documentation of the
then-existing Term Loans to the then-existing Term Loan Lenders (except for
terms, provisions or documentation applicable only after the latest maturity
date of any then-existing Term Loans or such terms, provisions or documentation
are added for the benefit of all Lenders hereunder).

 

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“Incremental Facility Closing Date” has the meaning specified in Section
2.16(d).

“Incremental Loan Request” has the meaning specified in Section 2.16(a).

“Incremental Term Loan Commitments” has the meaning specified in Section
2.16(a).

“Incremental Term Loan Facility” means a term loan facility established pursuant
to Section 2.16.

“Incremental Term Loan Lender” has the meaning specified in Section 2.16(c).

“Incremental Term Loans” has the meaning specified in Section 2.16(b).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the
original date on which such trade account payable was due);

(d) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(e) Capitalized Leases and Synthetic Lease Obligations;

(f) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Capital Stock in such Person or any
other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any Capitalized Lease or
Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

 

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“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payments hereunder or any other Loan Documents and (b) to
the extent not otherwise described in clause (a) herein, Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Initial Term Loan Commitment Amount” means $220,000,000.

“Initial Term Loan Commitments” means, as to each Initial Term Loan Lender, its
obligation to make an Initial Term Loan to the Borrower pursuant to
Section 2.01(a) on the Closing Date in an aggregate principal amount not to
exceed the product of (i) the percentage set forth opposite such Initial Term
Loan Lender’s name on Schedule 2.01 under the caption “Initial Term Loan
Commitment Percentage” and (ii) the Initial Term Loan Commitment Amount.

“Initial Term Loan Facility” means, at any time (a) on or prior to the Closing
Date, the aggregate amount of the Initial Term Loan Commitments at such time and
(b) thereafter, the aggregate principal amount of the Initial Term Loans of all
the Initial Term Loan Lenders outstanding at such time. As of the Closing Date,
the aggregate principal amount of the Term Loan Facility is $220,000,000.

“Initial Term Loan Lender” means any Lender that holds an Initial Term Loan or
Initial Term Loan Commitment at such time.

“Initial Term Loan Lenders” means (a) each Initial Term Loan Lender and (b) any
other Person who becomes an assignee of the rights and obligations of an Initial
Term Loan Lender pursuant to the terms of this Agreement.

“Initial Term Loans” means an advance made by any Initial Term Loan Lender under
the Initial Term Loan Facility.

“Intellectual Property” has the meaning specified in Section 5.06.

“Intercompany Note” means a promissory note in form and substance satisfactory
to the Administrative Agent evidencing intercompany Indebtedness between and
among the Credit Parties, subject to the terms of a Subordination Agreement.

“Interest Payment Date” means, as applicable, (a) as to any Term Loan that is a
Base Rate Loan, the first Business Day of each Fiscal Quarter and the Maturity
Date and (b) as to any Term Loan that is a Eurodollar Rate Loan, (i) the last
day of the Interest Period applicable to such Eurodollar Rate Loan, unless such
Interest Period exceeds three months, in which case the Interest Payment Date
shall mean the three month anniversary of such Eurodollar Rate Loan and each
three month anniversary thereafter and (ii) the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one (1), two (2), three (3) or
six (6) months thereafter or, if agreed by all relevant Lenders, twelve
(12) months, a period of shorter than one (1) month or such other period as may
be agreed thereafter (in each case, subject to availability), as selected by the
Borrower in its Loan Notice; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

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(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the applicable Maturity Date of the
facility under which such Eurodollar Rate Loan was made.

“Investment” means, all expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of Capital Stock, assets that
constitute a business unit or Indebtedness of, or for loans, advances or capital
contributions to, or in respect of any Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or interest in, another Person.
In determining the aggregate amount of Investments outstanding at any particular
time: (a) the amount of any Investment represented by a guaranty shall be the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value, write-downs or write-offs with
respect thereof.

“IP Security Agreements” means collectively, (i) the Intellectual Property
Security Agreements dated as of the Original Closing Date, made by each Credit
Party party thereto in favor of the Administrative Agent, on behalf of itself
and the other Secured Parties and (ii) each other intellectual property security
agreement, patent security agreement, trademark security agreement and copyright
security agreement required to be delivered pursuant to Section 6.12 in form and
substance reasonably satisfactory to the Administrative Agent.

“IRS” means the United States Internal Revenue Service.

“Junior Indebtedness” means (a) any Indebtedness secured by Lien that is junior
to the Liens securing the Obligations on any property of the Credit Parties or
their Restricted Subsidiaries (other than Indebtedness permitted pursuant to
Section 7.02(c)), (b) any unsecured Indebtedness or (c) any Subordinated Debt.

 

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“Junior Lien Intercreditor Agreement” means a customary junior lien
intercreditor agreement in form and substance reasonably satisfactory to the
Administrative Agent.

“Laws” means, collectively, all international, foreign, federal, state,
provincial and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of law.

“LCA Election” means the Borrower’s election to treat a specified investment as
a Limited Condition Acquisition.

“LCA Test Date” has the meaning specified in Section 1.02(d).

“Lenders” means, collectively, the Term Loan Lenders.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing) and the filing
of, or agreement to authorize, any financing statement under the UCC or
comparable law of any jurisdiction.

“Lien Waiver” means an agreement, in form and substance reasonably satisfactory
to the Administrative Agent by which

(a) for any Collateral located on an owned premises subject to a mortgage or
deed of trust in favor of a Person other than the Administrative Agent or the
ABL Representative, the mortgagee or beneficiary, as applicable, waives or
subordinates any Lien it may have on the Collateral, and agrees to permit the
Administrative Agent to enter upon the premises and remove the Collateral as
permitted hereunder or to use the premises to store or dispose of the
Collateral;

(b) for any Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit the
Administrative Agent to enter upon the premises and remove the Collateral as
permitted hereunder or to use the premises to store or dispose of the
Collateral;

(c) for any Collateral held by a warehouseman, processor, shipper or similar
Person, such Person waives or subordinates any Lien it may have on the
Collateral, agrees to hold any documents in its possession relating to the
Collateral as agent for the Administrative Agent, and agrees to deliver the
Collateral to Administrative Agent upon request;

 

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(d) for any Collateral held by a repairman, mechanic or bailee, such Person
acknowledges the Administrative Agent’s Lien, waives or subordinates any Lien it
may have on the Collateral, and agrees to deliver the Collateral to the
Administrative Agent upon request; and

(e) for any Collateral subject to a licensor’s intellectual property rights, the
licensor grants to the Administrative Agent the right, vis-à-vis such licensor,
to enforce the Administrative Agent’s Liens with respect to the Collateral,
including the right to dispose of it with the benefit of the intellectual
property, whether or not a default exists under any applicable license.

“Limited Condition Acquisition” means any Permitted Acquisition by the Borrower
or one or more of its Restricted Subsidiaries whose consummation is not
conditioned on the availability of, or on obtaining, third party financing.

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in the form of a Term Loan.

“Loan Account” has the meaning specified in Section 2.18(a).

“Loan Advance Request” means a notice of a Borrowing which, if in writing, shall
be substantially in the form of Exhibit A.

“Loan Documents” means this Agreement, each Note, each Security Document, the
Fee Letter, each Subordination Agreement, each Compliance Certificate, the ABL
Intercreditor Agreement, any Junior Lien Intercreditor Agreement, any Pari Passu
Intercreditor Agreement, any agreement creating or perfecting rights in cash
collateral pursuant to the provisions of Section 2.14 (but specifically
excluding any Secured Cash Management Agreement and Secured Hedge Agreement),
and each other agreement, document or instrument delivered by any Credit Party
in connection with any Loan Document, whether or not specifically mentioned
herein or therein.

“Loan Notice” means, as applicable, (a) a notice of a Borrowing or a notice of a
conversion of Loans from one Type to the other, which in either case of this
clause (a) shall be substantially in the form of a Loan Advance Request, or
(b) a notice of a continuation of a Eurodollar Rate Loan, which shall be
substantially in the form of a Eurodollar Rate Loan Continuation Certificate.

“Mark and Chappell Entities” means collectively, M&C USA, LLC, a Delaware
limited liability company, Mark and Chappell Limited, a private company limited
by shares organized under the laws of the United Kingdom, and Mark and Chappell
(U.S.A.), Inc., an Illinois corporation.

“Master Agreement” has the meaning specified in the definition of “Swap
Contract.”

“Material Adverse Effect” means

(a) on the Closing Date, Closing Date Material Adverse Effect and

 

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(b) after the Closing Date,

(i) a material adverse change in, or a material adverse effect on, the
operations, business, assets, properties, liabilities (actual or contingent) or
financial condition of the Credit Parties and their Restricted Subsidiaries,
taken as a whole;

(ii) a material impairment of the rights and remedies of the Administrative
Agent or any Lender under any Loan Document, or of the ability of the Credit
Parties, taken as a whole, to perform its obligations under any Loan Document to
which it is a party; or

(iii) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Credit Party of any Loan Documents to which it is a
party.

“Material Agreements” means (a) each Customer Agreement, (b) the NPIC Supply
Agreement and CAP Supply Agreement, (c) the Frontline Agreement and (d) any
other contract or agreement the loss, invalidity, termination, expiration or
other failure of such contract or agreement to be in full force and effect of
which would constitute a Material Adverse Effect.

“Maturity Date” means, as applicable, (a) in the case of the Initial Term Loan
Facility, July 8, 2025 or (b) in the case of an Incremental Term Loan Facility
or a Refinancing Term Loan Facility, the maturity date set forth in the
applicable Incremental Amendment or Refinancing Amendment.

“Maximum Rate” has the meaning as assigned in Section 10.09.

“Mortgaged Properties” means, all Real Estate of the Credit Parties required to
be subject to a Mortgage pursuant to Section 6.12 hereof.

“Mortgages” means each mortgage or deed of trust with respect to each fee
interest of each Credit Party in Real Estate executed and delivered to the
Administrative Agent after the Closing Date pursuant to Section 6.12 hereof, in
each case, in form and substance reasonably satisfactory to the Administrative
Agent.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.

“Net Cash Proceeds” means, with respect to any event or transaction described in
Sections 2.05(c), (d) or (f), the cash proceeds received in respect of such
event or transaction, including

(a) any cash received in respect of any non-cash proceeds (including, without
limitation, the monetization of notes receivables), but only as and when
received, and

 

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(b) in each case, net of the sum of (w) all reasonable fees and out-of-pocket
expenses (including appraisals, and brokerage, legal, title and recording tax
expenses and commissions) paid by any Credit Party or a Restricted Subsidiary to
third parties (other than Affiliates) in connection with such event,
(x) transfer or similar taxes, (y) reserves for indemnities, until such reserves
are no longer needed, and (z) in the case of a sale or other disposition of an
asset described in Sections 2.05(c) and (d), the amount of all payments required
to be made by any Credit Party (or to establish an escrow for the repayment of)
on any Indebtedness by the terms thereof (other than the Obligations) secured by
such asset to the extent the lien in favor of the holder of such Indebtedness is
permitted by Section 7.03(a)(viii); provided that such payments made shall not
exceed the amount of cash proceeds received by such Credit Party or the
aggregate amount of such Indebtedness.

“Net Issuance Proceeds” means, in respect of any issuance of Capital Stock, cash
proceeds (including cash proceeds as and when received in respect of noncash
proceeds received or receivable in connection with such issuance), net of
underwriting discounts and reasonable out-of-pocket costs and expenses paid or
incurred in connection therewith in favor of any Person not an Affiliate of the
Borrower.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 10.01 and (ii) has been
approved by the Required Lenders.

“Not Otherwise Applied” means, with reference to any Net Issuance Proceeds of
any capital contributions from the sale or issuance of Capital Stock that is
proposed to be applied to a particular use or transaction, that such amount was
not previously applied or is not simultaneously being applied, to any other use,
payment or transaction other than such particular use, payment or transaction.

“Note” means a promissory note made by the Borrower in favor of a Term Loan
Lender evidencing the Term Loans made by such Term Loan Lender, substantially in
the form of Exhibit C.

“NPIC Supply Agreement” means that certain Manufacturing and Supply Agreement,
dated as of November, 2012 by and between TRURX LLC, an Idaho limited liability
company, and Natural Polymer International Corporation, a Delaware Corporation.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Credit Party arising under any Loan Document or
otherwise with respect to any Loan, any Secured Cash Management Agreement or any
Secured Hedge Agreement, in each case, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees (including,
without limitation, any amounts payable pursuant to Section 2.05(i)) that accrue
after the commencement by or against any Credit Party or any Affiliate thereof
of any proceeding under any Debtor Relief Laws naming such Person as the debtor
in such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding. Notwithstanding the foregoing, Obligations of any
Guarantor shall in no event include any Excluded Hedge Obligations of such
Guarantor.

 

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“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Original Closing Date” means the “Closing Date” as defined in the Existing Term
Loan Credit Agreement.

“Other Applicable Indebtedness” has the meaning specified in Section 2.05(h).

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

“Other Debt Representative” means, with respect to any series of Permitted Pari
Passu Refinancing Debt, any series of Permitted Junior Refinancing Debt or any
series of Incremental Equivalent/Ratio Debt, in each case, that is secured by
the Collateral on an equal priority basis (but without regard to control of
remedies) with, or on a junior basis to, the Obligations, the trustee,
administrative agent, collateral agent, security agent or similar agent under
the indenture or agreement pursuant to which such Indebtedness is issued,
incurred or otherwise obtained, as the case may be, and each of their successors
in such capacities.

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar taxes, charges or similar levies that
arise from any payment made under, from the execution, delivery, performance,
enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document except any such
Taxes that are Other Connection Taxes impose with respect to an assignment
(other than an assignment made pursuant to Section 10.13).

“Outstanding Amount” means, (a) with respect to the Term Loans on any date of
determination, the aggregate outstanding principal amount thereof after giving
effect to any prepayments or repayments of the Term Loans on such date, (b) with
respect to any Secured Cash Management Obligations pursuant to a Secured Cash
Management Agreement on any date of determination, the aggregate outstanding
amount of such Secured Cash Management Obligations on such date and (c) with
respect to any Secured Hedge Obligations pursuant to a Secured Hedge Agreement
on any date of determination, the aggregate amount of such Secured Hedge
Obligations on such date.

“Parent” means PetIQ Holdings, LLC, a Delaware limited liability company.

“Pari Passu Intercreditor Agreement” means a customary pari passu intercreditor
agreement in form and substance reasonably satisfactory to the Administrative
Agent.

 

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“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
funding standards and required contributions (including any installment payment
thereof) to Pension Plans and set forth in, with respect to plan years ending
prior to the effective date of the Pension Act, Section 412 of the Code and
Section 302 of ERISA, each as in effect prior to the Pension Act and,
thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302,
303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Borrower and any ERISA Affiliate and is either covered by Title IV of
ERISA or is subject to the minimum funding standards under Sections 412 or 436
of the Code or Sections 302 or 303 of ERISA.

“Perfection Certificates” means, collectively, (i) each Perfection Certificate
delivered by the Credit Parties to the Administrative Agent on the Closing Date
and (ii) each other Perfection Certificate from time to time delivered by the
Credit Parties following the Closing Date to the Administrative Agent and
reasonably acceptable to the Administrative Agent in accordance with this
Agreement.

“Permitted Acquisition” means any Acquisition by a Credit Party or a Restricted
Subsidiary that satisfies each of the following conditions:

(a) subject to Section 1.02(d), no Event of Default exists or would arise as a
result thereof;

(b) the asset, business or Person being acquired is engaged in the same or
substantially similar lines of business of the Credit Parties, taken as a whole;

(c) no Indebtedness (other than Permitted Indebtedness) or Liens (other than
Permitted Liens) are assumed or incurred and

(d) any entity that is acquired or formed in connection with such Acquisition
shall become a “Credit Party” to the extent required by, and shall comply with
all of the requirements of, Section 6.12.

 

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“Permitted Asset Disposition” means a liquidation, sale, transfer, conveyance,
assignment or other disposition permitted by Section 7.05(b).

“Permitted Equity Liens” means Liens permitted to Section 7.03(a)(iv),
Section 7.03(a)(vii), Section 7.03(a)(ix) and Section 7.03(a)(xi).

“Permitted Indebtedness” means the Indebtedness permitted by Section 7.02.

“Permitted Junior Refinancing Debt” mean secured Indebtedness incurred solely by
the Borrower in the form of one or more series of junior lien secured notes or
loans pursuant to a credit agreement, indenture or other agreement (other than
this Agreement); provided that

(a) such Indebtedness is secured by all or less than all of the Collateral on a
basis junior in priority to the Liens securing the Obligations hereunder and the
obligations in respect of any Permitted Pari Passu Refinancing Debt and is not
secured by any property or assets other than the Collateral,

(b) such Indebtedness is not guaranteed by any Person other than the Guarantors,

(c) such Indebtedness is issued, incurred or otherwise obtained solely to
refinance, in whole or part, Refinanced Debt, and the proceeds thereof shall be
substantially contemporaneously applied to prepay such Refinanced Debt, interest
and any premium (if any) thereon, and fees and expenses incurred in connection
with such Permitted Junior Refinancing Debt,

(d) such Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of the Refinanced Debt, plus accrued and
unpaid interest, any premium, and fees and expenses reasonably incurred in
connection therewith,

(e) such Indebtedness does not mature or have scheduled amortization or payments
of principal and is not subject to mandatory redemption, repurchase, prepayment
or sinking fund obligations (other than pursuant to customary asset sale, event
of loss, excess cash flow (provided that such asset sale, event of loss and
excess cash flow sweep does not require the application of any net cash proceeds
or excess cash flow that would otherwise be required to be applied to the
prepayments of the Loans hereunder pursuant to Section 2.05) and change of
control prepayment provisions and a customary acceleration right after an event
of default), in each case, prior to the date that is 180 days after the latest
maturity date of the Term Loans at the time such Indebtedness is incurred,

(f) the terms and conditions of such Indebtedness (other than with respect to
pricing, premiums, fees, rate floors and optional prepayment or redemption
terms) are substantially identical to or (taken as a whole) no more favorable to
the lenders or holders providing such Indebtedness than the terms and conditions
applicable to the Refinanced Debt (except for covenants or other provisions
applicable only to periods after the latest maturity Date at the time of
incurrence of such Indebtedness or added for the benefit of all Lenders),

 

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(g) the security agreements relating to such Indebtedness are substantially the
same as or more favorable to the Credit Parties than the Security Documents
(with such differences as are reasonably satisfactory to the Administrative
Agent) and

(h) an Other Debt Representative validly acting on behalf of the holders of such
Indebtedness shall have become party to a Junior Lien Intercreditor Agreement
or, if a Junior Lien Intercreditor Agreement has previously been entered into,
execute a joinder to such Junior Lien Intercreditor Agreement in substantially
the form provided in such Junior Lien Intercreditor Agreement.

“Permitted Liens” means those Liens permitted by Section 7.03.

“Permitted Pari Passu Refinancing Debt” means any secured Indebtedness incurred
solely by the Borrower in the form of one or more series of senior secured notes
or loans pursuant to a credit agreement, indenture or other agreement (other
than this Agreement); provided that

(a) such Indebtedness is secured by all or less than all of the Collateral on an
equal priority basis (but without regard to control of remedies) with the Liens
securing the Obligations hereunder and is not secured by any property or assets
other than the Collateral,

(b) such Indebtedness is not guaranteed by any Person other than the Guarantors,

(c) such Indebtedness is issued, incurred or otherwise obtained solely to
refinance, in whole or part, Refinanced Debt, and the proceeds thereof shall be
substantially contemporaneously applied to prepay such Refinanced Debt, interest
and any premium (if any) thereon, and fees and expenses incurred in connection
with such Permitted Pari Passu Refinancing Debt,

(d) such Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of the Refinanced Debt plus accrued and
unpaid interest, any premium, and fees and expenses reasonably incurred in
connection therewith,

(e) such Indebtedness has a maturity no earlier and a Weighted Average Life to
Maturity no shorter than the Refinanced Debt,

(f) such Indebtedness is not subject to any mandatory prepayment, repurchase or
redemption provisions, unless the prepayment, repurchase or redemption of such
Indebtedness is accompanied by the prepayment of a pro rata portion of the
outstanding principal of the Loans hereunder pursuant to Section 2.05,

(g) the terms and conditions of such Indebtedness (other than with respect to
pricing, premiums, fees, rate floors and optional prepayment or redemption
terms) are substantially identical to or (taken as a whole) no more favorable to
the lenders or holders providing such Indebtedness than the terms and conditions
applicable to the Refinanced Debt (except for covenants or other provisions
applicable only to periods after the latest maturity date for the Term Loans at
the time of incurrence of such Indebtedness or added for the benefit of the
Lenders),

 

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(h) the security agreements relating to such Indebtedness are substantially the
same as or more favorable to the Credit Parties than the Security Documents
(with such differences as are reasonably satisfactory to the Administrative
Agent),

(i) an Other Debt Representative validly acting on behalf of the holders of such
Indebtedness shall have become party to a Pari Passu Intercreditor Agreement or,
if a Pari Passu Intercreditor Agreement has previously been entered into,
execute a joinder to such Pari Passu Intercreditor Agreement in substantially
the form provided in such Pari Passu Intercreditor Agreement and

(j) if applicable, an Other Debt Representative validly acting on behalf of the
holders of such Indebtedness shall have become party to a Junior Lien
Intercreditor Agreement or, if a Junior Lien Intercreditor Agreement has
previously been entered into, execute a joinder to such Junior Lien
Intercreditor Agreement in substantially the form provided in such Junior Lien
Intercreditor Agreement.

“Permitted Prior Liens” means Liens permitted pursuant to Section 7.03(a) (other
than Section 7.03(a)(vi), Section 7.03(a)(ix), Section 7.03(a)(xi) (other than
clause (B) thereof) and Section 7.03(a)(xii)).

“Permitted Refinancing” means any modification, refinancing, refunding, renewal
or extension of any Indebtedness; provided that

(a) the principal amount (or accreted value, if applicable) thereof does not
exceed the principal amount (or accreted value, if applicable) of the
Indebtedness being modified, refinanced, refunded, renewed or extended except by
an amount equal to unpaid accrued interest and premium thereon plus other
reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder;

(b) such modification, refinancing, refunding, renewal or extension has a
maturity no earlier and a Weighted Average Life to Maturity no shorter than the
Indebtedness being modified, refinanced, refunded, renewed or extended;

(c) at the time thereof, no Default or Event of Default shall have occurred and
be continuing;

(d) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is unsecured, such modification, refinancing, refunding, renewal or
extension is unsecured;

(e) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms, taken as a whole, at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being modified, refinanced, refunded, renewed or extended;

 

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(f) (i) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is secured, such modification, refinancing, refunding, renewal or
extension is unsecured or secured by no more collateral than the Indebtedness
being modified, refinanced, refunded, renewed or extended, (ii) if the
Indebtedness being modified, refinanced, refunded, renewed or extended is
secured on a junior basis to the Term Loans, such modification, refinancing,
refunding, renewal or extension is unsecured or secured on a junior lien basis
to the Term Loans and (iii) if the Indebtedness being modified, refinanced,
refunded, renewed or extended is subject to a Pari Passu Intercreditor Agreement
and/or Junior Lien Intercreditor Agreement and such modification, refinancing,
refunding, renewal or extension is secured, a representative validly acting on
behalf of holders of such modification, refinancing, refunding, renewal or
extension shall become party to a Pari Passu Intercreditor Agreement or Junior
Lien Intercreditor Agreement, as appropriate, or if a Pari Passu Intercreditor
Agreement or Junior Lien Intercreditor Agreement has previously been entered
into, execute a joinder to such Pari Passu Intercreditor Agreement or Junior
Lien Intercreditor Agreement in substantially the form provided in such Pari
Passu Intercreditor Agreement or Junior Lien Intercreditor Agreement, as
applicable;

(g) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is originally incurred under the ABL Credit Agreement (or is a secured
Permitted Refinancing of such Indebtedness), the applicable ABL Representative
acting on behalf of the holders of such modified, refinanced, refunded, renewed
or extended Indebtedness shall become a party to the ABL Intercreditor Agreement
to the extent the modified, refinanced, refunded, renewed or extended
Indebtedness is secured on the same basis as Indebtedness originally incurred
under the ABL Credit Agreement (or is a secured Permitted Refinancing of such
Indebtedness); and

(h) the primary obligors and guarantors in respect of such Indebtedness being
modified, refinanced, refunded, renewed or extended remain the same (or
constitute a subset thereof).

“Permitted Tax Distributions” means, with respect to any taxable period in which
the Borrower is treated as a pass-through entity for U.S. federal, state and/or
local income Tax purposes, dividends or distributions by any Credit Party and
their Restricted Subsidiaries, in order for (A) PetIQ, Inc. and any of its
Subsidiaries to pay such entity’s taxes attributable to the income of the Credit
Parties and their Restricted Subsidiaries, in an aggregate amount not to exceed
the product of (x) the combined effective corporate federal, state and/or local
income tax rate applicable to PetIQ, Inc. (as estimated by Borrower in good
faith, after taking into account the character of the income, deductions and/or
credits available, including under Section 250 or 960 of the Code and the
deductibility of U.S. state and local income Tax for U.S. federal income Tax
purposes) and (y) the taxable income of the Borrower for such taxable year or
portion thereof allocated to PetIQ, Inc. or such Subsidiaries (taking into
account carryover of unused prior year losses or excess interest deductions and
the impact of any step-up under Section 743 or 734 of the Code), in each case of
clauses (x) and (y) available at the level of the Borrower or PetIQ, Inc. (or
their relevant Subsidiaries), as applicable and (B) any of the other owners
(direct or indirect) of any Credit Party that are not specified in clause
(A) above, (if indirect, which hold through an unbroken chains of one or more
pass-through entities) to pay such owner’s federal, state or local (as
applicable) income and franchise taxes attributable to the income of any Credit
Party and their Restricted Subsidiaries that result directly from such owner’s
direct or indirect beneficial ownership of the Borrower and its Subsidiaries for
such taxable period (or portion thereof), in an aggregate amount not to exceed
the product of (x) the highest combined marginal federal and state and/or local
statutory Tax rate applicable to an individual resident in New York,

 

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New York (including any Medicare contribution tax on net investment income, if
applicable) (as estimated by Borrower in good faith, after taking into account
the character of the income, deductions and/or credits available under
Section 199A of the Code and the deductibility of U.S. state and local income
Tax for U.S. federal income Tax purposes) and (y) the taxable income of the
Borrower for such taxable year or portion thereof allocated to such other owners
(taking into account excess interest deductions and the impact of any step-up
under Section 743 or 734 of the Code and any unused loss carryovers attributable
to the Borrower and its Subsidiaries (to the extent available under applicable
Law)), in each case of clauses (x) and (y), available at the level of the
Borrower or such owners, as applicable; provided that payments with respect to
any Taxes attributable to any Unrestricted Subsidiary for any taxable period
shall be limited to the amount actually paid with respect to such period by such
Unrestricted Subsidiary to the Borrower or its Restricted Subsidiaries for the
purposes of paying such income Taxes.

“Permitted Unsecured Refinancing Debt” means unsecured Indebtedness incurred
solely by the Borrower in the form of one or more series of senior or
subordinated unsecured notes or loans pursuant to a credit agreement, indenture
or other agreement (other than this Agreement); provided that

(a) such Indebtedness is not secured by any Lien,

(b) such Indebtedness is not guaranteed by any Person other than the Guarantors,

(c) such Indebtedness is issued, incurred or otherwise obtained solely to
refinance, in whole or part, Refinanced Debt, and the proceeds thereof shall be
substantially contemporaneously applied to prepay such Refinanced Debt, interest
and any premium (if any) thereon, and fees and expenses incurred in connection
with such Permitted Unsecured Refinancing Debt,

(d) such Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of the Refinanced Debt, plus accrued and
unpaid interest, any premium, and fees and expenses reasonably incurred in
connection therewith,

(e) such Indebtedness does not mature or have scheduled amortization or payments
of principal and is not subject to mandatory redemption, repurchase, prepayment
or sinking fund obligations, in each case prior to the latest maturity of the
Term Loans at the time such Indebtedness is incurred and

(f) the terms and conditions of such Indebtedness (other than with respect to
pricing, premiums, fees, rate floors and optional prepayment or redemption
terms) are substantially identical to or (taken as a whole) no more favorable to
the lenders or holders providing such Indebtedness than the terms and conditions
applicable to the Refinanced Debt (except for covenants or other provisions
applicable only to periods after the latest maturity date for the Term Loans at
the time of incurrence of such Indebtedness or added for the benefit of all
Lenders).

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

 

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“Perrigo Entities” means Sergeant’s Pet Care Products, Inc., a Michigan
corporation, and each of SPC Trademarks, LLC, a Texas limited liability company,
Pet Logic, LLC, a Delaware limited liability company, Meridian Animal Health,
LLC, a Nevada limited liability company, Velcera, Inc., a Delaware corporation,
FidoPharm, Inc., a Delaware corporation, LoradoChem, Inc., a Colorado
corporation, FidoPharmBrands, LLC, a Delaware limited liability company, and
American Business Sergeant’s Pet Care Products Trade (Shanghai) Co, Ltd., a
Chinese company.

“Perrigo Acquisition” means the acquisition of all the issued and outstanding
capital stock of Sergeant’s Pet Care Products, Inc., a Michigan corporation,
pursuant to the Perrigo Acquisition Agreement.

“Perrigo Acquisition Agreement” means that certain Purchase and Sale Agreement,
dated as of May 8, 2019, by and among the Borrower, L. Perrigo Company, a
Michigan corporation, Perrigo Company plc, an Irish public limited company, and
PetIQ Inc., a Delaware corporation.

“Perrigo Acquisition Agreement Representations” means the representations and
warranties relating to the Perrigo Entities in the Perrigo Acquisition Agreement
that are material to the interests of the Lenders, but only to the extent that
Parent, the Borrower or its Affiliates has the right to terminate its (or their)
obligations under the Perrigo Acquisition Agreement or decline to consummate the
Perrigo Acquisition as a result of a breach of such representations and
warranties.

“Pharmaceutical License” means any state pharmacy board license or other similar
license required to be maintained by the Credit Parties and their Restricted
Subsidiaries to enable the sale, transfer or other distribution of
pharmaceutical products of the Credit Parties and their Restricted Subsidiaries.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate or any such Plan to which the Borrower or any ERISA
Affiliate contributes or is required to contribute on behalf of any of its
employees.

“Pre-Opening Expenses” means amounts incurred by the Borrower and its Restricted
Subsidiaries on a consolidated basis in connection with “pre-opening activities”
related to the roll-out of clinics.

“Prepayment Notice” means the certificate in substantially the form of Exhibit G
hereto, or in such other form reasonably acceptable to the Administrative Agent,
to be signed by a Financial Officer of the Borrower and delivered to the
Administrative Agent and the Lenders pursuant to Section 2.05 hereof.

“Prepayment Premium Event” means any voluntary prepayment of all or any portion
of the Initial Term Loans in connection with (i) the refinancing, refunding or
renewal of all or any portion of the Initial Term Loans or (ii) any amendment,
restatement, amendment and restatement or other modification of this Agreement,
in the case of each of clauses (i) and (ii), which reduces or effectively
reduces the Effective Yield of the Initial Term Loans; provided, however, that
(a) any prepayment or repayment of the Initial Term Loans in connection with or
upon the occurrence of a Change of Control and (b) any Transformative
Acquisition shall not constitute a Prepayment Premium Event.

 

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“Prohibited Assignee” means (i) any Competitor and (ii) any Affiliate of a
Competitor, as determined by the Borrower and identified in a written notice by
the Borrower to the Administrative Agent with the Administrative Agent’s written
consent (not to be unreasonably withheld); provided as to clause (i) and
(ii) above, that “Prohibited Assignee” shall not include commercial or corporate
banks or bona fide debt funds, and any funds that are managed or controlled by
such commercial or corporate banks or bona fide debt funds which funds
principally invest in commercial loans or debt securities.

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” has the meaning assigned in Section 10.20.

“Qualified Capital Stock” means any Capital Stock other than Disqualified
Capital Stock.

“RCRA” has the meaning specified in the definition of “Environmental Laws.”

“Real Estate” means all real property at any time owned or leased (as lessee or
sublessee) by any Credit Party.

“Recipient” means the Administrative Agent, any Lender or any other recipient of
any payment to be made by or on account of any obligation of any Credit Party
hereunder.

“Reference Period” means, as of any date of determination, the period of twelve
consecutive Fiscal Months ending on such date.

“Refinanced Debt” shall have the meaning set forth in the definition of “Credit
Agreement Refinancing Indebtedness”.

“Refinancing Amendment” means an amendment to this Agreement executed by the
Borrower, the Administrative Agent, each Additional Refinancing Lender and each
Lender that agrees to provide any portion of Refinancing Term Loan Commitments
or Refinancing Term Loans, in each case, in accordance with Section 2.17.

“Refinancing Series” means all Refinancing Term Loan Commitments or Refinancing
Term Loans that are established pursuant to the same Refinancing Amendment;
provided that any Refinancing Term Loan Commitments or Refinancing Term Loans
that are established pursuant to a subsequent Refinancing Amendment shall be a
part of any previously established Refinancing Series to the extent that
(a) such subsequent Refinancing Amendment expressly provides that the
Refinancing Term Loan Commitments or Refinancing Term Loans, as applicable,
provided for thereunder are intended to be a part of such previously established

 

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Refinancing Series and (b) in the case of Refinancing Term Loans, the
Refinancing Term Loans provided for under such Refinancing Amendment are
fungible for United States federal income tax purposes with such previously
established Refinancing Series. Refinancing Term Loan Commitments that, if and
when drawn in the form of Refinancing Term Loans, would yield Refinancing Term
Loans that are construed to be a part of any previously established Refinancing
Series pursuant to clause (b) above, shall also be construed to be a party of
such previously established Refinancing Series.

“Refinancing Term Loan Commitments” means one or more Class of Commitments
hereunder that are established to fund Refinancing Term Loans of the applicable
Refinancing Series hereunder pursuant to a Refinancing Amendment.

“Refinancing Term Loan Facility” means a term loan facility established pursuant
to Section 2.17.

“Refinancing Term Loan Lender” means any Lender that holds a Refinancing Term
Loan Commitment or Refinancing Term Loan at such time.

“Refinancing Term Loans” means one or more Class of Term Loans hereunder that
result from a Refinancing Amendment.

“Register” has the meaning specified in Section 10.06(c).

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

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means a Loan Advance Request.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the sum of the Aggregate Commitments and Total Outstandings, at such
time.

“Restricted Payment” means any (a) dividend or other distribution (whether in
cash, securities or other property) with respect to any Capital Stock of any
Credit Party or any Restricted Subsidiary, (b) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Capital Stock, or on account of any return of capital to
the stockholders, partners or members (or the equivalent Person thereof) of any
Credit Party or any Restricted Subsidiary and (c) any payment (whether in cash,
securities or other property) of management fees (or other fees of a similar
nature) by such Credit Party or such Restricted Subsidiary to any equity holder
or Affiliate of such Credit Party or such Restricted Subsidiary.

 

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“Restricted Subsidiary” means any Subsidiary other than an Unrestricted
Subsidiary.

“Retained ECF Percentage” means, with respect to any Fiscal Year, (a) 100% minus
(b) the Applicable ECF Percentage with respect to such Fiscal Year.

“Sam’s Club” means Sam’s West, Inc. and Sam’s East, Inc., collectively.

“Sanction(s)” means any international economic sanction administered or enforced
by OFAC, the United Nations Security Council, the European Union, Her Majesty’s
Treasury or other relevant sanctions authority.

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/ Programs/Pages/Programs.aspx,
or as otherwise published from time to time.

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, (b) a Person named on the lists
maintained by the United Nations Security Council available at
http://www.un.org/sc/committees/list_compend.shtml, or as otherwise published
from time to time, (c) a Person named on the lists maintained by the European
Union available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, or
as otherwise published from time to time, (d) a Person named on the lists
maintained by Her Majesty’s Treasury available at
http://www.hm-treasury.gov.uk/fin_sanctions_index.htm, or as otherwise published
from time to time, or (e) (i) an agency of the government of a Sanctioned
Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a
person resident in a Sanctioned Country, to the extent subject to a sanctions
program administered by OFAC.

“SARA” has the meaning specified in the definition of “Environmental Laws.”

“Secured Cash Management Agreement” means any Cash Management Agreement
permitted hereunder between any Credit Party and any Cash Management Bank;
provided, however, that for a Cash Management Agreement be included as a
“Secured Cash Management Agreement” on any date of determination by the
Administrative Agent, the applicable Cash Management Bank (other than the
Administrative Agent or an Affiliate of the Administrative Agent) must have
delivered a Secured Party Designation Notice to the Administrative Agent prior
to such date of determination and any Cash Management Obligations arising from
such Cash Management Agreement cannot be secured under the ABL Documents.

“Secured Cash Management Obligations” means Cash Management Obligations of
Credit Parties to Cash Management Banks pursuant to Secured Cash Management
Agreements.

 

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“Secured Hedge Agreement” means any Swap Contract permitted hereunder between
any Credit Party and any Hedge Bank provided, however, that for a Swap Contract
to be included as a “Secured Hedge Agreement” on any date of determination by
the Administrative Agent, the applicable Hedge Bank (other than the
Administrative Agent or an Affiliate of the Administrative Agent) must have
delivered a Secured Party Designation Notice to the Administrative Agent prior
to such date of determination and any Hedge Obligations arising from such Swap
Contract cannot be secured under the ABL Documents.

“Secured Hedge Obligations” means Hedge Obligations of Credit Parties to Hedge
Banks pursuant to Secured Hedge Agreements (other than any Excluded Hedge
Obligations).

“Secured Net Leverage Ratio” means the ratio, as of any date of determination,
of

(a) Total Indebtedness as of such date secured by a Lien on property of Parent,
the Borrower or their Restricted Subsidiaries minus Unrestricted Cash to

(b) Consolidated EBITDA for the twelve-month period ended as of such date.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
each co-agent or sub-agent appointed by the Administrative Agent from time to
time pursuant to Section 9.05, each Cash Management Bank, each Hedge Bank and
the other Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Security Documents.

“Secured Party Designation Notice” means a notice from any Lender or an
Affiliate of a Lender substantially in the form of Exhibit I.

“Security Agreement” means, the Security Agreement dated as of the Original
Closing Date, entered into by the Credit Parties and the Administrative Agent,
together with any other security agreement granted by any Credit Party as
required by Section 6.12 which shall be in form and substance reasonably
satisfactory to the Administrative Agent.

“Security Documents” means the Guarantees, the Security Agreement, the IP
Security Agreements, the Mortgages and all other guarantees, security
agreements, intellectual property security agreements, mortgages, deeds of
trust, control agreements, instruments and documents, including without
limitation Uniform Commercial Code financing statements and other equivalent
registrations and personal property security filings with respect to any other
applicable jurisdiction, control agreements, required to be executed or
delivered pursuant to, or in connection with, this Agreement or any other Loan
Document, all in form and substance reasonably acceptable to the Administrative
Agent.

“Seller Notes” means the 2018 Contingent Note, the 2019 Contingent Note and the
Guaranty Promissory Note.

“Seller Notes Guaranty” means that certain Guaranty, dated as of January 17,
2018, among PetIQ, Inc., PetIQ Holdings, LLC, True Science Holdings, LLC, TRURX
LLC and TRU Prodigy, LLC, each as guarantors and VIP Petcare Holdings, Inc., as
holder, as may be amended, amended and restated or otherwise modified from time
to time in accordance with the terms thereof and the Seller Note Subordination
Agreement.

 

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“Seller Notes Subordination Agreement” means that certain Subordination
Agreement, dated as of January 17, 2018, among the Administrative Agent, as
agent; PetIQ, LLC, as issuer; PetIQ, Inc., PetIQ Holdings, LLC, True Science
Holdings, LLC, TRURX LLC and TRU Prodigy, LLC, each as guarantors and VIP
Petcare Holdings, Inc., as subordinated creditor, as may be amended, amended and
restated or otherwise modified from time to time in accordance with the terms
thereof.

“Senior Management” means with respect to any of the Credit Parties or any of
its Restricted Subsidiaries, its chief financial officer, president or chief
executive officer.

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date

(a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person,

(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured,

(c) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature,

(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person’s property would
constitute an unreasonably small capital, and

(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business.

The amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

“SPC” has the meaning specified in Section 10.06(h).

“Specified Event of Default” means (a) any Event of Default set forth in
Sections 8.01(a), 8.01(e) or 8.01(j) or (b) any of the covenants contained in
Sections 6.04 or 7.13.

“Specified Representations” means the representations and warranties contained
in Sections 5.01(a)(i), 5.01(a)(ii), 5.01(b)(i), 5.01(b)(ii)(A),
5.01(b)(ii)(B)(x) (solely with respect to material Indebtedness of the Credit
Parties), 5.01(d), 5.03, 5.12, 5.14, 5.22(a) (subject to the provisions of
Section 4.01(d)), 5.23 and 5.24.

 

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“Sponsors” means Eos TS Investor Co., ECP IV TS Investor Co., Highland Consumer
Fund I Limited Partnership, HCF – TS Blocker Corp., Highland Consumer
Entrepreneurs Fund I Limited Partnership, Rockhurst, LLC, Labore et Honore, LLC
and VIP Petcare Holdings, Inc., and each of their respective Affiliates.

“Subordinated Debt” means unsecured Indebtedness of any Credit Party or any
Restricted Subsidiary that is expressly subordinated and made junior to the
payment and performance in full of the Obligations, and evidenced as such by a
Subordination Agreement.

“Subordination Agreement” means a subordination and intercreditor agreement or
such other written instrument containing subordination provisions, each in form
and substance acceptable to the Required Lenders in their sole discretion.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Parent.

“Supported QFC” has the meaning assigned in Section 10.20.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement, in each case for
the purpose of hedging the foreign currency, interest rate or commodity risk
associated with the operations of Parent, the Borrower and the Restricted
Subsidiaries.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

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

“Term Loan” means an advance made by any Term Loan Lender under a Term Loan
Facility.

“Term Loan Facility” means each of the Initial Term Loan Facility, any
Incremental Term Loan Facility or Refinancing Term Loan Facility.

“Term Loan Increase” has the meaning specified in Section 2.16(a).

“Term Loan Lender” means (a) any Lender that holds a Term Loan at such time and
(b) any other Person who becomes an assignee of the rights and obligations of a
Term Loan Lender pursuant to terms of this Agreement.

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

“Total Indebtedness” means, as of any date of determination, the aggregate
amount (without duplication) of all Indebtedness of the Borrower and its
Restricted Subsidiaries as of such date, determined on a consolidated basis in
accordance with GAAP (other than Indebtedness with respect to the Seller Notes).

“Total Net Leverage Ratio” means the ratio, as of any date of determination, of

(a) Total Indebtedness, secured or unsecured, as of such date on property of
Parent, the Borrower or their Restricted Subsidiaries minus Unrestricted Cash to

(b) Consolidated EBITDA for the twelve-month period ended as of such date.

“Total Outstandings” means, as of the date of determination, the aggregate
Outstanding Amount of all Term Loans.

“Trade Date” has the meaning specified in Section 10.06(b)(i).

“Transformative Acquisition” means any Acquisition or Investment by the Borrower
or any Restricted Subsidiary that either (a) is not permitted by the terms of
this Agreement immediately prior to the consummation of such Acquisition or
Investment or (b) if permitted by the terms of this Agreement immediately prior
to the consummation of such Acquisition or Investment, would not provide the
Borrower and its Restricted Subsidiaries with adequate flexibility under this
Agreement for the continuation and/or expansion of the combined operations
following such consummation, as determined by the Borrower acting in good faith.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

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“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

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

“U.S. Special Resolution Regimes” has the meaning assigned in Section 10.20.

“U.S. Tax Compliance Certificate” has the meaning specified in Section
3.01(e)(ii)(B)(III).

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in
effect in the State of New York; provided that, if perfection or the effect of
perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “Uniform Commercial Code” or
“UCC” means the Uniform Commercial Code as in effect from time to time in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

“United States” and “U.S.” mean the United States of America.

“Unrestricted Cash” means, as of the date of determination, the aggregate amount
of all cash and Cash Equivalents on a consolidated basis of the Borrower and the
other Credit Parties that are not “restricted” for purposes of GAAP and in which
the Administrative Agent has a perfected first-priority security interest;
provided, the aggregate amount of Unrestricted Cash shall not include any cash
or Cash Equivalents that are subject to a Lien (other than any Lien in favor of
the Administrative Agent or the ABL Representative).

“Unrestricted Subsidiary” means any Subsidiary of the Borrower designated by the
Borrower as an Unrestricted Subsidiary pursuant to Section 6.17 that has not
subsequently been designated as a Restricted Subsidiary pursuant to
Section 6.17. As of the Closing Date, there are no Unrestricted Subsidiaries.

“Unsecured Cash Management Obligations” means unsecured obligations of Credit
Parties for Cash Management Products or Services.

“Wal-Mart” means Wal-Mart Stores, Inc., Wal-Mart Stores East, LP and Wal-Mart
Stores Texas, LLC, collectively.

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

 

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

“Yield Differential” has the meaning specified in Section 2.16(e)(ii).

Section 1.02 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Governing Document) shall be construed as referring to
such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

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

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

(d) Notwithstanding anything to the contrary in this Agreement, solely for the
purpose of (A) measuring the relevant financial ratios and basket availability
with respect to the incurrence of any Indebtedness (including any Incremental
Term Loans or Incremental Term Loan Commitments) or Liens or the making of any
Investments or (B) determining compliance with representations and warranties or
the occurrence of any Default or Event of Default, in each case, in connection
with a Limited Condition Acquisition, if the Borrower has made an LCA

 

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Election with respect to such Limited Condition Acquisition, the date of
determination of whether any such action is permitted hereunder, shall be deemed
to be the date on which 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 Fiscal Quarter 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, basket, representation or warranty, such
financial ratio, basket, representation or warranty shall be deemed to have been
complied with. 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 (other than any basket availability based
on a percentage of Consolidated EBITDA) on or following the relevant LCA Test
Date and prior to the earlier of (x) the date on which such Limited Condition
Acquisition is consummated or (y) the date that the definitive agreement for
such Limited Condition Acquisition is terminated or expires without consummation
of such Limited Condition Acquisition, any such financial ratio or basket
availability shall be calculated (and tested) (A) on a pro forma basis assuming
such Limited Condition Acquisition and other transactions in connection
therewith (including any incurrence of Indebtedness and the use of proceeds
thereof) have been consummated until such time as the applicable Limited
Condition Acquisition has actually closed or the definitive agreement with
respect thereto has been terminated and (B) on a standalone basis without giving
effect to such Limited Condition Acquisition and the other transactions in
connection therewith.

Section 1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the draft audited financial statements,
except as otherwise specifically prescribed herein. Notwithstanding the
foregoing, for purposes of determining compliance with any covenant (including
the computation of any financial covenant) contained herein, Indebtedness of the
Credit Parties and their Restricted Subsidiaries shall be deemed to be carried
at 100% of the outstanding principal amount thereof, and the effects of FASB ASC
825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio, negative covenant or requirement set forth
in any Loan Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio, negative covenant or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio, covenant or requirement made before and
after giving effect to such change in GAAP. Without limiting the foregoing, any
obligations of Parent, the Borrower and their Subsidiaries that were
characterized as operating leases as of, or would have been characterized in
accordance with GAAP as operating leases had such obligations existed as of,
December 30, 2018, shall be treated as operating leases for all purposes.

 

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Section 1.04 Rounding. Any financial ratios required to be maintained by any of
the Credit Parties pursuant to this Agreement shall be calculated by dividing
the appropriate component by the other component, carrying the result to one
place more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

Section 1.05 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

Section 1.06 Divisions. For all purposes under the Loan Documents, in connection
with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right,
obligation or liability of any Person becomes the asset, right, obligation or
liability of a different Person, then it shall be deemed to have been
transferred from the original Person to the subsequent Person, and (b) if any
new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Capital Stock
at such time.

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

Section 2.01 Loans.

(a) Initial Term Loans. Subject to the terms and conditions set forth herein,
each Initial Term Loan Lender severally agrees to make an Initial Term Loan to
the Borrower on the Closing Date in an aggregate amount equal to such Initial
Term Loan Lender’s Initial Term Loan Commitment. Amounts borrowed under this
Section 2.01(a) once paid or prepaid, may not be reborrowed.

(b) Incremental Term Loans. Subject to the terms and conditions set forth
herein, the terms and conditions for the making of any Incremental Term Loans
shall be set forth in the applicable Incremental Amendment. Any Incremental Term
Loans once paid or prepaid, may not be reborrowed.

(c) Refinancing Term Loans. Subject to the terms and conditions set forth
herein, the terms and conditions for the making of any Refinancing Term Loans
shall be set forth in the applicable Refinancing Amendment. Any Refinancing Term
Loans once paid or prepaid, may not be reborrowed.

(d) Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further
provided herein.

 

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Section 2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Borrowing and each conversion of Term Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
1:00 p.m. Eastern time (11:00 a.m. Mountain time, 10:00 a.m. Pacific time)
(x) three (3) Business Days prior to the requested date of any Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans or of any conversion of
Eurodollar Rate Loans to Base Rate Loans and (y) on the requested date of any
Borrowing of Base Rate Loans. Each telephone notice by the Borrower pursuant to
this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice appropriately completed and signed
by a member of Senior Management or Financial Officer of the Borrower, which may
be given by any Electronic Medium. Each such Loan Notice shall specify (i) the
requested date of the Borrowing or conversion, as applicable (which shall be a
Business Day), (ii) whether the Borrower is requesting a Borrowing or a
conversion of Term Loans from one Type to the other, (iii) the principal amount
of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (v) if applicable,
the duration of the Interest Period with respect thereto. If the Borrower fails
to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Loan Notice, but fail to specify an
Interest Period, the Borrower will be deemed to have specified an Interest
Period of one (1) month. The Borrower may not request more than one
(1) Borrowing on any Business Day.

(b) [Reserved].

(c) Eurodollar Rate Loans. Except as otherwise provided herein, a Eurodollar
Rate Loan that is a Term Loan may be continued or converted only on the last day
of an Interest Period for such Eurodollar Rate Loan. During the existence of a
Default, no Loans may be requested as, converted to or continued as Eurodollar
Rate Loans without the consent of the Required Lenders, and the Required Lenders
may demand that any or all of the outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans.

(d) Notice of Interest Rates. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for the applicable Eurodollar Rate Loans upon determination of such interest
rate. At any time that Base Rate Loans are outstanding and upon the request of
the Borrower or a Lender, the Administrative Agent shall notify the Borrower or
such Lender of rate used in determining the Base Rate with respect to such Base
Rate Loans then outstanding.

(e) Interest Periods. After giving effect to all Borrowings, all conversions of
Term Loans from one Type to the other, and all continuations of Term Loans as
the same Type, there shall not be more than five (5) Interest Periods in effect
at any time.

 

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Section 2.03 [Reserved].

Section 2.04 [Reserved].

Section 2.05 Prepayments; Repayments.

(a) Voluntary Prepayments. The Borrower may, upon notice to the Administrative
Agent pursuant to a Prepayment Notice, at any time voluntarily prepay the entire
amount of outstanding Term Loans in whole or in part; provided that such notice
must be received by the Administrative Agent not later than 11:00 a.m. Eastern
time (9:00 am Mountain time) three (3) Business Days prior to any such date of
prepayment (or in the case of any Term Loans prepaid that are Base Rate Loans,
one (1) Business Day) prior to any such date of prepayment. Each such notice
shall specify the date, amount of such prepayment and the Class of the Term
Loans to be prepaid. The Administrative Agent will promptly notify each
applicable Term Loan Lender of its receipt of each such notice, and of the
amount of such Term Loan Lender’s Applicable Percentage of such prepayment. If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of the Term Loans shall be accompanied by
all accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05. The Administrative Agent shall apply any such
prepayments as directed by the Borrower (or absent such direction, pro rata as
among each Class of Term Loans and in direct order of maturity of any remaining
principal payments with respect to such Term Loans).

(b) [Reserved].

(c) Asset Dispositions. No later than the fifth (5th) Business Day following
receipt by any Credit Party or any Restricted Subsidiaries of Net Cash Proceeds
from any asset disposition (excluding Permitted Asset Dispositions (other than
any asset disposition under Sections 7.05(b)(viii) and 7.05(b)(ix))), the
Borrower shall prepay the Term Loans in an amount equal to 100% of such Net Cash
Proceeds so received to the extent such Net Cash Proceeds (when combined with
any Net Cash Proceeds received from any Casualty Events (other than with respect
to Net Cash Proceeds of identifiable proceeds of ABL Priority Collateral))
exceeds $4,000,000 per Fiscal Year; provided, the Borrower shall have the
option, directly or through one or more of its Restricted Subsidiaries, to
invest such Net Cash Proceeds within 360 days of receipt thereof (or 540 days of
receipt thereof if the Borrower or any of its Restricted Subsidiaries enters
into a legally binding commitment within 360 days of receipt of such Net Cash
Proceeds to invest such Net Cash Proceeds) in assets of the type used in the
business of the Credit Parties and their Restricted Subsidiaries. In the event
that such Net Cash Proceeds are not reinvested by the Borrower prior to the last
day of such 360 day period or 540 day period, as the case may be, the Borrower
shall prepay the Term Loans in an amount equal to such Net Cash Proceeds as set
forth in Section 2.05(h).

(d) Casualty Events. No later than the fifth (5th) Business Day following
receipt by any Credit Party or any Restricted Subsidiaries of Net Cash Proceeds
from any Casualty Events (other than with respect of Net Cash Proceeds of
identifiable proceeds of ABL Priority Collateral), the Borrower shall prepay the
Term Loans in an amount equal to 100% of such Net Cash Proceeds so received to
the extent such Net Cash Proceeds (when combined with any Net Cash Proceeds
received from any asset dispositions (excluding Permitted Asset Dispositions

 

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(other than any asset disposition under Section 7.05(b)(viii) and 7.05(b)(ix)))
exceeds $4,000,000 per Fiscal Year; provided, the Borrower shall have the
option, directly or through one or more of its Restricted Subsidiaries, to
invest such Net Cash Proceeds within 360 days of receipt thereof (or 540 days of
receipt thereof if the Borrower or any of its Restricted Subsidiaries enters
into a legally binding commitment within 360 days of receipt of such Net Cash
Proceeds to invest such Net Cash Proceeds) in assets of the type used in the
business of the Credit Parties and their Restricted Subsidiaries. In the event
that such Net Cash Proceeds are not reinvested by the Borrower prior to the last
day of such 360 day period or 540 day period, as the case may be, the Borrower
shall prepay the Term Loans in an amount equal to such Net Cash Proceeds as set
forth in Section 2.05(h).

(e) [Reserved].

(f) Incurrence of Indebtedness. Immediately upon the incurrence or issuance by
any Credit Party or any of its Restricted Subsidiaries of any Indebtedness other
than Indebtedness of the type described in Sections 7.02 (other than
Section 7.02(l)), the Borrower shall prepay the Term Loans in an amount equal to
100% of such Net Cash Proceeds so received as set forth in Section 2.05(h).

(g) Excess Cash Flow Recapture. After the end of each Fiscal Year, starting with
the Fiscal Year ended December 31, 2020, the Borrower shall prepay the
Obligations in an amount equal to the Applicable ECF Percentage of the Excess
Cash Flow for such Fiscal Year; provided, that such prepayment shall be required
only if the amount required to be prepaid for such Fiscal Year is greater than
$4,000,000 (with only such excess amount being subject to prepayment). The
Borrower shall make such payment on the date that is ten (10) days after the
earlier of (i) the date on which the Borrower deliver their annual audited
financial statements for such Fiscal Year to the Administrative Agent pursuant
to Section 6.04(a) and (ii) the date on which the Borrower is required to
deliver such financial statements pursuant to Section 6.04(a).

(h) Application. The Administrative Agent shall apply such prepayment pursuant
to this Section 2.05 on a pro rata basis as among each Class of Term Loans
(unless a Class of Term Loans has agreed to receive less than a pro rata share
of any such prepayments) and, with respect to each such Class, to the
outstanding principal amount of the Term Loans in the direct order of maturity;
provided, that if at any time the amount required to be paid pursuant to
Section 2.05(c), (d) or (g), the Borrower is required to offer to repurchase or
prepay Indebtedness secured on a pari passu basis with the Obligations pursuant
to the terms of the documentation governing such Indebtedness with any Net Cash
Proceeds or with any Excess Cash Flow (such pari passu Indebtedness required to
be offered to be so repurchased or prepaid, the “Other Applicable
Indebtedness”), then the Borrower may apply such Net Cash Proceeds or Excess
Cash Flow on a pro rata basis (determined on the basis of the aggregate
principal amount of the Term Loans and Other Applicable Indebtedness at such
time; provided, that the portion of Net Cash Proceeds or Excess Cash Flow
allocated to the Other Applicable Indebtedness shall not exceed the amount of
such Net Cash Proceeds or Excess Cash Flow required to be allocated to such
Other Applicable Indebtedness pursuant to the terms thereof, and the remaining
amount, if any, of such Net Cash Proceeds or Excess Cash Flow shall be allocated
to the Term Loans in accordance with the terms hereof) to the prepayment of the
Term Loans and to the repurchase or prepayment of Other Applicable Indebtedness
and the amount of prepayment of the Term Loans that would otherwise

 

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have been required pursuant to this Section 2.05 shall be reduced accordingly;
provided, further, that to the extent that holders of Other Applicable
Indebtedness decline to have such Indebtedness purchased or prepaid, the
declined amount shall promptly be applied to prepay the Term Loans in accordance
with the terms hereof.

(i) Prepayment Premium. In the event a Prepayment Premium Event occurs within
six (6) months after the Closing Date, the Borrower shall pay to the
Administrative Agent, for the ratable account of the Initial Term Loan Lenders,
a fee equal to 1.00% of the aggregate principal amount of the Initial Term Loans
subject to such Prepayment Premium Event concurrent with the prepayment or
repayment of such Initial Term Loans. If, on or prior to the date that is six
(6) months after the Closing Date, all or any portion of the Initial Term Loans
held by any Lender are prepaid, repaid, refinanced, substituted or replaced
pursuant to Section 10.13 as a result of, or in connection with, such Lender not
agreeing or otherwise consenting to any waiver, consent or amendment in
connection with a Prepayment Premium Event, such prepayment, repayment,
substitution or replacement will be made at 101.0% of the principal amount so
prepaid, repaid, refinanced, substituted or replaced.

Section 2.06 Termination or Reduction of Commitments.

The Initial Term Loan Commitments shall be automatically and permanently reduced
to zero upon the making of the Initial Term Loans on the Closing Date. Any
Incremental Term Loan Commitments shall be automatically and permanently reduced
to zero in accordance with the applicable Incremental Amendment. Any Refinancing
Term Loan Commitments shall be automatically and permanently reduced to zero in
accordance with the applicable Refinancing Amendment.

Section 2.07 Repayment of Loans.

In addition to the repayment of the Loans pursuant to Sections 2.05, the
Borrower shall repay to the Administrative Agent, on behalf of the Term Loan
Lenders, the principal amount of the Term Loans as follows:

(a) with respect to the Initial Term Loans, on the first Business Day following
the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending
December 31, 2019 and for each Fiscal Quarter thereafter ending prior to the
Maturity Date with respect to the Initial Term Loans, in each case, an amount
equal to 0.25% of the original principal amount of the Initial Term Loans on the
Closing Date (as such payments may be reduced from time to time as a result of
the application of prepayment in accordance with Section 2.05 or increased as a
result of any increase in the amount of Initial Term Loans in accordance with
Section 2.16);

(b) with respect to any Incremental Term Loans, as set forth in the applicable
Incremental Amendment and with respect to any Refinancing Term Loans, as set
forth in the applicable Refinancing Amendment; and

(c) with respect to all Term Loans, on the Maturity Date applicable to such Term
Loans, a final payment of the remaining outstanding principal amount of such
Term Loans.

 

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Section 2.08 Interest.

(a) Subject to the provisions of subsection (b) below: (i) each Term Loan that
is a Base Rate Loan shall bear interest on the outstanding principal amount
thereof for each day on which it is outstanding at a rate per annum equal to the
Base Rate plus the Applicable Margin; and (ii) each Term Loan that is a
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined by the Administrative Agent
for such Interest Period plus the Applicable Margin.

(b) Automatically following the occurrence and during the continuance of an
Event of Default under Sections 8.01(a) or (e), overdue principal or interest of
any Loan shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate plus the interest rate applicable from
time to time thereafter to such Loans (whether the Base Rate or the Eurodollar
Rate) and overdue amounts in respect of fees and other amounts shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate plus the Base Rate, in each case, to the fullest extent permitted
by applicable Laws.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest accruing at the Default Rate shall be due and payable to the
Administrative Agent on demand by the Administrative Agent. Interest hereunder
shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.

(d) Interest on each Loan shall be paid directly to the Administrative Agent and
applied in accordance with the terms hereof.

Section 2.09 Fees.

The Borrower shall pay to the Administrative Agent the fees in the amounts and
at the times specified in the Fee Letter. All such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

Section 2.10 Computation of Interest and Fees. All computations of interest for
Base Rate Loans determined by reference to “Prime Rate” shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more interest being paid
than if computed on the basis of a 365-day year). Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made shall,
subject to Section 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

 

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Section 2.11 Evidence of Debt. The Credit Extensions made by each Lender shall
be evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrower and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, amount and maturity of its Loans and payments with respect thereto.

Section 2.12 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 12:00 p.m.
Eastern time (10:00 am Mountain time) on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office. All
payments received by the Administrative Agent after 12:00 p.m. Eastern time
(10:00 am Mountain time) shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day (unless otherwise
provided herein), and such extension of time shall be reflected in computing
interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Agents. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing of Loans that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.02 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agrees to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to such Loans made. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative

 

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Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period. If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall
be without prejudice to any claim the Borrower may have against a Lender that
shall have failed to make such payment to the Administrative Agent.

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

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds promptly (in like funds as received from such
Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 10.04(c) are several and not
joint. The failure of any Lender to make any Loan or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan or
to make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

Section 2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall

 

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(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts
owing them, provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant, other than to Parent, the Borrower or any Subsidiary of
the Parent (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

Section 2.14 Collateral and Guarantees.

(a) Collateral. The Loans and the other Obligations shall be secured by valid,
first priority, perfected and enforceable Liens in favor of the Administrative
Agent, for the benefit of the holders of the Obligations, in all of the
Collateral subject to the terms of the Security Documents.

(b) Guarantees. Payment of the Loans and the other Obligations shall be
unconditionally guaranteed by each Guarantor subject to the terms of the
Guarantees.

(c) Further Assurances. Each Credit Party covenants and agrees that it shall,
and shall cause each of its Restricted Subsidiaries party to the Security
Documents to, comply with all terms and conditions of each of the Security
Documents and that each Credit Party shall, and shall cause each of its
Restricted Subsidiaries party to the Security Documents to, at any time and from
time to time at the request of the Administrative Agent or the Required Lenders
execute and deliver such instruments and documents and do such acts and things
as the Administrative Agent or the Required Lenders may reasonably request in
order to provide for or protect or perfect the Lien of the Administrative Agent
in the Collateral subject to the terms of the Security Documents.

Section 2.15 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in this Agreement or any
other Loan Document or in any other agreement, arrangement or understanding
among any such parties, each party hereto acknowledges that any liability of any
EEA Financial Institution arising under this Agreement or any other Loan
Document, to the extent such liability is unsecured, may be subject to the
write-down and conversion powers of an EEA Resolution Authority and agrees and
consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

 

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(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

Section 2.16 Incremental Credit Extension.

(a) Incremental Commitments. The Borrower may at any time or from time to time
after the Closing Date, by written notice to the Administrative Agent (whereupon
the Administrative Agent shall promptly deliver a copy to each of the Lenders)
(an“ Incremental Loan Request”), request the establishment of one or more new
commitments which may be in the same Term Loan Facility as any outstanding Term
Loans of an existing Class of Term Loans (a “Term Loan Increase”) or a new Class
of Term Loans (collectively with any Term Loan Increase, the “Incremental Term
Loan Commitments”) in an aggregate principal amount not to exceed, as of any
date of determination, the Incremental Amount.

(b) Incremental Term Loans. Any Incremental Term Loan Commitments effected
through the establishment of one or more new Term Loans made on an Incremental
Facility Closing Date shall be designated for all purposes of this Agreement as
either (x) a new Class of Incremental Term Loan Commitments or (y) an increase
to an existing Class of Commitments. On any Incremental Facility Closing Date on
which any Incremental Term Loan Commitments of any Class are effected (including
through any Term Loan Increase), subject to the satisfaction of the terms and
conditions in this Section 2.16, (i) each Incremental Term Loan Lender of such
Class shall make a Loan to the Borrower (an “Incremental Term Loan”) in an
amount equal to its Incremental Term Loan Commitment of such Class and (ii) each
Incremental Term Loan Lender of such Class shall become a Lender hereunder with
respect to the Incremental Term Loan Commitment of such Class and the
Incremental Term Loans of such Class made pursuant thereto. Notwithstanding the
foregoing, any Incremental Term Loans may be treated as part of the same Class
as any other Term Loans if such Incremental Term Loans are fungible for United
States federal income tax purposes with such other Term Loans.

 

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(c) Incremental Loan Request. Each Incremental Loan Request from the Borrower
pursuant to this Section 2.16 shall set forth the requested amount and proposed
terms of the relevant Incremental Term Loans. Incremental Term Loans may be made
by any existing Lender (but no existing Lender will have an obligation to make
any Incremental Term Loan Commitment, nor will the Borrower have any obligation
to approach any existing Lenders to provide any Incremental Term Loan
Commitment) or by any other bank or other financial institution (any such other
bank or other financial institution being called an “Additional Lender”) (each
such existing Lender or Additional Lender providing such, an “Incremental Term
Loan Lender”); provided that (i) the Administrative Agent shall have consented
(not to be unreasonably withheld or delayed) to such Lender’s or Additional
Lender’s making such Incremental Term Loans to the extent such consent, if any,
would be required under Section 10.06(b)(iii) for an assignment of Loans to such
Lender or Additional Lender and (ii) any such Additional Lender is an Eligible
Assignee.

(d) Effectiveness of Incremental Amendment. The effectiveness of any Incremental
Amendment, and the Incremental Term Loan Commitments thereunder, shall be
subject to the satisfaction on the date thereof (the “Incremental Facility
Closing Date”) of each of the following conditions:

(i) subject to Section 1.02(d), no Default or Event of Default shall have
occurred and be continuing or would exist before and after giving effect to such
Incremental Term Loan Commitments and such Incremental Term Loans;

(ii) subject to Section 1.02(d), before and after giving effect to such
Incremental Term Loan Commitments and the Incremental Term Loans thereunder, the
conditions of Section 4.02(a) shall be satisfied;

(iii) [reserved];

(iv) each Incremental Term Loan Commitment shall be in an aggregate principal
amount that is not less than $5,000,000 and shall be in an increment of
$1,000,000 (provided that such amount may be less than $1,000,0000 if such
amount represents all remaining availability under the limit set forth in
Section 2.16(a));

(v) to the extent reasonably requested by the Administrative Agent, the
Administrative Agent shall have received (A) customary legal opinions addressed
to the Administrative Agent and the Lenders, board resolutions and officers’
certificates consistent with those delivered on the Closing Date other than
changes to such legal opinion resulting from a Change in Law, change in fact or
change to counsel’s form of opinion reasonably satisfactory to the
Administrative Agent and (B) reaffirmation agreements and/or such amendments to
the Security Documents (including modifications to the Mortgages), as may be
reasonably requested by the Administrative Agent in order to ensure that the
enforceability of the Security Documents and the perfection and priority of the
Liens thereunder are preserved and maintained; and

(vi) such other conditions as the Borrower, each Incremental Term Loan Lender
providing such Incremental Term Loan Commitments and the Administrative Agent
shall agree.

 

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(e) Required Terms. The terms, provisions and documentation of the Incremental
Term Loans and Incremental Term Loan Commitments, as the case may be, of any
Class shall be as agreed between the Borrower and the applicable Incremental
Term Loan Lenders providing such Incremental Term Loan Commitments, and except
as otherwise set forth herein, to the extent not identical to the Term Loans
existing on the Incremental Facility Closing Date, shall be materially no more
favorable to the Incremental Term Loan Lenders providing such Incremental Term
Loans than the terms, provisions and documentation of the Term Loans existing on
the Incremental Facility Closing Date to the then-existing Term Loan Lenders
(except for terms, provisions or documentation applicable only after the latest
maturity date of any then-existing Term Loans or such terms, provisions or
documentation are added for the benefit of all Lenders hereunder), as reasonably
determined by the Borrower. In any event,

(i) the Incremental Term Loans:

(A) shall be secured only by the Collateral and rank pari passu in right of
payment and of security with the Term Loans and shall not be guaranteed by any
Person that is not a Guarantor;

(B) shall not mature earlier than the latest maturity date of any Term Loans
outstanding at the time of incurrence of such Incremental Term Loans; provided
that, at no time shall there be Term Loans hereunder (including Incremental Term
Loans) which have more than three different Maturity Dates;

(C) shall have a Weighted Average Life to Maturity no shorter than the remaining
Weighted Average Life to Maturity of any Term Loans outstanding at the time of
incurrence of such Incremental Term Loans;

(D) subject to Section 2.16(e)(i)(B) above and Section 2.16(e)(ii) below, shall
have an applicable rate and amortization determined by the Borrower and the
applicable Incremental Term Loan Lenders; and

(E) may participate on a pro rata basis or less than pro rata basis (but not on
a greater than pro rata basis) in any voluntary or mandatory prepayments of Term
Loans hereunder, as specified in the applicable Incremental Amendment; and

(ii) subject to the foregoing, the amortization schedule applicable to any
Incremental Term Loans and the Effective Yield applicable to the Incremental
Term Loans of each Class shall be determined by the Borrower and the applicable
Incremental Term Loan Lenders and shall be set forth in each applicable
Incremental Amendment; provided, however, that with respect to any Loans under
Incremental Term Loan Commitments denominated in the U.S. Dollars, if the
Effective Yield applicable to such Incremental Term Loans shall be greater than
the applicable Effective Yield payable pursuant to the terms of this Agreement
as amended through the date of such calculation with respect to any
then-existing Term Loans by more than 50 basis points per annum (the amount of
such excess, the “Yield Differential”), then the interest rate with respect to
each Class of such then-existing Term Loans shall be increased by the applicable
Yield Differential.

 

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(f) Incremental Amendment.

(i) Incremental Term Loan Commitments shall become Commitments under this
Agreement pursuant to an amendment to this Agreement (an “Incremental
Amendment”) and, as appropriate, amendments to the other Loan Documents,
executed by the Borrower, each Incremental Term Loan Lender providing such
Commitments and the Administrative Agent, as applicable. The Incremental
Amendment may, without the consent of any other Credit Party or Lender, effect
such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the reasonable opinion of the Administrative Agent
and the Borrower, to effect the provisions of this Section 2.16. The Borrower
will use the proceeds of the Incremental Term Loans for any purpose not
prohibited by this Agreement. No Lender shall be obligated to provide any
Incremental Term Loans unless it so agrees.

(ii) The Lenders hereby irrevocably authorize the Administrative Agent to enter
into amendments to this Agreement and the other Loan Documents with the Credit
Parties as may be necessary in order to establish new tranches or sub-tranches
in respect of Loans or Commitments made or established pursuant to this
Section 2.16 and such technical amendments as may be necessary or appropriate in
the reasonable opinion of the Administrative Agent and the Borrower in
connection with the establishment of such new tranches or sub-tranches, in each
case on terms consistent with this Section 2.16, including any amendments that
are not adverse to the interests of any Lender that are made to effectuate
changes necessary to enable any Incremental Term Loans to be fungible for United
States federal income tax purposes with the another Class of Term Loans, which
shall include any amendments that do not reduce the ratable amortization
received by each Lender thereunder.

(g) This Section 2.16 shall supersede any provisions in Section 10.01 to the
contrary.

Section 2.17 Refinancing Amendments.

(a) On one or more occasions after the Closing Date, the Borrower may obtain,
from any Lender or any other bank or financial institution that agrees to
provide any portion of Refinancing Term Loans pursuant to a Refinancing
Amendment in accordance with this Section 2.17 (each, an “Additional Refinancing
Lender”); provided that the Administrative Agent shall have consented (such
consent not to be unreasonably withheld or delayed) to such Lender’s or
Additional Refinancing Lender’s making such Refinancing Term Loans to the extent
such consent, if any, would be required under Section 10.06(b)(iii) for an
assignment of Loans to such Lender or Additional Refinancing Lender and such
Additional Refinancing Lender is an Eligible Assignee; provided, further, that
any Refinancing Term Loans may participate on a pro rata basis or on a less than
pro rata basis (but not on a greater than pro rata basis) as among the various
Classes of Term Loans (in accordance with the respective outstanding principal
amounts thereof) in any voluntary or mandatory repayments or prepayments of Term
Loans hereunder, as specified in the applicable Refinancing Amendment;

 

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(b) The effectiveness of any Refinancing Amendment shall be subject to the
satisfaction on the date thereof of each of the conditions set forth in
Section 4.02 and, to the extent reasonably requested by the Administrative
Agent, receipt by the Administrative Agent of

(i) customary legal opinions, board resolutions and officers’ certificates
consistent with those delivered on the Closing Date other than changes to such
legal opinion resulting from a Change in Law, change in fact or change to
counsel’s form of opinion reasonably satisfactory to the Administrative Agent
and

(ii) reaffirmation agreements and/or such amendments to the Security Documents
(including modifications to the Mortgages) as may be reasonably requested by the
Administrative Agent in order to ensure that the enforceability of the Security
Documents and the perfection and priority of the Liens thereunder are preserved
and maintained.

(c) Each issuance of Credit Agreement Refinancing Indebtedness under
Section 2.17(a) shall be in an aggregate principal amount that is not less than
$5,000,000.

(d) Each of the parties hereto hereby agrees that this Agreement and the other
Loan Documents may be amended pursuant to a Refinancing Amendment, without the
consent of any other Lenders, to the extent (but only to the extent) necessary
to (i) reflect the existence and terms of the Credit Agreement Refinancing
Indebtedness incurred pursuant thereto and (ii) effect such other amendments to
this Agreement and the other Loan Documents as may be necessary or appropriate,
in the reasonable opinion of the Administrative Agent and the Borrower, to
effect the provisions of this Section 2.17, and the Lenders hereby expressly
authorize the Administrative Agent to enter into any such Refinancing Amendment.

(e) This Section 2.17 shall supersede any provisions in Section 10.01 to the
contrary.

Section 2.18 Loan Account.

(a) The Administrative Agent shall maintain in accordance with its usual and
customary practices an account or accounts (the “Loan Account”) evidencing the
Indebtedness of the Borrower resulting from each Term Loan from time to time.
Any failure of the Administrative Agent to record anything in the Loan Account,
or any error in doing so, shall not limit or otherwise affect the obligation of
the Borrower to pay any amount owing hereunder.

(b) Entries made in the Loan Account shall constitute presumptive evidence of
the information contained therein. If any information contained in the Loan
Account is provided to or inspected by any Person, then such information shall
be conclusive and binding on such Person for all purposes absent manifest error,
except to the extent such Person notifies the Administrative Agent in writing
within thirty (30) days after receipt or inspection that specific information is
subject to dispute.

 

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ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes. Any and all payments by or on account of any obligation of any Credit
Party under any Loan Document shall be made without deduction or withholding for
any Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in the good faith discretion of the Administrative Agent) require the
deduction or withholding of any Tax from any such payment by the Administrative
Agent or a Credit Party, then the Administrative Agent or such Credit Party
shall be entitled to make such deduction or withholding and shall timely pay the
full amount withheld or deducted to the relevant Governmental Authority in
accordance with applicable Laws, and if such Taxes are Indemnified Taxes, the
sum payable by the applicable Credit Party shall be increased as necessary so
that after any required withholding or the making of all required deductions
(including withholdings and deductions applicable to additional sums payable
under this Section 3.01) the applicable Recipient receives an amount equal to
the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Credit Parties. Without limiting the
provisions of subsection (a) above, the Credit Parties shall timely pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of the Administrative Agent timely reimburse the Administrative Agent for
the payment of, any Other Taxes.

(c) Tax Indemnifications.

(i) Each of the Credit Parties shall, and does hereby, jointly and severally
indemnify each Recipient, and shall make payment in respect thereof within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 3.01) payable or paid by such Recipient or required
to be withheld or deducted from a payment to such Recipient, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error. Each of the
Credit Parties shall, and do hereby, jointly and severally indemnify the
Administrative Agent, and shall make payment in respect thereof within 10 days
after demand therefor, for any amount which a Lender for any reason fails to pay
indefeasibly to the Administrative Agent as required pursuant to
Section 3.01(c)(ii) below.

(ii) To the extent required by any applicable Laws, the Administrative Agent may
withhold from any payment to any Lender an amount equivalent to any applicable
withholding Tax. Without limiting the provisions of this Section 3.01, each
Lender shall, and does hereby, severally indemnify, and shall make payment in
respect thereof within 10 days after demand therefor, (x) the Administrative
Agent against any Indemnified Taxes attributable to such Lender (but only to the
extent that any Credit Party has not already indemnified the Administrative
Agent for such Indemnified Taxes and without limiting the obligation of the
Credit Parties to do so), (y) the Administrative Agent and the Credit Parties,
as applicable, against any Taxes attributable to such Lender’s failure to comply
with the provisions of Section 10.06(d) relating to the maintenance of a

 

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Participant Register and (z) the Administrative Agent against any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under this Agreement
or any other Loan Document against any amount due to the Administrative Agent
under this clause (ii).

(d) Evidence of Payments. As soon as practicable after any payment of Taxes by a
Credit Party to a Governmental Authority as provided in this Section 3.01, such
Credit Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of any return required by Laws to report such payment or
other evidence of such payment reasonably satisfactory to the Administrative
Agent.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment, such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax (or any substantively comparable subsequent versions thereof or
successors thereto);

 

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

(I) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E
(or any substantively comparable subsequent versions thereof or successors
thereto) establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or W-8BEN-E (or any substantively comparable subsequent versions
thereof or successors thereto) establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such tax treaty;

(II) executed copies of IRS Form W-8ECI or W-8EXP (or any substantively
comparable subsequent versions thereof or successors thereto);

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 871(h) or 881(c) of the Code, a certificate
substantially in the form of Exhibit H-1 (a “U.S. Tax Compliance Certificate”),
and executed copies of IRS Form W-8BEN or W-8BEN-E (or any substantively
comparable subsequent versions thereof or successors thereto); or

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

 

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(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

(iii) Each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its
legal inability to do so.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender, or have any obligation to pay to any Lender, any
refund of Taxes withheld or deducted from funds paid for the account of such
Lender. If any Recipient determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified by any Credit Party or with respect to which any Credit Party has
paid additional amounts pursuant to this Section 3.01, it shall pay to the
Credit Party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by a Credit Party under this
Section 3.01 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) incurred by such Recipient, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Credit Party, upon the request
of the Recipient, agrees to repay the amount paid over to the Credit Party (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Recipient in the event the Recipient is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection, in no event will the applicable Recipient be required to pay
any amount to the Credit Party pursuant to this subsection the payment of which
would place the Recipient in a less favorable net after-Tax position than such
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indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This subsection shall not be construed
to require any Recipient to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to any Credit
Party or any other Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all other Obligations.

Section 3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to perform any of its
obligations hereunder or make, maintain or fund, or charge interest with respect
to any Credit Extension, or to determine or charge interest rates, in each case,
based upon the Eurodollar Rate, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the London interbank market, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, (a) any
obligation of such Lender to issue, make, maintain, fund or charge interest with
respect to any such Credit Extension or continue Loans at the Eurodollar Rate
shall be suspended and (b) if such notice asserts the illegality of such Lender
making or maintaining Base Rate Loans the interest rate on which is determined
by reference to the Eurodollar Rate component of the Base Rate, the interest
rate on such Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Administrative Agent without reference to the
Eurodollar Rate component of Base Rate, in each case, until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist. Upon receipt of such notice, (x) the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such
Lender shall, if necessary to avoid such illegality, be determined by the
Administrative Agent without reference to the Eurodollar Rate component of the
Base Rate), either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day,
or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans and (y) if such notice asserts the illegality of such
Lender determining or charging interest rates based upon the Eurodollar Rate,
the Administrative Agent shall during the period of such suspension compute the
Base Rate applicable to such Lender without reference to the Eurodollar Rate
component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge
interest rates based upon the Eurodollar Rate. Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.

Section 3.03 Inability to Determine Rates.

(a) If the Administrative Agent determines in connection with any request for a
Loan that (a) (i) Dollar deposits are not being offered to banks in the London
interbank eurodollar market for the applicable amount and/or for Interest Period
of such Eurodollar Rate Loan or (ii) adequate and reasonable means do not exist
for determining the Eurodollar Rate or (b) the

 

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Eurodollar Rate with respect to a proposed Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender. Thereafter, (x) the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended (to the extent of the affected Eurodollar Rate Loans or Interest
Periods) and (y) in the event of a determination described in the preceding
sentence with respect to the Eurodollar Rate component of the Base Rate, the
utilization of the Eurodollar Rate component in determining the Base Rate shall
be suspended, in each case until the Administrative Agent upon the instruction
of the Required Lenders revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a borrowing of, conversion to or
continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar
Rate Loans or Interest Periods) or, failing that, will be deemed to have
converted such request into a request for Base Rate Loans in the amount
specified therein.

(b) Notwithstanding anything to the contrary herein or in any other Loan
Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, the Administrative Agent and the Borrower may amend
this Agreement to replace the Eurodollar Rate with a Benchmark Replacement. Any
such amendment with respect to a Benchmark Transition Event will become
effective at 5:00 p.m. on the fifth (5th) Business Day after the Administrative
Agent has posted such proposed amendment to all Lenders and the Borrower so long
as the Administrative Agent has not received, by such time, written notice of
objection to such amendment from Lenders comprising the Required Lenders. Any
such amendment with respect to an Early Opt-in Election will become effective on
the date that Lenders comprising the Required Lenders have delivered to the
Administrative Agent written notice that such Required Lenders accept such
amendment. No replacement of the Eurodollar Rate with a Benchmark Replacement
pursuant to this paragraph will occur prior to the applicable Benchmark
Transition Start Date.

(c) In connection with the implementation of a Benchmark Replacement, the
Administrative Agent will have the right to make Benchmark Replacement
Conforming Changes from time to time and, notwithstanding anything to the
contrary herein or in any other Loan Document, any amendments implementing such
Benchmark Replacement Conforming Changes will become effective without any
further action or consent of any other party to this Agreement.

(d) The Administrative Agent will promptly notify the Borrower and the Lenders
of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, and its related Benchmark Replacement Date and
Benchmark Transition Start Date, (ii) the implementation of any Benchmark
Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming
Changes and (iv) the commencement or conclusion of any Benchmark Unavailability
Period. Any determination, decision or election that may be made by the
Administrative Agent or Lenders pursuant to this Section, including any
determination with respect to a tenor, rate or adjustment or of the occurrence
or non-occurrence of an event, circumstance or date and any decision to take or
refrain from taking any action, will be conclusive and binding absent manifest
error and may be made in its or their sole discretion and without consent from
any other party hereto, except, in each case, as expressly required pursuant to
this Section.

 

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(e) Upon the Borrower’s receipt of notice of the commencement of a Benchmark
Unavailability Period, the Borrower may revoke any request for a Eurodollar
Borrowing of, conversion to or continuation of Eurodollar Rate Loans to be made,
converted or continued during any Benchmark Unavailability Period and, failing
that, the Borrower will be deemed to have converted any such request into a
request for a Borrowing of or conversion to Base Rate Loans. During any
Benchmark Unavailability Period, the component of the Base Rate based upon the
Eurodollar Rate will not be used in any determination of the Base Rate.

Section 3.04 Increased Costs.

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

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, continuing or maintaining any Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender, as the case may be, for such additional costs incurred or reduction
suffered.

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

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

 

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(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

Section 3.05 Compensation for Losses. Upon demand of any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of (a) any continuation, payment or
prepayment of any Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration or otherwise); (b) any failure by the Borrower (for a reason other
than the failure of such Lender to make a Loan) to prepay or borrow any Loan on
the date or in the amount notified by the Borrower or (c) any assignment of a
Loan on a day other than the last day of the Interest Period therefor as a
result of a request by the Borrower pursuant to Section 10.13, including any
loss of anticipated profits and any loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain such Loan or from fees
payable to terminate the deposits from which such funds were obtained (all of
such losses, costs or expenses, together with any administrative fees referred
to in the following sentence, are referred to herein collectively as the
“Breakage Costs”). The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing. For purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section 3.05, each Lender shall be deemed to have funded each Loan made by it at
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Loan was in fact so funded.

Section 3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or requires the Borrower to pay any Indemnified
Taxes or additional amounts to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, or if any Lender gives a notice
pursuant to Section 3.02, then at the request of the Borrower such Lender shall
use reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.02, as applicable, and
(ii) in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

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(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01 and, in each case, such Lender has
declined or is unable to designate a different lending office in accordance with
Section 3.06(a), the Borrower may replace such Lender in accordance with
Section 10.13.

Section 3.07 Survival. All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder and resignation of the Administrative Agent.

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

Section 4.01 Conditions to the Closing Date. The obligation of each Lender to
make any Credit Extension hereunder is subject to satisfaction of the following
conditions on or prior to the date hereof to the satisfaction of the
Administrative Agent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimile or other electronic image transmission (e.g., “PDF” or
“TIF” via electronic mail) copies (followed promptly by originals) unless
otherwise specified, each properly executed by a member of the Senior Management
of the signing Credit Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date):

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent and the Borrower;

(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

(iii) an officer’s certificate of each Credit Party executing a Loan Document:

(A) attaching: (1) the certificate or articles of incorporation or memorandum
and articles of association (or such equivalent thereof) of such Credit Party;
and (2) the by-laws, limited liability company agreement, partnership agreement
or other applicable Governing Document of such Credit Party;

(B) certifying and attaching true, correct and complete copies of the
resolutions or votes of the board of directors or board of managers (or
equivalent thereof) of such Credit Party, authorizing such Credit Party’s entry
into the Loan Documents to which it is a party; and

(C) certifying the incumbency of members of the Senior Management of such Credit
Party authorized to act in connection with this Agreement and the other Loan
Documents to which such Credit Party is a party and providing a specimen
signature of such members of the Senior Management of such Credit Party who will
be signing Loan Documents on the Closing Date and thereafter;

 

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(iv) such documents and certifications as the Administrative Agent may require
to evidence that each Credit Party executing a Loan Document is validly
existing, in good standing and qualified to engage in business (A) in its
jurisdiction of incorporation or formation, as applicable, and (B) in each other
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification in such jurisdiction;

(v) favorable legal opinions of counsel to the Credit Parties addressed to the
Administrative Agent and each Lender, as to matters concerning the Credit
Parties and the Loan Documents as the Administrative Agent may reasonably
request;

(vi) a certificate of a member of the Senior Management of the Borrower
certifying that (A) the conditions specified in Sections 4.01(b), (h), (m) and
(n) have been satisfied and (B) from the date of the Perrigo Acquisition
Agreement through the Closing Date, there has been no event, change,
circumstance, effect, occurrence, condition, state of facts or development that
has had or would reasonably be expected to have, either individually or in the
aggregate, a Closing Date Material Adverse Effect;

(b) The Perrigo Acquisition shall have been or, substantially concurrently with
the initial funding of the Initial Term Loans be, consummated in accordance with
the terms of the Perrigo Acquisition Agreement. The Perrigo Acquisition
Agreement shall not have been amended or waived in any material respect by the
Borrower or any of its Affiliates, nor shall the Borrower or any of its
Affiliates have given a material consent thereunder, in each case in a manner
materially adverse to the Lenders (in their capacity as such) without consent of
the Administrative Agent (such consent not to be unreasonably withheld, delayed
or conditioned); provided, that

(i) any amendment, modification or waiver to the definition of Closing Date
Material Adverse Effect or any action taken by or at the express request of the
Buyer (as defined in the Perrigo Acquisition Agreement) that would be a Material
Adverse Effect but for clause (e) of the definition of “Material Adverse Effect”
(as defined in the Perrigo Acquisition Agreement) shall be deemed to be
materially adverse to the Lenders,

(ii) any reduction in the purchase price of less than 10% or in accordance with
the Perrigo Acquisition Agreement pursuant to any working capital or purchase
price (or similar) adjustment provision set forth in the Perrigo Acquisition
Agreement shall be deemed not to be materially adverse to the Lenders,

(iii) any other reduction in the purchase price shall be deemed not to be
materially adverse to the Lenders so long as such decrease is allocated to
reduce the Initial Term Loan Facility on a dollar for dollar basis and

(iv) any increase in the purchase price shall be deemed not to be materially
adverse so long as such increase is funded with qualified equity or such
increase is pursuant to any working capital or purchase price (or similar)
adjustment provision set forth in the Perrigo Acquisition Agreement;

 

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(c) Subject to Section 6.20, the Administrative Agent shall have received
certificates of insurance from an independent insurance broker naming the
Administrative Agent as additional insured or lender’s loss payee thereunder,
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained in accordance with the
provisions of this Agreement and the other Loan Documents, which shall be in
amounts, types and terms and conditions reasonably satisfactory to the
Administrative Agent;

(d) The Security Documents shall be effective to create in favor of the
Administrative Agent a legal, valid and enforceable first priority security
interest in and Lien upon the Collateral; provided, that perfection of such
Liens shall be a condition under this Section 4.01 solely to the extent that
perfection can be accomplished by the delivery of pledged certificated
securities, the filing of a financing statement under the UCC or the filing of a
short-form intellectual property security agreement with the U.S. Patent and
Trademark Office or the U.S. Copyright Office;

(e) The Administrative Agent shall have received from each Credit Party
executing a Loan Document, a completed and executed Perfection Certificate and
the results of UCC and intellectual property searches with respect to the
Collateral, indicating no Liens other than Permitted Liens and otherwise in form
and substance reasonably satisfactory to the Administrative Agent;

(f) The Administrative Agent shall have received (a) an unaudited pro forma
consolidated balance sheet of the Borrower and related pro forma statement of
income as of and for the twelve-month period ending on the last day of the most
recently completed four-Fiscal Quarter period ended at least sixty days prior to
the Closing Date (or if the end of the most recently completed four-Fiscal
Quarter period is the end of a Fiscal Year, ended at least ninety days before
the Closing Date), prepared after giving effect to the Closing Date Transactions
has occurred as of such date (in the case of the balance sheet) or at the
beginning of such period (in the case of such income statement) and each such
pro forma financial statement shall be prepared in good faith by the Borrower,
and (b) the combined unaudited balance sheet of the Perrigo Entities for the
Fiscal Quarter ended March 31, 2019 and each other Fiscal Quarter thereafter
ended at least sixty days prior the Closing Date (or if the end of the most
recently completed four-Fiscal Quarter period is the end of a fiscal year, ended
at least ninety days before the Closing Date) and the related unaudited
statements of income, as prepared by management for the Fiscal Quarter then
ended;

(g) The Administrative Agent shall have received an officer’s certificate of the
Borrower dated as of the Closing Date and signed by a Financial Officer (or, at
the sole option and discretion of the Borrower, a third party opinion in
customary form issued by a nationally recognized firm) as to the Solvency of the
Credit Parties and their Restricted Subsidiaries, on a consolidated basis,
immediately after giving effect to the Loans hereunder, any borrowings under the
ABL Facility, the Closing Date Transactions and the other transactions
contemplated hereby occurring on the Closing Date;

(h) Prior to or substantially concurrently with the funding of the Initial Term
Loans and giving effect to the Closing Date Transactions, all Indebtedness for
borrowed money of Parent, the Borrower and their Restricted Subsidiaries under
the Existing Term Loan Credit Agreement shall be repaid in full in cash (or as
may be otherwise agreed by the applicable Lender) and all related commitments
shall be terminated;

 

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(i) The Administrative Agent shall have received an initial Loan Advance Request
seven (7) Business Days before the Closing Date and disbursement instructions
from the Borrower, indicating how the proceeds of the Loans to be made on the
Closing Date are to be disbursed;

(j) The Administrative Agent shall have received at least three Business Days
prior to the Closing Date all information reasonably requested by it in writing
ten Business Days prior to the Closing Date under applicable
“know-your-customer” and anti-money laundering rules and regulations, including
without limitation, the PATRIOT Act and the Beneficial Ownership Regulation;

(k) Any fees (which may be netted from the proceeds of the Initial Term Loan
Facility on the Closing Date) required to be paid under the Loan Documents on or
before the Closing Date (including any such fees required by the Fee Letter)
shall have been paid;

(l) The Borrower shall have paid all fees, charges and disbursements of counsel
to the Administrative Agent to the extent invoiced three (3) Business Days prior
to the Closing Date (except at otherwise reasonably agreed by the Borrower),
plus such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Administrative Agent);

(m) Prior to or substantially concurrently with the funding of the Initial Term
Loans, the Borrower shall have executed and delivered the ABL Facility Amendment
in form and substance substantially consistent with the ABL Consent Letter and
the ABL Facility Amendment shall have become effective in accordance with its
terms. The aggregate amount of revolving commitments under the ABL Credit
Agreement is $125,000,000 or less and the borrowings thereunder as of the
Closing Date is $60,000,000 or less; and

(n) The Perrigo Acquisition Representations that are Fundamental Representations
(as defined in the Perrigo Acquisition Agreement) shall be true and correct in
all respects (other than de minimis inaccuracies) as of the Closing Date as
though made as of the Closing Date (except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date). The Perrigo
Acquisition Representations (other than Fundamental Representations (as defined
in the Perrigo Acquisition Agreement)) shall be true and correct (without giving
effect to any limitation as to “materiality” or “Material Adverse Effect” or any
similar limitation contained in the Perrigo Acquisition Agreement) as of the
Closing Date as though made as of the Closing Date (except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date), except where
the failure of such Perrigo Acquisition Representations to be so true and
correct would not reasonably be expected to have, individually or in the
aggregate, a Closing Date Material Adverse Effect. The Specified Representations
shall be true and correct in all material respects (or if qualified by
materiality, in

 

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all respects); provided, that to the extent that any of the Specified
Representations are qualified by or subject to a “material adverse effect”,
“material adverse change” or similar term or qualification, the definition
thereof shall be a Closing Date Material Adverse Effect for purposes of any such
representations and warranties made or deemed made on, or as of, the Closing
Date (or any date prior thereto); and

(o) The Borrower shall have used commercially reasonable efforts to ensure that
the Administrative Agent shall have been afforded a period of at least 15
consecutive Business Days following receipt of the Confidential Information
Memorandum and customary authorization letters to syndicate the Initial Term
Loan Facility; provided that (x) July 3, 2019, July 4, 2019 and July 5, 2019 and
November 28, 2019 and November 29, 2019 shall not be counted towards the total
number of consecutive days for purposes of the marketing period, (y) if such
marketing period has not ended prior to August 16, 2019 or December 17, 2019,
respectively, such period shall not be deemed to have commenced until
September 3, 2019 or January 2, 2020, as applicable, and (z) for the avoidance
of the doubt, May 27, 2019, October 14, 2019, November 11, 2019, January 20,
2020, February 17, 2020 and April 10, 2020 shall not be considered Business Days
for purposes of the marketing period.

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or reasonably acceptable
or satisfactory to such Person unless the Administrative Agent shall have
received notice from such Person prior to the proposed Closing Date specifying
its objection thereto.

Section 4.02 Conditions to all Credit Extensions after the Closing Date. The
obligation of each Lender to honor any Request for Credit Extension (other than
a Loan Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:

(a) The representations and warranties of the Borrower and each other Credit
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects (but without any
duplication of any materiality qualifications) on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects (but without any duplication of any materiality
qualifications) as of such earlier date, and except that for purposes of this
Section 4.02, the representations and warranties contained in Section 5.02 shall
be deemed to refer to the most recent statements furnished pursuant to clauses
(a), (b) and (c) respectively, of Section 6.04.

(b) No Default or Event of Default shall exist, or would result from such
proposed Credit Extension or from the application of the proceeds thereof.

(c) The Borrower shall have delivered to the Administrative Agent a Request for
Credit Extension in accordance with the requirements hereof.

 

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Each Request for Credit Extension submitted by the Borrower shall be deemed to
be a representation and warranty that the conditions specified in Sections
4.02(a), (b) and (c) have been satisfied on and as of the date of the applicable
Credit Extension.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Each Credit Party signatory hereto represents and warrants to the Lenders and
the Administrative Agent for itself and on behalf of its Restricted Subsidiaries
as follows:

Section 5.01 Corporate Authority, Etc.

(a) Existence, Qualification and Power. Each Credit Party and each Restricted
Subsidiary thereof (i) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (ii) has all requisite power and authority and
all requisite governmental licenses, authorizations, consents and approvals to
(A) own or lease its assets and carry on its business and (B) execute, deliver
and perform its obligations under the Loan Documents to which it is a party, and
(iii) is duly qualified and is licensed and, as applicable, in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (ii)(A) or (iii) of this
Section 5.01(a), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(b) Authorization; No Contravention. The execution, delivery and performance by
each Credit Party of each Loan Document to which such Person is party, (i) have
been duly authorized by all necessary corporate or other organizational action,
and (ii) do not and will not (A) contravene the terms of any of such Person’s
Governing Documents; (B) conflict with or result in any breach or contravention
of, or the creation of any Lien (other than Permitted Liens) under, or require
any material payment to be made under (x) any Contractual Obligation to which
such Person is a party or affecting such Person or the properties of such Person
or any of its Restricted Subsidiaries or (y) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which such Person
or its property is subject; or (C) violate any applicable Law.

(c) Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (i) the execution, delivery or performance by, or enforcement
against, any Credit Party of this Agreement or any other Loan Document or
(ii) the grant by any Credit Party of the Liens granted by it pursuant to the
Security Documents, (iii) the perfection or maintenance by any Credit Party of
the Liens created under the Security Documents (including the first priority
nature thereof), or (iv) the exercise by the Administrative Agent or any Lender
of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Security Documents, except, in each case, for
approvals, consents, exemptions, authorizations, actions, notice and filing
which have been duly obtained, taken, given or made and are in full force and
effect.

 

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(d) Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Credit
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Credit Party, enforceable against each Credit Party that is
party thereto in accordance with its terms, except as enforceability may be
limited by any applicable Debtor Relief Laws, moratorium or similar laws
affecting creditors’ rights generally and the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

Section 5.02 Financial Statements; Projections.

(a) There has been furnished to the Administrative Agent (for distribution to
each of the Lenders) financial statements of the type described in
Section 6.04(a) for the Fiscal Year ended December 31, 2018 for Parent, the
Borrower and their Subsidiaries (other than the Perrigo Entities). Such
financial statements

(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein;

(ii) fairly present the financial condition of (x) Parent, the Borrower and
their Subsidiaries (other than the Perrigo Entities) and (y) the Perrigo
Entities, in each case, as of the date thereof and their results of operations,
cash flows and changes in shareholders’ equity for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and

(iii) show all material indebtedness and other liabilities, direct or
contingent, of (x) Parent, the Borrower and their Subsidiaries (other than the
Perrigo Entities) and (y) the Perrigo Entities, in each case, as of the date
thereof, including liabilities for Taxes, material commitments and Indebtedness.

(b) There has been furnished to the Administrative Agent (for distribution to
each of the Lenders) an unaudited consolidated balance sheet of (x) Parent, the
Borrower and their Subsidiaries (other than the Perrigo Entities) and (y) the
Perrigo Entities, in each case, as of the Fiscal Quarter ended March 31, 2019
and unaudited consolidated statements of income or operations and cash flow of
(x) Parent, the Borrower and their Subsidiaries (other than the Perrigo
Entities) and (y) the Perrigo Entities, in each case, as of the Fiscal Quarter
ended March 31, 2019, in each case, certified by a Financial Officer of the
Borrower. Such balance sheet and statement of income or operations and cash
flows have been prepared in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein, and
fairly present the financial condition of (x) Parent, the Borrower and their
Subsidiaries (other than the Perrigo Entities) and (y) the Perrigo Entities, in
each case, as of the date thereof and the results of operations, cash flows and
changes in shareholders’ equity for the period covered thereby, subject to the
absence of footnotes and to normal year-end audit adjustments. There are no
contingent liabilities of (x) Parent, the Borrower and their Subsidiaries (other
than the Perrigo Entities) and (y) the Perrigo Entities, in each case, as of
such date involving material amounts, known to the officers of Parent, the
Borrower or any Restricted Subsidiary required to be disclosed in such balance
sheet and the notes related thereto in accordance with GAAP which were not
disclosed in such balance sheet and the notes related thereto.

 

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(c) There has been furnished to the Administrative Agent (for distribution to
each of the Lenders) an unaudited consolidated balance sheet of Parent, the
Borrower and their Restricted Subsidiaries (other than the Perrigo Entities) as
of the Fiscal Months of January 2019, February 2019 and March 2019 and unaudited
consolidated statements of income or operations and cash flow of Parent, the
Borrower and their Restricted Subsidiaries (other than the Perrigo Entities) as
of the Fiscal Month of March 2019, in each case, certified by a Financial
Officer of the Borrower. Such balance sheet and statement of income or
operations and cash flows have been prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and fairly present the financial condition of Parent,
the Borrower and their Restricted Subsidiaries (other than the Perrigo Entities)
as of the date thereof and the results of operations, cash flows and changes in
shareholders’ equity for the period covered thereby, subject to the absence of
footnotes and to normal year-end audit adjustments. There are no contingent
liabilities of Parent, the Borrower or any Restricted Subsidiary (other than the
Perrigo Entities) as of such date involving material amounts, known to the
officers of Parent, the Borrower or any Restricted Subsidiary required to be
disclosed in such balance sheet and the notes related thereto in accordance with
GAAP which were not disclosed in such balance sheet and the notes related
thereto.

(d) There has been furnished to the Administrative Agent (for distribution to
each of the Lenders) (i) an unaudited pro forma consolidated balance sheet of
the Borrower and related pro forma statement of income as of and for the
twelve-month period ending on the last day of the most recently completed
four-Fiscal Quarter period ended at least sixty days prior to the Closing Date
(or if the end of the most recently completed four-Fiscal Quarter period is the
end of a Fiscal Year, ended at least ninety days before the Closing Date),
prepared after giving effect to as if the Closing Date Transactions had occurred
as of such date (in the case of the balance sheet) or at the beginning of such
period (in the case of such income statement) and (ii) the combined unaudited
balance sheet of the Perrigo Entities for the Fiscal Quarter ended March 31,
2019 and each other Fiscal Quarter thereafter ended at least sixty days prior to
the Closing Date (or if the end of the most recently completed four-Fiscal
Quarter period is the end of a Fiscal Year, ended at least ninety days before
the Closing Date) and the related unaudited statements of income, as prepared by
management for the Fiscal Quarter then ended. Such financial statements

(i) have been prepared in good faith by the Borrower based upon (A) the
assumptions stated therein (which assumptions are believed by the Borrower on
the date of delivery thereof and on the Closing Date to be reasonable),
(B) accounting principles consistent with the accounting principles applied to
the historical financials of the Borrower and the Perrigo Entities and (C) the
best information available to the Borrower as of the date of delivery thereof,

(ii) accurately reflect all adjustments required to be made to give effect to
the Closing Date Transactions,

 

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(iii) have been prepared in accordance with GAAP (subject to normal year-end
audit adjustments and the absence of footnotes) consistently applied throughout
the applicable period covered thereby and

(iv) present fairly the pro forma consolidated financial position and results of
operations of Parent, the Borrower and its Restricted Subsidiaries as of such
date and for such periods, assuming that the Closing Date Transactions occurred
as of such date or at the beginning of such period, as applicable.

(e) There has also been furnished to the Administrative Agent (for distribution
to each of the Lenders), for Parent, the Borrower and their Restricted
Subsidiaries (i) forecasts for the 2020 Fiscal Year and (ii) projections for the
2020 Fiscal Year. Such forecasts and projections were prepared in good faith on
the basis of assumptions stated therein, which assumptions were reasonable in
light of the conditions existing at the time of their delivery and represented,
at the time of delivery, the Borrower’s best estimate of its future financial
conditions and performance. To the knowledge of the Credit Parties, as of the
Closing Date, no facts exist that (individually or in the aggregate) would
reasonably be expected to result in any material adverse change in any of such
forecasts or projections (taken as a whole). Such forecasts and projections have
been prepared on a pro forma basis after giving effect to the transactions
contemplated hereby. As of the Closing Date, such forecasts and projections are
based upon reasonable estimates and assumptions and reflect the reasonable
estimates of the Credit Parties of the results of operations and other
information projected therein.

Section 5.03 Solvency. After giving effect to the Loans hereunder, the Closing
Date Transactions and the other transactions contemplated hereby, the Credit
Parties and their Restricted Subsidiaries, on a consolidated basis, are Solvent.

Section 5.04 No Material Adverse Change. Since the Closing Date, there has been
no event, chance, circumstance, condition, development or occurrence that has
had, or could reasonably be excepted to have, either individually or in the
aggregate, a Material Adverse Effect.

Section 5.05 Ownership of Property; Liens. Each of the Credit Parties and each
Restricted Subsidiary has good record and marketable title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Credit Parties and their Restricted
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.03.

Section 5.06 Franchises, Patents, Copyrights, etc.. Each Credit Party possesses
all franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing (collectively, “Intellectual
Property”), adequate for the conduct of its business without known material
conflict with any rights of others except to the extent that the failure to do
so could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Perfection Certificate delivered on the Closing
Date sets forth a true, correct and complete list of all patents, patent
applications, federally registered copyrights and copyright applications,
trademarks and trademark applications owned by any Credit Party as of the
Closing Date.

 

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Section 5.07 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Credit Parties, threatened in
writing, at law, in equity, in arbitration or before any Governmental Authority,
by or against any Credit Party or any of its Restricted Subsidiaries that
(a) purport to materially adversely affect this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or (b) could reasonably
be expected to result in material liabilities against the Credit Parties and
their Restricted Subsidiaries, taken as a whole, either individually or in the
aggregate except as disclosed in Schedule 5.07, and there has been no material
adverse change in the status, or financial effect on the Credit Parties and
their Restricted Subsidiaries, taken as a whole, of the matters described on
Schedule 5.07.

Section 5.08 No Default. No Default or Event of Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

Section 5.09 Compliance with Laws. Each Credit Party and each Restricted
Subsidiary thereof is in compliance with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

Section 5.10 Tax Status. The Credit Parties (i) have filed or caused to be filed
all federal, material provincial and all material state, and material foreign
income and all other material tax returns, reports and declarations required by
any jurisdiction to which any of them is subject and (ii) have paid all material
Taxes (including withholdings) required to have been paid including in their
capacity as tax withholding agents, except those being contested in good faith
and by appropriate proceedings and for which the Credit Parties have set aside
on their books reasonably adequate provisions therefor in accordance with GAAP
(unless foreclosure or other similar enforcement action has been commenced in
respect thereof or any Lien has been filed or otherwise perfected therefor, in
which case such exception does not apply). There is no proposed material tax
assessment or other claim against, and no material tax audit with respect to,
the Borrower or any Restricted Subsidiary. Proper and accurate amounts have been
withheld by each Credit Party from its respective employees for all periods in
material compliance with all material applicable, federal, state, local and
foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities.

Section 5.11 Insurance. The properties of the Credit Parties are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Credit Parties operate, which such
insurance shall include general property insurance, general liability insurance
and insurance covering contamination or recall of inventory.

 

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Section 5.12 Investment Company Acts. None of any Credit Party, any Person
controlling any Credit Party, or any Restricted Subsidiary of any Credit Party,
is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

Section 5.13 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state laws. Each Plan that is
intended to be a qualified plan under Section 401(a) of the Code has received a
favorable determination letter from the IRS to the effect that the form of such
Plan is qualified under Section 401(a) of the Code and the trust related thereto
has been determined by the IRS to be exempt from federal income tax under
Section 501(a) of the Code, or an application for such a letter is currently
being processed by the IRS. To the best knowledge of each Credit Party, nothing
has occurred that would prevent or cause the loss of such tax-qualified status.

(b) There are no pending or, to the best knowledge of each Credit Party,
threatened claims, actions or lawsuits, or actions by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred, and neither any Credit Party nor any ERISA
Affiliate is aware of any fact, event or circumstance that could reasonably be
expected to constitute or result in an ERISA Event with respect to any Pension
Plan; (ii) each Credit Party and each ERISA Affiliate has met all applicable
requirements under the Pension Funding Rules in respect of each Pension Plan,
and no waiver of the minimum funding standards under the Pension Funding Rules
has been applied for or obtained; (iii) as of the most recent valuation date for
any Pension Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and neither any Credit Party nor
any ERISA Affiliate knows of any facts or circumstances that could reasonably be
expected to cause the funding target attainment percentage for any such plan to
drop below 60% as of the most recent valuation date; (iv) neither any Credit
Party nor any ERISA Affiliate has incurred any liability to the PBGC other than
for the payment of premiums, and there are no premium payments which have become
due that are unpaid; (v) neither any Credit Party nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or
Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the
plan administrator thereof nor by the PBGC, and no event or circumstance has
occurred or exists that could reasonably be expected to cause the PBGC to
institute proceedings under Title IV of ERISA to terminate any Pension Plan.

(d) Neither any Credit Party nor any ERISA Affiliate maintains or contributes
to, or has any unsatisfied obligation to contribute to, or liability under, any
active or terminated Pension Plan.

Section 5.14 Margin Regulations. The proceeds of the Loans shall be used solely
for the purposes specified in Section 6.11. No portion of any Loan is to be used
for the purpose of purchasing or carrying any “margin security” or “margin
stock” as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts

 

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221 and 224. No part of the proceeds of any Loans will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, for
purchasing or carrying margin stock or for any other purpose that entails a
violation of, or that is inconsistent with, the provisions of the regulations of
the Board of Governors, including Regulation T, Regulation U or Regulation X.

Section 5.15 Use of Proceeds.

The Borrower will use the proceeds of the Loans only for the purposes specified
in Section 6.11. The proceeds of the Loans will not be used in violation of
Anti-Corruption Laws, Anti-Terrorism Laws or applicable Sanctions.

Section 5.16 [Reserved].

Section 5.17 Subsidiaries, etc.. As of the Closing Date, Parent and the Borrower
does not have any Subsidiaries except as set forth on Schedule 5.17 hereto and,
as of the Closing Date, all of the outstanding Capital Stock in such
Subsidiaries has been validly issued, fully paid and nonassessable and are owned
by Parent, the Borrower or a Subsidiary of the Borrower in the amounts specified
on Schedule 5.17 free and clear of all Liens (other than Permitted Equity Liens
and Liens in favor the Administrative Agent granted under the Security
Documents).

Section 5.18 Environmental Compliance. Each Credit Party and each Restricted
Subsidiary thereof is in compliance with the requirements of all Environmental
Laws applicable to the business, operations and properties of such Credit Party
and its Restricted Subsidiaries except where the failure to so comply could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Credit Parties and their Restricted Subsidiaries (x) are,
and within the period of all applicable statutes of limitation have been, in
compliance (in all material respects) with all applicable Environmental Laws;
(y) hold all Environmental Permits (each of which is in full force and effect)
required for any of their current operations or for any property owned, leased,
or otherwise operated by any of them; and (z) are, and within the period of all
applicable statutes of limitation have been, in compliance (in all material
respects) with all of their Environmental Permits.

Section 5.19 [Reserved].

Section 5.20 Labor Contracts. Except as set forth on Schedule 5.20, as of the
Closing Date, none of the Credit Parties or their Restricted Subsidiaries is
party to any collective bargaining agreement. There are no material grievances,
disputes or controversies with any union or other organization of any Credit
Party’s or their Restricted Subsidiaries employees, or threats of strikes or
work stoppages that would reasonably be expected to result in a Material Adverse
Effect.

Section 5.21 Disclosure.

(a) Each Credit Party has disclosed to the Administrative Agent all agreements,
instruments and corporate or other restrictions to which it or any of its
Restricted Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any
Credit Party to

 

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the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading.

(b) As of the Closing Date, the information included in the Beneficial Ownership
Certification is true and correct in all respects.

Section 5.22 Security Documents

(a) The Security Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid, binding and
enforceable security interest in the Collateral described therein and proceeds
and products thereof. In the case of (i) any Capital Stock pledged pursuant to
the Security Agreement represented by certificates, (x) when such certificates
are delivered to the Administrative Agent or (y) when financing statements in
appropriate form are filed in the offices specified on the Perfection
Certificate and (ii) the other Collateral described in the Security Agreement,
when financing statements in appropriate form are filed in the offices specified
on the Perfection Certificate have been completed, the Lien created by the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Credit Parties in such
Collateral and the proceeds and products thereof, as security for the
Obligations, in each case, prior and superior in right to any other Person
(except, with respect to priority only, Permitted Prior Liens and, in the case
of collateral constituting Capital Stock, Permitted Equity Liens).

(b) Each of the Mortgages is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid, binding and
enforceable Lien on the Mortgaged Properties described therein and proceeds and
products thereof, and when the Mortgages are filed in the recording office
designated by the Borrower, each Mortgage shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Credit
Parties in the Mortgaged Properties described therein and the proceeds and
products thereof, as security for the Obligations (as defined in the relevant
Mortgage), in each case prior and superior in right to any other Person (other
than Persons holding Liens or other encumbrances or rights permitted by the
relevant Mortgage).

Section 5.23 OFAC. No Credit Party, nor any Related Party nor, to the knowledge
of the Credit Parties, any director, officer, employee, agent, affiliate or
representative thereof, is an individual or entity that is, or is owned or
controlled by any individual or entity that is (a) currently the subject of any
Sanctions, (b) located, organized or residing in any Designated Jurisdiction,
(c) included on OFAC’s List of Specially Designated Nationals, HMT’s
Consolidated List of Financial Sanctions Targets and the Investment Ban List, or
any similar list enforced by any other relevant sanctions authority, or (d) or
has been (within the previous five (5) years) engaged in any transaction with
any Person who is now or was then the subject of Sanctions or who is located,
organized or residing in any Designated Jurisdiction. Neither any Credit Party,
nor any Subsidiary nor, to the knowledge of any Credit Party, any Affiliate of
any Credit Party or a Subsidiary (x) is a Sanctioned Person, (y) has any of its
assets in Sanctioned Countries, or (z) derives any of its operating income from
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Sanctioned Persons or Sanctioned Countries. No Loan, nor the proceeds from any
Loan, has been used, directly or indirectly, to lend, contribute, provide or has
otherwise made available to fund any activity or business in any Designated
Jurisdiction or to fund any activity or business of any Person located,
organized or residing in any Designated Jurisdiction or who is the subject of
any Sanctions, or in any other manner that will result in any violation by any
Person (including any Lender or the Administrative Agent ) of Sanctions, any
Anti-Corruption Laws or any Anti-Terrorism Laws.

Section 5.24 PATRIOT Act, Anti-Corruption Laws etc.

(a) To the extent applicable, each Credit Party and its Subsidiaries are in
compliance, in all material respects, with (i) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (ii) the
PATRIOT Act. No part of the proceeds of the Loans will be used, directly or
indirectly, for any payment to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

(b) Parent has implemented and maintains in effect policies and procedures
designed to ensure compliance by Parent, the Borrower, their Subsidiaries and
their respective directors, officers, employees and agents with Anti-Corruption
Laws and applicable Sanctions.

(c) Parent, the Borrower and their Subsidiaries and their respective officers,
directors, employees and, to the knowledge of the Borrower, the agents of
Parent, the Borrower and their Subsidiaries, are in compliance with
Anti-Corruption Laws and applicable Sanctions.

(d) None of the Credit Parties or any Subsidiaries thereof is in violation of
any Anti-Terrorism Law, engages in, or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

ARTICLE VI.

AFFIRMATIVE COVENANTS

Each Credit Party signatory hereto covenants and agrees for itself and on behalf
of its Restricted Subsidiaries that, so long as any Lender shall have any
Commitment hereunder or any Loan or other Obligation (other than any Secured
Cash Management Obligation or Secured Hedge Obligation) remains outstanding:

Section 6.01 Punctual Payment. Each Credit Party will duly and punctually pay or
cause to be paid when due all principal and interest on the Loans, the fees and
all other Obligations and amounts provided for in this Agreement and the other
Loan Documents to which it is a party and will cause to be paid any amounts
owing by any Credit Party, all in accordance with the terms of this Agreement
and such other Loan Documents.

 

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Section 6.02 Maintenance of Office; Certain Changes. Each Credit Party will
maintain its chief executive office, distribution center, warehouse, shipping
center, plant, factory, or other similar location at the locations identified in
the Perfection Certificate delivered by such Credit Party to the Administrative
Agent or at such other place as the Borrower shall designate upon no less than
(a) 30 days prior written notice to the Administrative Agent (or such shorter
period as may be acceptable to the Administrative Agent) in the case of its
chief executive office or a material distribution center, material warehouse or
material plant (which, for the avoidance of doubt, shall include the facilities
located in Florida, Utah, Texas, Indiana and Nebraska) or (b) 15 days prior
written notice to the Administrative Agent (or such shorter period as may be
acceptable to the Administrative Agent) in the case of any other distribution
center, warehouse, shipping center, plant, factory or other similar location, in
each case, where notices, presentations and demands to or upon any Credit Party
in respect of the Loan Documents to which such Credit Party is a party may be
given or made. Each Credit Party shall notify the Administrative Agent, in
writing, not less than thirty (30) days’ (or such shorter period as may be
acceptable to the Administrative Agent) prior to any change in its name or the
type of its organization, jurisdiction or organization, organizational
identification number, or tax identification number.

Section 6.03 Records and Accounts. Each Credit Party will (i) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with, and all financial statements provided for
herein shall be prepared in accordance with GAAP consistently applied;
(ii) maintain adequate accounts and reserves for all taxes (including income
taxes, depreciation, depletion, obsolescence and amortization of its properties,
contingencies and other reserves); and (iii) at all times maintain the Auditor
as the Credit Parties’ accountants.

Section 6.04 Financial Statements, Certificates and Information. The Credit
Parties will deliver to the Administrative Agent and, upon request, to the
Lenders:

(a) as soon as practicable, but in any event no later than ninety (90) days
after the end of each Fiscal Year,

(i) the consolidated and consolidating balance sheet of Parent, the Borrower and
their Restricted Subsidiaries, as at the end of such Fiscal Year, and the
related consolidated and consolidating statements of income or operations, cash
flows and shareholders’ equity for such Fiscal Year, each setting forth in
comparative form the figures for the previous Fiscal Year and all such
consolidated and consolidating financial statements to be in reasonable detail,
prepared in accordance with GAAP consistently applied and such consolidated and
consolidating financial statements to be audited and accompanied by a report and
opinion prepared in accordance with generally accepted auditing standards by
independent certified public accountants reasonably satisfactory to the
Administrative Agent and certified without qualification and without expression
of uncertainty as to the ability of Parent, the Borrower and their Restricted
Subsidiaries to continue as going concerns (other than a “going concern”
qualification resulting from an upcoming maturity under this Agreement or ABL
Credit Agreement occurring within one year from the time of such opinion is
delivered or a breach of the Financial Maintenance Covenant hereunder or any
financial covenant under the ABL Credit Agreement), together with a copy of
their accountants’ management letter (if any) for such Fiscal Year and

 

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(ii) a Compliance Certificate duly executed by a Financial Officer of the
Borrower, which, among other things,

(A) attaches and certifies to the foregoing consolidated and consolidating
financial statements, accountants statements, management letters and a
management discussion and analysis prepared in connection with such financial
statements,

(B) certifies that the information contained in such consolidated and
consolidating financial statements fairly presents in all material respects the
financial condition of Parent, the Borrower and their Restricted Subsidiaries on
the dates indicated therein,

(C) appends computations evidencing the First Lien Net Leverage Ratio and Excess
Cash Flow, in each case, for the Reference Period ended as of the last day of
such Fiscal Year and specifying whether the Credit Parties have complied with
Section 7.13, and

(D) states that such Financial Officer has reviewed this Agreement and the other
Loan Documents and has no knowledge of any Default or Event of Default during
such Fiscal Year, or if such Financial Officer has such knowledge, specifying
each Default or Event of Default and the nature thereof;

(b) as soon as practicable, but in any event no later than forty-five (45) days
after the end of each of the first three Fiscal Quarters of each Fiscal Year

(i) the consolidated and consolidating balance sheet of Parent, the Borrower and
their Restricted Subsidiaries, as at the end of such Fiscal Quarter, and the
related consolidated and consolidating statements of income or operations, cash
flows and shareholders’ equity for such Fiscal Quarter and the portion of the
Fiscal Year through the end of such Fiscal Quarter, each setting forth in
comparative form the figures for the previous Fiscal Quarter of the previous
Fiscal Year and the corresponding portion of the previous Fiscal Year and all
such consolidated and consolidating financial statements to be in reasonable
detail, prepared in accordance with GAAP consistently applied and

(ii) a Compliance Certificate duly executed by a Financial Officer of the
Borrower, which, among other things,

(A) attaches and certifies to the foregoing consolidated and consolidating
financial statements and a management discussion and analysis prepared in
connection with such financial statements (subject to year-end adjustments and
the absence of footnotes),

(B) certifies that the information contained in such consolidated and
consolidating financial statements fairly presents in all material respects the
financial condition of Parent, the Borrower and their Restricted Subsidiaries on
the dates indicated therein,

 

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(C) appends computations evidencing the First Lien Net Leverage Ratio for the
Reference Period ended as of the last day of such Fiscal Quarter and specifying
whether the Credit Parties have complied with Section 7.13, and

(D) states that such Financial Officer has reviewed this Agreement and the other
Loan Documents and has no knowledge of any Default or Event of Default during
such Fiscal Quarter, or if such Financial Officer has such knowledge, specifying
each Default or Event of Default and the nature thereof;

(c) as soon as practicable, but in any event no later than forty-five (45) days
after the end of each of the first two Fiscal Months of each Fiscal Quarter

(i) the unaudited monthly consolidated and consolidating financial statements of
Parent, the Borrower and their Restricted Subsidiaries for such Fiscal Month,
including the consolidating balance sheet of Parent, the Borrower and their
Restricted Subsidiaries, as at the end of such Fiscal Month, the related
consolidating statements of income or operations and cash flows for such Fiscal
Month and for the portion of the Fiscal Year then ended, each setting forth in
comparative form the figures for the corresponding Fiscal Month of the previous
Fiscal Year and the corresponding portion of the previous Fiscal Year, each,
prepared in accordance with GAAP consistently applied and

(ii) a Compliance Certificate duly executed by a Financial Officer of the
Borrower, which, among other things,

(A) attaches and certifies to the foregoing consolidated financial statements
and a management discussion and analysis prepared in connection with such
financial statements (subject to year-end adjustments and the absence of
footnotes),

(B) certifies that the information contained in such financial statements fairly
presents in all material respects the financial condition of Parent, the
Borrower and their Restricted Subsidiaries on the date thereof (subject to
year-end adjustments and the absence of footnotes), and

(C) states that such Financial Officer has reviewed this Agreement and the other
Loan Documents and has no knowledge of any Default or Event of Default during
such Fiscal Month, or if such Financial Officer has such knowledge, specifying
each Default or Event of Default and the nature thereof to the Administrative
Agent’s reasonable satisfaction;

(d) not later than January 31 of each Fiscal Year, an annual business plan and
projections for Parent, the Borrower and their Restricted Subsidiaries for the
following Fiscal Year on a monthly basis (such projections to include
consolidated balance sheets, statements of cash flows, statements of income or
operations of Parent, the Borrower and their Restricted Subsidiaries, in each
case prepared on a month-by-month basis and such other matters reasonably
requested by the Administrative Agent);

 

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(e) promptly upon receipt thereof, copies of any detailed audit reports,
financial control reports, management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of the
Credit Parties by independent accountants other consultants or advisors in
connection with the accounts or books of ay Credit Party or any Restricted
Subsidiary or any audit of any of them;

(f) immediately, and in any event within two (2) Business Days after receipt by
a member of Senior Management thereof by any Credit Party or any Restricted
Subsidiary thereof, copies of each notice or other correspondence received from
any Governmental Authority concerning any material investigation by such agency
regarding financial or other operational results of any Credit Party or any
Restricted Subsidiary;

(g) promptly following the request of the Administrative Agent, a report
summarizing the insurance coverage in effect for each Credit Party and its
Restricted Subsidiaries and promptly following the modification, renewal,
replacement of any insurance policy of any Credit Party or its Restricted
Subsidiaries, updated insurance certificates and endorsements evidencing such
coverage;

(h) as soon as practicable, but in any event no later than ten (10) days
following the end of each Fiscal Quarter (or more frequently at the election of
the Credit Parties), either (x) updated Schedules 5.07, 5.17, and 7.08, an
updated Exhibit A to the IP Security Agreements and an updated list of bank
accounts in the Perfection Certificate, in each case in substantially the same
form as the most recent schedule of the same delivered to the Administrative
Agent or (y) for any of the foregoing for which there has been no change since
the previous Fiscal Quarter, a certificate confirming that there has been no
change in such information, which such updated schedules or certificate of no
change shall be satisfactory to the Administrative Agent; and

(i) promptly following a request therefor, from time to time such sales
projections, budgets, operating plans or other financial data or information as
the Administrative Agent or any Lender may reasonably request.

Notwithstanding the foregoing, the obligations to provide certain financial
statements in Section 6.04(a)(i) and (b)(i) may also be satisfied by the
furnishing of the Form 10-K or 10-Q, as applicable, of Parent (or Parent’s
direct or indirect parent company) filed with the SEC or otherwise made
available to the Administrative Agent for delivery to each Lender, in each case,
within the time periods specified in Section 6.04(a) and (b); provided, that to
the extent such financial statements relate to any Person or Persons other than
Parent, the Borrower and their Restricted Subsidiaries, on a standalone basis,
(including, without limitation, any Unrestricted Subsidiaries or any direct or
indirect parent of Parent), such financial statements shall be accompanied by
consolidating information that explains in reasonable detail the differences
between the information relating to such Person or Persons, on the one hand, and
Parent, the Borrower and their Restricted Subsidiaries, on a standalone basis,
on the other hand, which consolidating information shall be certified by a
Financial Officer of the Borrower as having been fairly presented in all
material respects.

 

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Section 6.05 Notices.

(a) Defaults. The Credit Parties will promptly (but in any event within three
(3) Business Days) notify the Administrative Agent and each Lender in writing
following Senior Management obtaining knowledge of the occurrence of (i) any
Default or Event of Default or (ii) any “default,” “event of default” or
material breach under any Material Agreement or Pharmaceutical License or
(iii) any termination or expiration of any Material Agreement or Pharmaceutical
License.

(b) Material Adverse Effect. The Credit Parties shall promptly (but in any event
within three (3) Business Days following Senior Management obtaining knowledge
thereof) disclose in writing to the Administrative Agent (for distribution to
each Lender) any matter that has resulted or would reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of any Credit Party or any
Restricted Subsidiary; (ii) any dispute, litigation, investigation, proceeding
or suspension between any Credit Party or any Restricted Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting any Credit Party or any
Restricted Subsidiary, including (A) with respect to any litigation disclosed on
Schedule 5.07 and (B) pursuant to any applicable Environmental Laws.

(c) ERISA Events. The Credit Parties shall promptly following Senior Management
obtaining knowledge disclose in writing to the Administrative Agent the
occurrence of any ERISA Event.

(d) Change in Accounting Policies or Financial Reporting. The Credit Parties
shall promptly disclose in writing to the Administrative Agent notice of (i) any
material change in accounting policies or financial reporting practices by
Parent, the Borrower or any Subsidiary or (ii) discharge by any Credit Party of
its independent accountants or any withdrawal or resignation by such independent
accountants.

(e) Notice of Tax Claims, Litigation and Judgments.

(i) The Credit Parties and their Restricted Subsidiaries will give notice to the
Administrative Agent and each Lender in writing within three (3) Business Days’
of Senior Management obtaining knowledge of

(A) any written notice of proposed assessment or written notice of the
commencement of any audit by any Governmental Authority for unpaid Taxes of any
Credit Party or any Restricted Subsidiary that are due and payable and

(B) any commencement of any litigation or proceedings threatened in writing or
any pending litigation affecting any Credit Party or any of its Restricted
Subsidiaries or to which any Credit Party or any Restricted Subsidiary thereof
is or becomes a party involving any claim against any Credit Party that has
resulted in or could reasonably be expected to result in (1) liabilities of more
than $17,500,000 against any Credit Party or any Restricted Subsidiary or (2) a
Material Adverse Effect.

 

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(ii) The Credit Parties and their Restricted Subsidiaries will give notice to
the Administrative Agent and each Lender, in writing, in form and detail
reasonably satisfactory to the Administrative Agent, within five (5) Business
Days’ of any judgment not covered by insurance, final or otherwise, against any
Credit Party in an amount in excess of $17,500,000 or of the entry of any
non-monetary judgment that could reasonably be expected to have a Material
Adverse Effect.

(f) [Reserved].

(g) [Reserved].

(h) Notification of Additional Intellectual Property Rights. Within thirty
(30) days of the end of each Fiscal Quarter, the Credit Parties and their
Restricted Subsidiaries will notify the Administrative Agent in writing of any
patents, patent applications, patent application disclosures filed with any
patent office during such Fiscal Quarter, registered copyrights or mask works
registered during such Fiscal Quarter, applications for registration of
copyrights or mask works filed during such Fiscal Quarter and trademark and
service mark registrations during such Fiscal Quarter, and trademark and service
mark registration applications filed during such Fiscal Quarter, all of the
foregoing whether a foreign or United States right, to the extent not listed on
the Perfection Certificate most recently delivered to the Administrative Agent
in accordance with this Agreement.

(i) Environmental Events. The Credit Parties and their Restricted Subsidiaries
will promptly give notice to the Administrative Agent and each Lender (A) of any
violation of any Environmental Law that any Credit Party or a Restricted
Subsidiary reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made) to any
Governmental Authority and (B) upon any member of Senior Management of any
Credit Party or a Restricted Subsidiary obtaining knowledge thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from any
agency of potential Environmental Liability, of any Governmental Authority that,
in the case of clauses (a) or (b) above, could reasonably be expected to result
in a Material Adverse Effect.

(j) Prepayment Events. Promptly following the occurrence of any event for which
the Borrower is required to make a prepayment under Sections 2.05(c), (d) or
(f), together with all supporting information reasonably requested by the
Administrative Agent.

(k) [Reserved].

(l) Labor Relations. The Credit Parties shall provide to the Administrative
Agent prompt written notice of any collective bargaining agreement or other
labor contract to which a Credit Party or a Restricted Subsidiary becomes a
party, or the application for the certification of a collective bargaining
agent.

 

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(m) Fundamental Changes. The Credit Parties shall provide to the Administrative
Agent promptly written notice of the occurrence of any event described in
Section 7.05(a).

(n) Beneficial Ownership Certification. The Credit Parties shall provide any
change in the information provided in the Beneficial Ownership Certification
that would result in a change to the list of beneficial owners identified in
parts (c) or (d) of such certification.

Delivery by the Credit Parties to the Administrative Agent of any and all
notices required to be delivered to the Lenders as herein required shall be
deemed made upon receipt of such notices by the Administrative Agent.

Section 6.06 Legal Existence; Maintenance of Properties.

(a) Except as permitted by Section 7.05, each Credit Party and its Restricted
Subsidiaries will do all things necessary to (i) maintain in full force and
effect its legal existence and good standing under the laws of its jurisdiction
of organization or incorporation, (ii) maintain its qualification to do business
in each state or other jurisdiction in which the failure to do so would result
in a Material Adverse Effect, and (iii) maintain all of its rights and
franchises, except where the failure to maintain such right or franchise would
not result in a Material Adverse Effect.

(b) Each Credit Party and its Restricted Subsidiaries (i) will cause all of its
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Credit Parties (or such Restricted Subsidiary) may be necessary so that the
business may carried on in the ordinary course, and (iii) will continue to
engage in the line of businesses conducted by them on the Closing Date and any
lines of business which are reasonably related, complementary or incidental
thereto; provided that nothing in this Section 6.06(b) shall prevent any Credit
Party or a Restricted Subsidiary from discontinuing the operation and
maintenance of any of its properties if such discontinuance is permitted by
Section 7.05(b).

Section 6.07 Insurance. Each Credit Party and its Restricted Subsidiaries will
maintain with financially sound and reputable insurers insurance with respect to
its material properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be commercially reasonable and
in accordance with the terms of the Security Documents. Such policies of
insurance shall name the Administrative Agent as an additional insured or
lender’s loss payee, as applicable and provide for not less than 30 days’ prior
notice (or not less than 10 days’ in the case of the non-payment of premium) to
the Administrative Agent of termination, lapse or cancellation of such
insurance.

 

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Section 6.08 Taxes. Each Credit Party and its Restricted Subsidiaries will

(a) duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all Taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a Lien or
charge upon any of its property; provided that any such Taxes, assessment,
charge, levy or claim need not be paid if the validity or amount thereof shall
be currently contested in good faith by appropriate proceedings and such Credit
Party shall have set aside on its books adequate reserves in accordance with
GAAP with respect thereto; and provided further that the Credit Parties will pay
all such Taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose or otherwise enforce any Lien that may
have attached as security therefor,

(b) withhold from each payment to be made to any of its past or present
employees, officers or directors, and to any non-resident of the country in
which it is a resident, the amount of all Taxes and all other deductions or
withholdings required to be withheld therefrom and pay the same to the proper
taxing authority within the time required under any applicable Law,

(c) collect from all Persons the amount of all Taxes required to be collected
from them and remit the same to the proper taxing authority within the time
required under any applicable Law, and

(d) file or cause to be filed all federal, state, local and foreign income tax
returns, and all other tax returns, reports, and declarations required by any
jurisdiction to which it is subject as required by applicable Law.

Section 6.09 Compliance with Laws, Contracts, Licenses, Permits; Leaseholds and
Payment of Obligations Generally.

(a) Compliance with Laws, Contracts, Licenses and Permits. Each of the Credit
Parties and its Restricted Subsidiaries will comply with

(i) the applicable Laws wherever its business is conducted, including, without
limitation all Environmental Laws,

(ii) the provisions of its Governing Documents,

(iii) all agreements and instruments by which it or any of its properties may be
bound, and

(iv) all applicable decrees, orders, and judgments;

provided, that in each case, such compliance shall be required by this Agreement
only where noncompliance with this Section 6.09(a)(i)-(iv) would result in a
Material Adverse Effect.

If any authorization, consent, approval, permit or license (including, without
limitation, Pharmaceutical Licenses) from any Governmental Authority or any
central bank or other fiscal or monetary authority shall become necessary or
required in order that any Credit Party or any Restricted Subsidiary may fulfill
any of its obligations hereunder or any of the other Loan Documents or to
conduct its business in any jurisdiction, each Credit Party and each Restricted
Subsidiary will promptly take or cause to be taken all commercially reasonable
steps within the power of such Credit Party and/or such Restricted Subsidiary to
obtain and maintain such authorization, consent, approval, permit or license,
and upon request of the Administrative Agent, to furnish the Administrative
Agent and the Lenders with evidence thereof.

 

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(b) Compliance with Terms of Leaseholds. Each Credit Party and its Restricted
Subsidiaries will make all payments and otherwise perform all material
obligations in respect of all leases of real property to which such Credit Party
or Restricted Subsidiary, as applicable, is a party within any grace period
provided therefor under such lease, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default by a Credit Party
or a Restricted Subsidiary, and cause each of its Restricted Subsidiaries to do
so, except, in any case, where the failure to do so either individually or in
the aggregate, could not be reasonably likely to have a Material Adverse Effect.

(c) Payment of Obligations Generally. Each Credit Party and its Restricted
Subsidiaries will pay and discharge as the same shall become due and payable,
all its other obligations and liabilities (except to the extent prohibited by
Article VII), including (i) all lawful claims which, if unpaid, would by law
become a Lien (other than a Permitted Lien) upon the Collateral or otherwise
could reasonably be expected to result in a Material Adverse Effect and (ii) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions or intercreditor arrangements contained in any instrument or
agreement evidencing such Indebtedness.

(d) Sanctions. The Credit Parties and their Restricted Subsidiaries shall ensure
that the Loans and the proceeds of any Loan, directly or indirectly, will not be
lent, contributed or otherwise made available to any Subsidiary, joint venture
partner or other individual or entity, to fund any activities of or business
with any individual or entity, or in any Designated Jurisdiction, that, at the
time of such funding, is the subject of Sanctions, or in any other manner that
will result in a violation by any individual or entity (including any individual
or entity participating in the transaction, whether as Lender, Administrative
Agent, or otherwise) of Sanctions.

(e) Anti-Corruption and Anti-Terrorism Laws. The Credit Parties and their
Restricted Subsidiaries shall ensure that the proceeds of any Credit Extension
are not directly or indirectly used by such Credit Party, Restricted Subsidiary
or their respective Affiliates for any purpose which would breach the United
States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other
similar Anti-Corruption Laws or any Anti-Terrorism Laws.

Section 6.10 [Reserved].

Section 6.11 Use of Proceeds.

(a) The proceeds of the Initial Term Loans shall be used solely to pay the
acquisition consideration for the Perrigo Acquisition, to refinance the Existing
Term Loans under the Existing Term Loan Credit Agreement and related fees and
expenses incurred in connection with the Closing Date Transactions.

(b) The proceeds of any Incremental Term Loans may be used for working capital
and other general corporate purposes, including the financing of any Permitted
Acquisitions, other permitted Investments and permitted Restricted Payments and
any other use not prohibited by this Agreement.

 

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(c) The proceeds of any Refinancing Term Loans shall be used to refinance the
applicable Refinanced Debt and pay any related fees or expenses incurred in
connection therewith.

(d) No Credit Party shall use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.

Section 6.12 Covenant to Guarantee Obligations and Give Security.

(a) Upon the formation or acquisition of any new direct or indirect Restricted
Subsidiary after the Closing Date (other than any CFC, CFC Holding Company or
any direct or indirect Subsidiary of a CFC) by any Credit Party, then the Credit
Parties shall, at the Credit Parties’ expense:

(i) within fifteen (15) Business Days after such formation or acquisition, cause
such Restricted Subsidiary, and cause each direct and indirect parent of such
Subsidiary (if it has not already done so and is not an Excluded Subsidiary), to
duly execute and deliver to the Administrative Agent a Guarantee guaranteeing
the other Credit Parties’ obligations under the Loan Documents,

(ii) within fifteen (15) Business Days after such formation or acquisition,
furnish to the Administrative Agent a description of the real and personal
properties of such Restricted Subsidiary, in detail reasonably satisfactory to
the Administrative Agent,

(iii) within fifteen (15) Business Days after such formation or acquisition,
cause such Restricted Subsidiary and each direct and indirect parent of such
Restricted Subsidiary (if it has not already done so) to duly execute and
deliver to the Administrative Agent Security Documents, as specified by and in
form and substance reasonably satisfactory to the Administrative Agent, securing
payment of all the Obligations of such Restricted Subsidiary or such parent, as
the case may be, under the Loan Documents and constituting Liens on all such
real and personal properties,

(iv) within fifteen (15) Business Days after such formation or acquisition,
cause such Restricted Subsidiary and each direct and indirect parent of such
Restricted Subsidiary (if it has not already done so) to take whatever action
(including the recording of Mortgages, the filing of Uniform Commercial Code
financing statements, the giving of notices and the endorsement of notices on
title documents or such other actions as are necessary or desirable under any
applicable Law) may be necessary or advisable in the reasonable opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the Security
Documents delivered pursuant to this Section 6.12, enforceable against all third
parties in accordance with their terms,

 

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(v) within fifteen (15) Business Days after such formation or acquisition,
deliver to the Administrative Agent, upon the request of the Administrative
Agent in its sole discretion, a signed copy of a favorable opinion, addressed to
the Administrative Agent and the other Secured Parties, of counsel for the
Credit Parties reasonably acceptable to the Administrative Agent as to the
matters contained in clauses (i), (iii) and (iv) above, and as to such other
matters as the Administrative Agent may reasonably request, and

(vi) as promptly as practicable after such formation or acquisition, deliver,
upon the request of the Administrative Agent in its sole discretion, to the
Administrative Agent with respect to each parcel of real property owned or held
by the entity that is the subject of such formation or acquisition and that is
to be subject to a Mortgage as provided in this Section 6.12, title reports,
surveys and to the extent in the Credit Party’s possession or to the extent
required by applicable Law, engineering, soils and other reports, and
environmental assessment reports, each in scope, form and substance reasonably
satisfactory to the Administrative Agent, provided, however, that to the extent
that any Credit Party or any of its Restricted Subsidiaries shall have otherwise
received any of the foregoing items with respect to such real property, such
items shall, promptly after the receipt thereof, be delivered to the
Administrative Agent.

(b) Upon the acquisition of any property by any Credit Party following the
Closing Date, if such property, in the judgment of the Administrative Agent,
shall not already be subject to a perfected first priority security interest in
favor of the Administrative Agent for the benefit of the Secured Parties, then
the Credit Parties shall, at the Credit Parties’ expense (provided that
notwithstanding anything contained in this Section 6.12(b), no more than 65% of
the voting Capital Stock and 100% of the non-voting Capital Stock of any
first-tier CFC and any CFC Holding Company and none of the Capital Stock of any
direct or indirect Subsidiary of a CFC formed or acquired by any Credit Party
shall be required to be subject to the security interest of the Administrative
Agent):

(i) within fifteen (15) Business Days after such acquisition, furnish to the
Administrative Agent a description of the property so acquired in detail
reasonably satisfactory to the Administrative Agent,

(ii) within fifteen (15) Business Days after such acquisition, cause the
applicable Credit Party to duly execute and deliver to the Administrative Agent
Security Documents (to the extent not already delivered), as specified by and in
form and substance reasonably satisfactory to the Administrative Agent, securing
payment of all the Obligations of the applicable Credit Party under the Loan
Documents and constituting Liens on all such properties,

 

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(iii) within fifteen (15) Business Days after such acquisition, cause the
applicable Credit Party to take whatever action (including the recording of
Mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents or such
action necessary or desirable under applicable Law) may be necessary or
advisable in the opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid and subsisting Liens on such property, enforceable
against all third parties,

(iv) within fifteen (15) Business Days after such acquisition, deliver to the
Administrative Agent, upon the request of the Administrative Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the Credit
Parties reasonably acceptable to the Administrative Agent as to the matters
contained in clauses (ii) and (iii) above and as to such other matters as the
Administrative Agent may reasonably request, and

(v) as promptly as practicable after any acquisition of real property, deliver,
upon the request of the Administrative Agent in its sole discretion, to the
Administrative Agent with respect to such real property, flood zone
determination forms, flood insurance certificates, title reports, surveys and
engineering, soils and other reports, and environmental assessment reports, each
in scope, form and substance satisfactory to the Administrative Agent, provided,
however, that to the extent that any Credit Party or any of its Restricted
Subsidiaries shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly after the receipt
thereof, be delivered to the Administrative Agent;

(c) At any time upon request of the Administrative Agent, promptly execute and
deliver any and all further instruments and documents and take all such other
action as the Administrative Agent may deem necessary or desirable in obtaining
the full benefits of, or (as applicable) in perfecting and preserving the Liens
of, such Security Documents.

(d) Notwithstanding the foregoing in this Section 6.12, (i) any Subsidiary of
the Borrower that is a Credit Party shall not cease to be a Credit Party by
reason of becoming a CFC, a CFC Holding Company or a direct or indirect
Subsidiary of a CFC, and the proviso in Section 6.12(b) shall not apply to any
such Subsidiary, (ii) any newly-formed Subsidiary of the Borrower that is a U.S.
person shall be a Credit Party regardless of whether it is formed as a direct or
indirect Subsidiary of a CFC, and the proviso in Section 6.12(b) shall not apply
to any such Subsidiary and (iii) unless also required or provided under the ABL
Facility, no action 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 United States or to perfect
or make enforceable any security interests in any such assets (it being
understood that there shall be no security agreements or pledges governed under
laws of any non-U.S. jurisdiction).

Section 6.13 Certain Changes. Each Credit Party shall notify the Administrative
Agent, in writing, not less than thirty (30) days’ prior to (i) any change in
its chief executive office, name or the type of its organization, jurisdiction
or organization, organizational identification number, or tax identification
number, (ii) the acquisition of any Real Estate pursuant to Section 7.05 or
(iii) the acquisition of any material asset to the extent located in any
jurisdiction other than those jurisdictions located in the United States of
America or those jurisdictions specified on such Credit Party’s Perfection
Certificate.

 

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Section 6.14 Conduct of Business. Except as permitted by Section 7.05, each
Credit Party and its Restricted Subsidiaries will continue to engage primarily
in the businesses engaged in by such Credit Party or such Restricted Subsidiary
on the Closing Date, or such businesses as are reasonably related to the
businesses engaged in by such Credit Party or such Restricted Subsidiary on the
Closing Date.

Section 6.15 Further Assurances. Each Credit Party and its Restricted
Subsidiaries will cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.

Section 6.16 Inspections, etc.

(a) General. Each Credit Party and its Restricted Subsidiaries shall permit the
Lenders and the Administrative Agent, at the Credit Parties’ expense, to visit
and inspect any of the properties of any Credit Party accompanied by a
representative of the Credit Party or Restricted Subsidiary to the extent such
representative does not interfere with such inspection, to examine the books of
account of such Credit Party or such Restricted Subsidiary (and to make copies
thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of such Credit Party or such Restricted Subsidiary with, and to be
advised as to the same by, its and their officers, in each case, except when an
Event of Default shall have occurred and be continuing, at such reasonable times
and intervals and with prior or contemporaneous notice as the Administrative
Agent or any Lender may reasonably request; provided, so long as no Event of
Default shall have occurred and be continuing, such inspections shall not exceed
one time per Fiscal Year at the Borrower’s expense.

(b) Lender Call. If requested by the Administrative Agent, the Borrower shall
cause appropriate members of its management to participate in one conference
call with the Lenders per Fiscal Quarter at a time to be mutually agreed by the
Borrower and the Administrative Agent.

(c) [Reserved].

(d) Communications with Accountants. Each Credit Party and its Restricted
Subsidiaries authorize the Administrative Agent and the Lenders to communicate
directly with such Credit Party’s and such Restricted Subsidiaries’ independent
certified public accountants and authorizes such accountants to disclose to the
Administrative Agent and the Lenders any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
such Credit Party or such Restricted Subsidiary. At the request of the
Administrative Agent or any Lender, each Credit Party and its Restricted
Subsidiaries shall deliver a letter addressed to such accountants authorizing
them to communicate directly with the Administrative Agent and the Lenders in
accordance with the foregoing.

 

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Section 6.17 Unrestricted Subsidiaries.

The Borrower may at any time on or after the Closing Date designate any
Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted
Subsidiary as a Restricted Subsidiary; provided that

(a) immediately before and after giving effect to such designation, no Default
or Event of Default shall have occurred and be continuing,

(b) immediately after giving effect to such designation, the Borrower shall be
in pro forma compliance with the Financial Maintenance Covenant (it being
understood that if no Fiscal Quarter cited in Section 7.13 has ended, the
Financial Maintenance Covenant for the first Fiscal Quarter cited in
Section 7.13 shall be satisfied as of the last four quarters ended on or prior
to such designation) and the Borrower shall deliver to the Administrative Agent
a certificate setting forth in reasonable detail the calculations demonstrating
such compliance,

(c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a
“Restricted Subsidiary” for the purpose of any Indebtedness for borrowed money
permitted under Section 7.02 with an aggregate outstanding principal amount in
excess of $5,000,000, any Junior Indebtedness or Indebtedness incurred pursuant
to Section 7.02(c) (it being understood that, as of the Closing Date, each
Subsidiary (as defined in the ABL Credit Agreement as of the Closing Date) of
Parent is a “restricted subsidiary” under the ABL Credit Agreement) and

(d) no Intellectual Property may be owned directly or indirectly (including by
way of license) by an Unrestricted Subsidiary.

The designation of any Subsidiary as an Unrestricted Subsidiary after the
Closing Date shall constitute an Investment by the Borrower therein at the date
of designation in an amount equal to the fair market value of the Borrower’s
investment therein. The designation of any Unrestricted Subsidiary as a
Restricted Subsidiary shall constitute (i) the incurrence at the time of
designation of any Investment, Indebtedness and Liens of such Subsidiary
existing at such time and (ii) a return on any Investment by the Borrower in
such Subsidiary pursuant to the preceding sentence in an amount equal to the
fair market value at the date of such designation of the Borrower’s Investment
in such Subsidiary. Notwithstanding the foregoing, neither the Borrower nor any
direct or indirect parent of the Borrower that is a Subsidiary shall be
permitted to be an Unrestricted Subsidiary.

Section 6.18 Fiscal Year. Each Credit Party and its Restricted Subsidiaries will
maintain (i) accounting policies or reporting practices in accordance with GAAP
and (ii) their Fiscal Year ending December 31.

Section 6.19 Lien Waivers.

To the extent such Lien Waiver is required or otherwise obtained pursuant to the
ABL Credit Agreement, the ABL Loan Documents or any Permitted Refinancing
thereof, each Credit Party shall use commercially reasonable efforts to obtain a
Lien Waiver from (a) each mortgagee or beneficiary under a mortgage or deed of
trust with respect to all real property owned by such Credit Party, (b) each
lessor of all leased property leased by such Credit Party and (c) each

 

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warehouseman, processer, shipper, repairman, mechanic, bailee or other similar
Person in possession of any Collateral with respect to (x) each location in
Florida, Utah, Idaho, Texas, Indiana and Nebraska and such other states as the
Administrative Agent may determine and (y) any other distribution center,
warehouse, plant, factory or other similar location where any Collateral is
stored or located, which agreement shall be reasonably satisfactory in form and
substance to the Administrative Agent.

Section 6.20 Post-Closing Obligations.

Within the time periods specified on Schedule 6.20 (or such later date to which
the Administrative Agent consents), comply with the provisions set forth in
Schedule 6.20.

ARTICLE VII.

NEGATIVE COVENANTS

Each Credit Party signatory hereto covenants and agrees for itself and on behalf
of its Restricted Subsidiaries that, so long as any Lender shall have any
Commitment hereunder or any Loan or other Obligation (other than any Secured
Cash Management Obligation or Secured Hedge Obligation) remains outstanding:

Section 7.01 Investments. None of the Credit Parties nor any of its Restricted
Subsidiaries will make any Investment in any Person, except for Investments
which consist of:

(a) Investments comprised of notes payable, or stock or other securities issued
by account debtors to such Credit Parties or its Restricted Subsidiaries
pursuant to negotiated agreements with respect to settlement of such account
debtor’s accounts in the ordinary course of business;

(b) Capital Stock

(i) issued and outstanding on the Closing Date in its Subsidiaries in existence
on the Closing Date and

(ii) issued following the Closing Date by a Credit Party to another Credit
Party;

(c) Investments consisting of

(i) intercompany loans by and among the Credit Parties so long as the
Administrative Agent has a first priority, perfected Lien in such intercompany
loans and, if an Intercompany Note is issued to evidence such intercompany
loans, the Administrative Agent has received such Intercompany Note evidencing
such intercompany loans, together with transfer powers executed in blank in
connection therewith,

(ii) intercompany loans made by any Restricted Subsidiary to any Credit Party on
terms and conditions acceptable to the Administrative Agent, including the
Administrative Agent’s receipt of a Subordination Agreement, and

 

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(iii) intercompany loans by a Credit Party to any Restricted Subsidiary that is
not a Credit Party not to exceed $250,000 in the aggregate outstanding at any
time;

(d) Investments by a Restricted Subsidiary that is not a Credit Party in another
Restricted Subsidiary that is also not a Credit Party;

(e) Investments consisting of any Credit Party or any Restricted Subsidiary
Guaranteeing (i) the Obligations of the Credit Parties and (ii) other
Indebtedness if such Credit Party or such Restricted Subsidiary would be
permitted to directly incur such Indebtedness under Section 7.02 (other than
Section 7.02(f));

(f) Investments in cash or Cash Equivalents;

(g) Investments consisting of loans to its respective employees on an
arm’s-length basis in the ordinary course of business consistent with past
practices for travel expenses, relocation costs and similar purposes up to a
maximum of $50,000 per employee at any one time outstanding and $500,000 in the
aggregate at any one time outstanding;

(h) Permitted Acquisitions; provided, Investments in the form of Permitted
Acquisitions of entities that do not become Credit Parties shall not exceed the
greater of (x) $10,000,000 and (y) 17.0% of Consolidated EBITDA;

(i) Investments existing as of the Closing Date and set forth on Schedule 7.01;

(j) so long as no Event of Default set forth in Sections 8.01(a) and 8.01(e)
shall have occurred or be continuing or would result therefrom, Investments in
an amount not to exceed the Available Amount as of the date of such Investment;

(k) Investments in Unrestricted Subsidiaries not to exceed the greater of
(x) $10,000,000 and (y) 17.0% of Consolidated EBITDA;

(l) Investments in joint ventures and/or Restricted Subsidiaries that are not
Credit Parties not to exceed the greater of (x) $10,000,000 and (y) 17.0% of
Consolidated EBITDA;

(m) additional Investments so long as the pro forma First Lien Net Leverage
Ratio before and after giving effect to such Investments is no greater than 2.75
to 1.00 and

(n) other Investments not to exceed the greater of (x) $15,000,000 and (y) 25.0%
of Consolidated EBITDA in the aggregate outstanding at any time.

Section 7.02 Restrictions on Indebtedness. None of the Credit Parties nor any of
its Restricted Subsidiaries will incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:

(a) Indebtedness secured by purchase money security interests and Capitalized
Leases permitted by Section 7.03(a)(viii) and any Permitted Refinancing thereof;
provided, that the aggregate amount of such Indebtedness described in this
subclause (a) shall not exceed the greater of (x) $25,000,000 and (y) 42.0% of
Consolidated EBITDA, plus any additional amounts permitted to be incurred
pursuant to the definition of Permitted Refinancing;

 

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(b) Indebtedness of the Credit Parties consisting of the Obligations under the
Loan Documents;

(c) Indebtedness of the Credit Parties under the ABL Credit Agreement and any
Permitted Refinancing thereof; provided, that the aggregate amount of such
Indebtedness described in this subclause (c) shall not exceed $125,000,000 plus
any additional amounts permitted to be incurred pursuant to the definition of
Permitted Refinancing;

(d) Indebtedness of any Credit Party outstanding as of the Closing Date and
reflected on Schedule 7.02 hereto and any Permitted Refinancing thereof;

(e) unsecured Subordinated Debt incurred after the Closing Date on terms and
conditions acceptable to the Administrative Agent in its sole discretion,
provided that (i) the maturity date of such Subordinated Debt shall be at least
one hundred and eighty (180) days following the Maturity Date (after taking in
account any extension thereof as of the date of incurrence of such Subordinated
Debt) and (ii) the aggregate amount of such Subordinated Debt shall not exceed
$10,000,000;

(f) Indebtedness consisting of any Investment permitted by Sections 7.01(c),
(d) or (e);

(g) Guarantees by (i) any Credit Party of Indebtedness of any other Credit Party
permitted by this Section 7.02 (other than Section 7.02(k)), (ii) any Restricted
Subsidiary that is not a Credit Party of any Indebtedness of any Credit Party
permitted by this Section 7.02 (other than Section 7.02(k)) and (iii) any
Restricted Subsidiary that is not a Credit Party of any Indebtedness of any
other Restricted Subsidiary that is also not a Credit Party permitted by this
Section 7.02;

(h) Indebtedness consisting of contingent liabilities under surety bonds and
similar instruments incurred in the ordinary course of business;

(i) Indebtedness in respect of netting services, automatic clearing house
arrangements, treasury management services and similar arrangements in the
ordinary course of business in each case in connection with deposit and
securities account;

(j) [reserved];

(k) (i) unsecured Indebtedness under the 2018 Contingent Promissory Note in an
aggregate principal amount not to exceed $10,000,000, (ii) unsecured
Indebtedness under the 2019 Contingent Promissory Note in an aggregate principal
amount not to exceed $10,000,000, (iii) unsecured Indebtedness under the
Guaranty Promissory Note in an aggregate principal amount not to exceed
$10,000,000 and (iv) Guarantees of the Seller Notes pursuant to the Seller Note
Guaranty;

 

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(l) (i) Permitted Pari Passu Refinancing Debt, Permitted Junior Refinancing Debt
and Permitted Unsecured Refinancing Debt and (ii) any Permitted Refinancing
thereof;

(m) Indebtedness of the Credit Parties and their Restricted Subsidiaries
consisting of Cash Management Obligations and Unsecured Cash Management
Obligations;

(n) Indebtedness of the Credit Parties and their Restricted Subsidiaries
consisting of Hedge Obligations incurred in the ordinary course of business and
on a non-speculative basis;

(o) other Indebtedness not to exceed the greater of (x) $15,000,000 and
(y) $25.0% of Consolidated EBITDA in the aggregate outstanding at any time and

(p) Indebtedness consisting of Incremental Equivalent/Ratio Debt and any
Permitted Refinancing thereof; provided, that the aggregate amount of such
Indebtedness described in this subclause (p) shall not exceed the Incremental
Amount plus any additional amounts permitted to be incurred pursuant to the
definition Permitted Refinancing.

Section 7.03 Restrictions on Liens and Negative Pledges.

(a) Permitted Liens. None of the Credit Parties nor any Restricted Subsidiary of
any Credit Party will create or incur or suffer to be created or incurred or to
exist any Lien upon any of its property or assets of any character whether now
owned or hereafter acquired, or upon the income or profits therefrom other than:

(i) to the extent constituting a Lien, non-exclusive licenses of Intellectual
Property (other than to the extent such licenses would restrict the ability of
the Credit Party, a Restricted Subsidiary or the Administrative Agent to sell or
license the subject Intellectual Property or impair the security interests
granted to the Administrative Agent) in the ordinary course of business not
interfering with the business of any Credit Party or its Restricted
Subsidiaries;

(ii) leases or subleases of real property granted to third parties in the
ordinary course of business not interfering with the business of any Credit
Party or its Restricted Subsidiaries, so long as any such third party shall have
entered into a non-disturbance agreement in form and substance satisfactory to
the Administrative Agent;

(iii) Liens of landlords, carriers, warehousemen, mechanics and materialmen and
other like Liens created in the ordinary course of business, for amounts not yet
due or which are being contested in good faith by appropriate proceedings and as
to which adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;

(iv) pledges or deposits made in connection with worker’s compensation, employee
benefit plans, unemployment or other insurance, old age pensions, or other
Social Security benefits, and good faith deposits in connection with tenders,
contracts, bids, statutory obligations or leases to which it is a party or
deposits to secure, or in lieu of, surety, penalty or appeal bonds, performance
bonds, letters of credit and other similar obligations or arising as a result of
progress payments under government contracts or contracts with public utilities,
in each case, in the ordinary course of business;

 

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(v) minor defects, irregularities, encumbrances, easements, rights of way, and
clouds on title as normally exist with respect to similar properties which do
not materially interfere with the present or proposed use of the Credit Party’s
or its Restricted Subsidiaries’ real property;

(vi) Liens in favor of the Administrative Agent and the other Secured Parties
securing the Obligations;

(vii) Liens in existence on the Closing Date and listed on Schedule 7.03;
provided that (i) the Lien does not extend to any additional property and
(ii) to the extent such amount secured constitutes Indebtedness, such
Indebtedness is permitted by Section 7.02(d);

(viii) Liens created after the date hereof by conditional sale or other title
retention agreements (including Capitalized Leases and pursuant to
sale-leaseback transactions permitted by this Agreement) or in connection with
purchase money Indebtedness with respect to equipment and fixed assets acquired
by any Credit Party or its Restricted Subsidiaries, involving the incurrence of
an aggregate amount of purchase money Indebtedness and obligations with respect
to conditional sale or title retention agreements of not more than the greater
of (x) $25,000,000 and (y) 42.0% of Consolidated EBITDA outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within one
hundred twenty (120) days following such purchase and does not exceed 100% of
the purchase price of the subject assets);

(ix) Liens securing judgments for the payment of money not constituting an Event
of Default so long as the enforcement of such Lien has been effectively stayed
and so long as such Lien is junior to the Lien in favor of the Administrative
Agent granted under the Security Documents;

(x) Liens in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) and which are within the
general parameters customary in the banking industry to secure usual and
customary fees, returned items and other like exposure with respect to such
account relating to deposit or securities accounts maintained by Parent, the
Borrower or any of their Restricted Subsidiaries with such banking institution;

(xi) Liens securing Indebtedness permitted pursuant to Section 7.02(c);
provided, that (A) in the case of Liens on Collateral (other than ABL Priority
Liens), such Liens shall be junior in priority to the Liens that secure the
Obligations and (B) in the case of any ABL Priority Liens, such Liens may be
senior in priority to the Liens securing the Obligations and the Obligations
shall be secured by Liens on the applicable ABL Priority Collateral that are
pari passu with or junior to such ABL Priority Liens;

 

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(xii) other Liens not permitted above securing Indebtedness or other obligations
not to exceed the greater of (x) $10,000,000 and (y) 17.0% of Consolidated
EBITDA; provided that if on Collateral, such Liens shall be junior to the Liens
securing the Obligations and

(xiii) Liens securing Incremental Equivalent/Ratio Debt incurred pursuant to
clauses (a), (b) and (c)(i) and (ii) of the Incremental Amount and any Permitted
Refinancing thereof that modifies, refinances, refunds, renews or extends
secured Incremental Equivalent/Ratio Debt.

(b) Restrictions on Negative Pledges and Upstream Limitations. No Credit Party
shall nor shall any Restricted Subsidiary (x) enter into or permit to exist any
arrangement or agreement which directly or indirectly prohibits any Credit Party
or any Restricted Subsidiary from creating, assuming or incurring any Lien upon
its properties, revenues or assets whether now owned or hereafter acquired, or
from making Guarantees of the Obligations, or (y) enter into any agreement,
contract or arrangement restricting the ability of any Restricted Subsidiary of
any Credit Party to pay or make dividends or distributions in cash or kind to
any Credit Party or any Restricted Subsidiary, to make loans, advances or other
payments of whatsoever nature to any Credit Party or Restricted Subsidiary, or
to make transfers or distributions of all or any part of its assets to any
Credit Party or Restricted Subsidiary, in each case other than:

(i) this Agreement and the other Loan Documents,

(ii) the ABL Credit Agreement and the other ABL Loan Documents,

(iii) with respect to clause (x), the Seller Notes and the deed of trust listed
on Schedule 7.03 with respect to the Credit Parties’ new headquarters location,
and

(iv) customary anti-assignment provisions contained in leases, licensing
agreement and other agreements restricting the assignment thereof entered into
by any Credit Party or any Restricted Subsidiary in the ordinary course of its
business, but only if such anti-assignment provisions do not impair the
perfection or enforceability of the security interests granted to the
Administrative Agent.

Section 7.04 Restricted Payments; Prepayments of Junior Indebtedness.

(a) Restricted Payments. No Credit Party nor any Restricted Subsidiary shall
make any Restricted Payment, except

(i) Restricted Payments to a Credit Party;

(ii) Restricted Payments solely in shares of common stock or warrants to
purchase common stock so long as no Change of Control would result therefrom,

(iii) Restricted Payments in the form of splits of Capital Stock or
reclassifications of Capital Stock into additional shares of common stock,

 

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(iv) repurchases of Capital Stock in any Credit Party or any Restricted
Subsidiary deemed to occur upon “cashless” exercise of stock options or
warrants,

(v) any Permitted Tax Distributions by Parent (and any distribution to Parent by
any other Credit Party to allow Parent to make Permitted Tax Distributions),

(vi) so long as no Event of Default shall have occurred or be continuing or
would result therefrom, payments by the Borrower to Parent to enable Parent to
purchase, redeem, retire or otherwise acquire shares of its Capital Stock (or
options or rights to acquire its Capital Stock) held by current or former
officers, directors or employees of any Credit Party, in an aggregate cash
amount not exceeding the greater of (x) $5,000,000 and (y) 7.5% of Consolidated
EBITDA during any Fiscal Year for all such purchases, redemptions, retirements
and acquisitions during any Fiscal Year; provided, that unused amounts may be
carried forward to the two subsequent Fiscal Years (except to the extent such
unused amounts were previously twice carried forward),

(vii) Restricted Payments paid with the Net Issuance Proceeds Not Otherwise
Applied of the issuance of Qualified Capital Stock by Parent (or any direct or
indirect parent of Parent to the extent the cash proceeds of such equity
issuance by such parent of Parent are contributed to Parent) in an amount not to
exceed the net cash proceeds received by Parent,

(viii) so long as (A) no Event of Default shall have occurred or be continuing
or would result therefrom and (B) the pro forma First Lien Net Leverage Ratio
before and after giving effect to such Restricted Payments is no greater than
3.75 to 1.00, Restricted Payments in an amount not to exceed the Available
Amount on the date of such Restricted Payment,

(ix) so long as (A) no Event of Default shall have occurred or be continuing or
would result therefrom and (B) the pro forma First Lien Net Leverage Ratio
before and after giving effect to such Restricted Payments is no greater than
2.25 to 1.00, an unlimited amount of Restricted Payments and

(x) so long as no Event of Default shall have occurred or be continuing or would
result therefrom, other Restricted Payments not to exceed the greater of
(x) $5,000,000 and (y) 7.5% of Consolidated EBITDA in the aggregate.

(b) Junior Indebtedness Payments. No Credit Party nor any Restricted Subsidiary
shall pay, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Junior Indebtedness other than:

(i) with respect to any Subordinated Debt incurred after the Closing Date, those
payments expressly permitted to be made under the Subordination Agreement
applicable thereto,

 

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(ii) so long as no Default or Event of Default exists and is continuing before
and after giving effect thereto, (A) with respect to the 2018 Contingent Note,
interest payments in accordance with Section 7(b)(iii) of the 2018 Contingent
Note as of the Closing Date, (B) with respect to the 2019 Contingent Note,
interest payments in accordance with Section 7(b)(iii) of the 2019 Contingent
Note as of the Closing Date and (C) with respect to the Guaranty Promissory
Note, interest payments in accordance with Section 7 of the Guaranty Promissory
Note as of the Closing Date, in each case, in an amount not to exceed the amount
set forth in the applicable Seller Note as of the Closing Date and to be paid on
a date no earlier than those dates set forth in the applicable Seller Note,

(iii) with respect to the Seller Notes, payments with respect to Indebtedness
thereunder that are “payment-in-kind” and capitalized, compounded and added to
the unpaid principal amount of the applicable Seller Note,

(iv) [reserved],

(v) so long as (A) no Event of Default shall have occurred or be continuing or
would result therefrom and (B) the pro forma First Lien Net Leverage Ratio
before and after giving effect to such prepayments of Junior Indebtedness is no
greater than 3.75 to 1.00, prepayments of Junior Indebtedness in an aggregate
amount not exceed the Available Amount on the date of such prepayment,

(vi) so long as no Event of Default shall have occurred or be continuing or
would result therefrom, additional prepayments of Junior Indebtedness subject to
a pro forma First Lien Net Leverage Ratio before and after giving effect to such
prepayments of Junior Indebtedness is no greater than 2.50 to 1.00 and

(vii) so long as no Default or Event of Default shall have occurred or be
continuing or would result therefrom, other prepayments of Junior Indebtedness
not to exceed the greater of (x) $5,000,000 and (y) 7.5% of Consolidated EBITDA
in the aggregate.

Section 7.05 Merger, Consolidation and Disposition of Assets.

(a) Mergers and Acquisitions. None of the Credit Parties nor any Restricted
Subsidiary will become a party to any merger, dissolution, liquidation or
consolidation, except for, so long as no Default or Event of Default is
continuing or would result therefrom:

(i) Permitted Acquisitions; provided, that Permitted Acquisitions of entities
that do not become Credit Parties shall not exceed the greater of $10,000,000
and 17.0% of Consolidated EBITDA;

(ii) the merger or consolidation of (A) one or more of Credit Parties or their
Restricted Subsidiaries (other than Parent, the Borrower or any direct or
indirect parent of the Borrower) with and into (B) another Credit Party (other
than Parent or any direct or indirect parent of the Borrower) where such Credit
Party is the surviving entity (for the avoidance of doubt, such merger or
consolidation involves the Borrower, the Borrower shall be the surviving
entity);

 

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(iii) the merger or consolidation of any Restricted Subsidiary that is not a
Credit Party with any other Restricted Subsidiary that is not a Credit Party;
and

(iv) the merger or consolidation of any Credit Party (other than Parent,
Borrower or any direct or indirect Parent of the Borrower) with any Restricted
Subsidiary that is not a Credit Party to the extent such merger or consolidation
consists of any Investment permitted pursuant to Section 7.01(l), (m) or (n).

(b) Disposition of Assets. No Credit Party nor any Restricted Subsidiary shall
dissolve, liquidate or sell, transfer, convey, assign or otherwise dispose of
any of its properties or other assets, including any Capital Stock of any of its
Subsidiary (whether in a public or a private offering or otherwise), any of its
receivables or any of its other investments, other than:

(i) the sale of inventory in the ordinary course of business;

(ii) dispositions of assets among Credit Parties (other than Capital Stock of
Subsidiaries);

(iii) dispositions of obsolete or worn out equipment or fixtures no longer
useful in the business, whether now owned or hereafter acquired, in the ordinary
course of business;

(iv) termination of a lease of real or personal property that is not necessary
for the ordinary course of business, could not reasonably be expected to have a
Material Adverse Effect and does not result from a Credit Party’s default;

(v) so long as no Default or Event of Default is continuing or would result
therefrom, sales of equipment now owned or hereafter acquired by any Credit
Party or a Restricted Subsidiary, the fair market value or book value of which
shall not exceed $500,000 in the aggregate;

(vi) non-exclusive licenses of Intellectual Property in the ordinary course of
business (other than to the extent such licenses would restrict the ability of
the Credit Party, a Restricted Subsidiary or the Administrative Agent to sell or
license the subject Intellectual Property or impair the security interests
granted to the Administrative Agent);

(vii) any sale, transfer or other disposition of all Capital Stock of the Mark
and Chappell Entities, or all or substantially all of the assets of the Mark and
Chappell Entities; provided, that prior to and after giving effect to any such
transaction, no Default or Event of Default shall have occurred and be
continuing;

(viii) so long as (A) no Default or Event of Default is continuing or would
result therefrom and (B) sales of other assets of any Credit Party or their
Restricted Subsidiaries for fair market value so long as, to the extent the fair
market value of such assets exceeds $1,000,000, at least 75% of the total
consideration of such sale is in the form of cash and Cash Equivalents (in each
case, free and clear of all Liens at the time received, other than
non-consensual Liens permitted pursuant to Section 7.03); provided, however,
that, any Designated Non-Cash Consideration received by such Credit Party or
Restricted

 

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Subsidiary from such sale shall be deemed to constitute cash so long as the
aggregate fair market value thereof (measured at the time such Designated
Non-Cash Consideration is received), when taken together with all other
Designated Non-Cash Consideration received pursuant to this proviso since the
Closing Date, does not exceed the greater of (x) $15,000,000 and 25.0% of
Consolidated EBITDA in the aggregate and

(ix) other disposition of assets not to exceed the greater of (x) $2,500,000 and
(y) 4.25% of Consolidated EBITDA in the aggregate.

Section 7.06 [Reserved].

Section 7.07 [Reserved].

Section 7.08 Transactions with Affiliates. No Credit Party nor any Restricted
Subsidiary will engage in any transaction with a value in excess of $2,500,000
with any Affiliate or its or any of its Affiliate’s employees, officers or
directors, whether or not in the ordinary course of business, including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate, on terms less
favorable to such Credit Party or Restricted Subsidiary or Affiliate than would
have been obtainable on an arm’s-length basis in the ordinary course of
business, provided, that the foregoing restriction shall not apply to:

(a) transactions solely among the Credit Parties otherwise permitted hereunder,

(b) transactions solely among Restricted Subsidiaries that are not Credit
Parties otherwise permitted hereunder;

(c) the issuance by Parent of any Qualified Capital Stock to any Affiliate so
long as no Change of Control shall result therefrom; and

(d) Existing Affiliate Transactions.

All such affiliate transactions described in this Section 7.08 and having
occurred on or before the Closing Date are listed on Schedule 7.08 (such
affiliate transactions, “Existing Affiliate Transactions”).

Section 7.09 [Reserved].

Section 7.10 Change in Terms of Governing Documents. No Credit Party nor any
Restricted Subsidiary shall change or amend, modify, supplement or waive the
terms of (a) any of its Governing Documents, except amendments, modifications,
supplements or waivers that do not adversely affect the rights or interests of
the Administrative Agent or the Lenders or (b) any Junior Indebtedness if after
giving effect to such amendment, modification, supplement or waiver, the
obligors with respect to such Junior Indebtedness would not have been permitted
to incur, guarantee or secure such Junior Indebtedness, pursuant to the terms
hereof if such Junior Indebtedness, as amended, modified, supplemented or
waived, was incurred, guaranteed or secured as a Permitted Refinancing in
respect of such Junior Indebtedness.

 

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Section 7.11 [Reserved].

Section 7.12 [Reserved].

Section 7.13 Financial Maintenance Covenant. The Credit Parties shall not permit
the First Lien Net Leverage Ratio, determined as of the end of the applicable
Fiscal Quarter, to be less than the ratio set forth below:

 

Fiscal Quarter Ending

  

First Lien Net Leverage Ratio

December 31, 2019

   6.25 to 1.00

March 31, 2020

   6.25 to 1.00

June 30, 2020

   6.25 to 1.00

September 30, 2020 and each Fiscal Quarter ending thereafter

   5.75 to 1.00

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

Section 8.01 Events of Default. Any one or more of the following events shall
constitute an event of default (each, an “Event of Default”) under this
Agreement:

(a) Non-Payment. Any Credit Party shall fail to pay (i) any principal of the
Loans when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment; or (ii) any interest on the Loans, the fees or other sums due hereunder
or under any of the other Loan Documents, within five (5) Business Days (or with
respect to the fees and other sums, ten (10) Business Days) after the same shall
become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;

(b) Specific Covenants. Any Credit Party shall fail to comply with any of its
covenants contained in Section 6.05(a), Section 6.06(a) (with respect to Parent,
the Borrower or any direct or indirect parent of Borrower), Section 6.20 or
Article 7;

(c) Other Defaults. Any Credit Party shall fail (or, to the extent applicable,
fail to cause its Restricted Subsidiaries) to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this Section 8.01) and such failure continues for
thirty (30) days after written notice thereof to the Borrower from the
Administrative Agent;

(d) Representations and Warranties. (i) Any Credit Party shall fail (or, to the
extent applicable, fail to cause its Restricted Subsidiaries) to cure, in the
case of representations and warranties that are reasonably capable of cure, any
representation or warranty of any Credit Party in this Agreement or any of the
other Loan Documents or in any other document or instrument delivered pursuant
to or in connection with this Agreement proved to have been false in any
material respect (but without any duplication of any materiality qualifications)
upon the date when made or deemed to have been made or repeated, and such
failure continues for thirty

 

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(30) days from the making or deemed making of such representation or (ii) any
other representation or warranty of any Credit Party in this Agreement or any of
the other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Agreement shall prove to have been false
in any material respect (but without any duplication of any materiality
qualifications) upon the date when made or deemed to have been made or repeated;

(e) Inability to Pay Debt; Insolvency Proceedings; Etc. Any Credit Party or any
of its Restricted Subsidiaries (other than an Immaterial Subsidiary) shall make
an assignment for the benefit of creditors, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of such
Credit Party or such Restricted Subsidiary or of any substantial part of the
assets of any Credit Party or such Restricted Subsidiary or shall commence any
case or other proceeding relating to any Credit Party or such Restricted
Subsidiary under any Debtor Relief Law, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the foregoing, or if
any such petition or application (including a bankruptcy application) shall be
filed or any such case or other proceeding shall be commenced against any Credit
Party or such Restricted Subsidiary and such Credit Party or such Restricted
Subsidiary shall indicate its approval thereof, consent thereto or acquiescence
therein or such petition or application shall not have been dismissed or stayed
within sixty (60) days following the filing thereof; a decree or order
(including a bankruptcy order) is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Credit Party or any
Restricted Subsidiary (other than an Immaterial Subsidiary) bankrupt or
insolvent, or approving a petition or a bankruptcy application in any such case
or other proceeding, or a decree or order (including a bankruptcy order) for
relief is entered in respect of any Credit Party or any Restricted Subsidiary
(other than an Immaterial Subsidiary) in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;

(f) Judgments. There shall remain in force for more than thirty (30) days,
whether or not consecutive, any final judgment against any Credit Party or a
Restricted Subsidiary (considered collectively) that exceeds in the aggregate
$17,500,000 which is not covered by insurance policies as to which coverage has
been accepted unless such judgment has been discharged, satisfied, bonded or
stayed pending appeal;

(g) ERISA Event. An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Credit Parties or any Restricted Subsidiary under Title IV
of ERISA to a Pension Plan, Multiemployer Plan or the PBGC or the Borrower or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan, in each case,
if such ERISA Event could have a Material Adverse Effect;

(h) Indebtedness. Any Credit Party or any Restricted Subsidiary shall fail to
pay at maturity, or within any applicable period of grace, any obligation for
Indebtedness in excess of $17,500,000 (net of amounts covered by insurance
policies as to which coverage has been accepted or this party indemnities), or
fail to observe or perform any term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing Indebtedness in excess of
$17,500,000 (net of amounts covered by insurance policies as to which coverage
has

 

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been accepted or this party indemnities) for such period of time as would permit
(assuming the lapse of time and/or giving of appropriate notice if required and
assuming such breach has not been cured within the applicable grace period
thereunder) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;

(i) Invalidity of Loan Documents; Etc. If any of the Loan Documents shall be
cancelled, terminated, revoked, rescinded or otherwise ceases to be in full
force and effect other than in accordance with their terms; or the
Administrative Agent’s security interests, mortgages or Liens in the Collateral
shall cease to be valid and perfected, or shall cease to have the priority
contemplated by the Security Documents, other than in accordance with the terms
thereof or with the express prior written agreement of the Lenders; or any
action at law, suit or in equity or other legal proceeding to cancel, revoke,
rescind or declare void any of the Loan Documents shall be commenced by or on
behalf of any Credit Party, any Restricted Subsidiary or any of their respective
equity holders or Affiliates; or any court or any other Governmental Authority
shall make a determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof; or any Credit Party shall
otherwise contest the validity or enforceability of any Loan Document in writing
or deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Loan Document to which it is a party or
shall otherwise contest the validity or perfection of any Lien on any Collateral
(other than, solely with respect to perfection, as expressly provided in the
Security Agreement) purported to be covered by the Security Agreement.

(j) Change of Control. A Change of Control shall occur;

(k) Licenses, Permits, Etc. There shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit (including, without limitation,
any Pharmaceutical License) now held or hereafter acquired by any Credit Party
if such loss, suspension, revocation or failure to renew could have a Material
Adverse Effect.

Section 8.02 Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent may, or at the request of the Required
Lenders, shall take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Credit Parties; and

(c) exercise on behalf of itself and the other Secured Parties all rights and
remedies available to it and the other Secured Parties under the Loan Documents,
applicable law or equity;

provided, however, that upon the occurrence of an Event of Default under
Section 8.01(e), the obligation of each Lender to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, in each case without further act of the Administrative Agent or any
Lender. No termination of the commitments hereunder shall relieve any Credit
Party of any of the Obligations.

 

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Section 8.03 Application of Funds. In the event that, following the occurrence
and during the continuance of any Event of Default, the Administrative Agent or
any Lender receives any monies in connection with the enforcement of any of the
Loan Documents, or otherwise with respect to the realization upon any of the
Collateral, the Administrative Agent may apply (and shall apply at (a) the
request of the Required Lenders or (b) following the exercise of remedies
pursuant to Section 8.02, including without limitation, pursuant to the proviso
thereof) such monies as follows (and each Lender shall comply with the
instructions of the Administrative Agent in the case of any such monies received
by such Lender):

(i) First, to payment of that portion of the Obligations owing to the
Administrative Agent constituting (A) indemnities and expenses due and payable
under this Agreement and the other Loan Documents (including reasonable and
documented fees, charges and disbursements of counsel to the Administrative
Agent), and (B) the fees due and payable under the Fee Letter;

(ii) Second, to the payment of that portion of the Obligations constituting
(A) indemnities and expenses (including reasonable and documented fees, charges
and disbursements of counsel to the Lenders and amounts payable under Article
III) due and payable to the Lenders under this Agreement and the other Loan
Documents, (B) accrued and unpaid interest and fees (including, any amounts
payable pursuant to Section 2.05(i)) due and payable to the Lenders, (C) unpaid
principal of the Term Loans, ratably among the holders thereof, (D) Secured Cash
Management Obligations then owing under Secured Cash Management Agreements and
(E) Secured Hedge Obligations then owing under Secured Hedge Agreements;

(iii) Third, the payment in full of all other Obligations due and payable
ratably among the holders thereof; and

(iv) Fourth, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

All payments applied to the Loans pursuant to this Section 8.03 shall be applied
to the Loans owing to the Lenders in accordance with their respective Applicable
Percentages.

ARTICLE IX.

ADMINISTRATIVE AGENT

Section 9.01 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints Ares Capital Corporation to
act on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are

 

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solely for the benefit of the Administrative Agent and the Lenders, and neither
the Borrower nor any other Credit Party shall have rights as a third party
beneficiary of any of such provisions. It is understood and agreed that the use
of the term “agent” herein or in any other Loan Document (or any other similar
term) with reference to the Administrative Agent is not intended to connote any
fiduciary duty or other implied (or express) obligations arising under agency
doctrine of any applicable requirements of Law. Instead such term is used as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between contracting parties.

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (including in its capacity as a
potential Cash Management Bank or Hedge Bank) hereby irrevocably appoints and
authorizes the Administrative Agent to act as the collateral agent of such
Lender for purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Credit Parties to secure any of the
Obligations, together with such powers and discretion as are reasonably
incidental thereto. In this connection, the Administrative Agent, as “collateral
agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the
Administrative Agent pursuant to Section 9.05 for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Security Documents, or for exercising any rights and remedies thereunder at the
direction of the Administrative Agent, shall be entitled to the benefits of all
provisions of this Article IX and Article X, as though such co-agents,
sub-agents and attorneys-in-fact were the “collateral agent” under the Loan
Documents as if set forth in full herein with respect thereto.

Section 9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, own
securities of, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Credit Parties or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

Section 9.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents and its duties hereunder shall be administrative in nature.
Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel,

 

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may expose it to liability or that is contrary to any Loan Document or
applicable law, including, for the avoidance of doubt, any action that may be in
violation of the automatic stay under any Debtor Relief Law or that may effect a
forfeiture, modification or termination of property of a Lender in violation of
any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Credit Parties or any of their
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of their Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 8.02, 8.03 and 10.01) or (ii) in the
absence of its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction in a final non-appealable order. The
Administrative Agent shall be deemed not to have knowledge of any Default or
Event of Default unless and until notice describing such Default or Event of
Default is given to the Administrative Agent by a Credit Party or a Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or the creation, perfection or priority of any Lien purported to be
created by the Security Documents, (v) the value or the sufficiency of any
Collateral, or (vi) the satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.

Section 9.04 Reliance by Agents.

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, that by its
terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. The Administrative Agent may consult with
legal counsel, independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

 

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Section 9.05 Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent. The Administrative
Agent shall not be responsible for the negligence or misconduct of any
sub-agents except to the extent that a court of competent jurisdiction
determines in a final and nonappealable judgment that the Administrative Agent
acted with gross negligence or willful misconduct in the selection of such
sub-agents.

Section 9.06 Resignation of Agents. The Administrative Agent may resign at any
time by giving not less than thirty (30) days’ prior written notice of its
resignation to the Lenders and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor, which shall be an Affiliate of the Lenders or
other bank or financial institution with an office in the United States. If no
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders appoint a successor meeting
the qualifications set forth above; provided that if the retiring Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed) and (2) except for any indemnity payments or other amounts then owed
to the retiring Administrative Agent, all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor as provided for above in this Section. Upon
the acceptance of a successor’s appointment hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article 9 and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub agents and its respective Related Parties in respect of any actions taken or
omitted to be taken by any of them prior to such resignation.

 

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Section 9.07 Non-Reliance. Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent, any other Lender or any of
their Related Parties, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, any other Lender or any of their Related
Parties, and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder. Each
Lender, by delivering its signature page to this Agreement or an Assignment and
Assumption shall be deemed to have acknowledged receipt of, and consented to and
approved, each Loan Document and each other document required to be approved by
the Administrative Agent, Required Lenders or Lenders, as applicable, on the
Closing Date or as of the date of the establishment of any new Commitments or
funding of any Term Loans, in each case, after the Closing Date.

Section 9.08 [Reserved]

Section 9.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.09 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

 

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Section 9.10 Collateral and Guarantee Matters. Each of the Lenders (including in
its capacity as a potential Cash Management Bank or Hedge Bank) irrevocably
authorizes the Administrative Agent at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full in cash of all Obligations (other than contingent
indemnification obligations), (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder (other than sales among Credit
Parties), or (iii) subject to Section 10.01, if approved, authorized or ratified
in writing by the Required Lenders;

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.03(a); and

(c) to release any Guarantor from its obligations under the Security Documents
and release any related Collateral if such Person ceases to be a Restricted
Subsidiary as a result of a transaction permitted by Section 7.05.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guarantees pursuant to this
Section 9.10.

The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Credit Party in connection therewith, nor shall the
Administrative Agent be responsible or liable to the Lenders for any failure to
monitor or maintain any portion of the Collateral.

Section 9.11 Disbursement and Collection Duties. Subject to Section 8.03, the
Administrative Agent shall have the sole and exclusive right and authority (to
the exclusion of the Lenders), and is hereby authorized, to act as the
disbursing and collecting agent for the Lenders with respect to all payments and
collections arising in connection with the Loan Documents, and each Person
making any payment in connection with any Loan Document to any Secured Party is
hereby authorized to make such payment to the Administrative Agent.

Section 9.12 Secured Cash Management Agreements.

(a) Except as otherwise expressly set forth herein, no Cash Management Bank that
obtains the benefit of the provisions of Section 8.03, any Guarantee or any
Collateral by virtue of the provisions hereof or any Security Document shall
have any right to notice of any action or to consent to, direct or object to any
action hereunder or under any other Loan Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) (or

 

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to notice of or to consent to any amendment, waiver or modification of the
provisions hereof or of any Guaranty or any Security Document) other than in its
capacity as a Lender and, in such case, only to the extent expressly provided in
the Loan Documents. Notwithstanding any other provision of this Article IX to
the contrary, the Administrative Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Secured Cash Management Obligations arising under Secured Cash Management
Agreements except to the extent expressly provided herein and unless the
Administrative Agent has received a Secured Party Designation Notice of such
Obligations, together with such supporting documentation as the Administrative
Agent may request, from the applicable Cash Management Bank. The Administrative
Agent shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Secured Cash Management Obligations
arising under Secured Cash Management Agreements in the case of the termination
of this Agreement.

(b) Except as otherwise expressly set forth herein, no Hedge Bank that obtains
the benefit of the provisions of Section 8.03, any Guarantee or any Collateral
by virtue of the provisions hereof or any Security Document shall have any right
to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) (or to notice
of or to consent to any amendment, waiver or modification of the provisions
hereof or of any Guaranty or any Security Document) other than in its capacity
as a Lender and, in such case, only to the extent expressly provided in the Loan
Documents. Notwithstanding any other provision of this Article IX to the
contrary, the Administrative Agent shall not be required to verify the payment
of, or that other satisfactory arrangements have been made with respect to,
Secured Hedge Obligations arising under Secured Hedge Agreements except to the
extent expressly provided herein and unless the Administrative Agent has
received a Secured Party Designation Notice of such Obligations, together with
such supporting documentation as the Administrative Agent may request, from the
applicable Hedge Bank. The Administrative Agent shall not be required to verify
the payment of, or that other satisfactory arrangements have been made with
respect to, Secured Hedge Obligations arising under Secured Hedge Agreements in
the case of the termination of this Agreement.

ARTICLE X.

MISCELLANEOUS

Section 10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Credit Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Credit
Party, as the case may be, and acknowledged by the Administrative Agent and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:

(a) extend, increase or decrease the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;

 

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(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby; provided that for the avoidance of
doubt, mandatory prepayments pursuant to Section 2.05 may be postponed, delayed,
reduced, waived or modified with the consent of the Required Lenders;

(c) reduce the principal of, or the rate of interest specified herein on, any
Loan or (subject to clause (iii) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document,
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be necessary to
amend the definition of “Default Rate” or to waive any obligation of the
Borrower to pay interest or any fees due hereunder at the Default Rate;

(d) change Section 2.05(h), Section 2.13 or Section 8.03 in a manner that would
alter the pro rata sharing of payments required thereby or the order of the
application of payments thereunder, in each case, without the written consent of
each Lender;

(e) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder without the written consent of each
Lender; or

(f) (i) release all or substantially all of the Collateral in any transaction or
series of related transactions, (ii) release all or substantially all of the
Guarantors party to the Guarantees, (iii) subordinate the Obligations hereunder
to any other Indebtedness (except as otherwise permitted by Section 7.03(a)(xi))
or (iv) except as provided by operation of applicable law, subordinate the Liens
on all or substantially all of the Collateral granted in favor of the
Administrative Agent for itself and the other Secured Parties under the Security
Documents to any other Lien (other than Liens permitted by Section 7.03(a)(xi)),
in each case, without the written consent of each Lender;

provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document, (ii) Section 10.06(h) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender assigning all or any part of Loans that are being funded by an SPC at the
time of such amendment, waiver or other modification and (iii) the Fee Letter
may be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto. Notwithstanding anything to the contrary herein, no
Lender that is a Credit Party or any Affiliate of any Credit Party
(collectively, the “Disqualified Lenders”) shall have any right to exercise any
voting, consent, elective or request right as a Lender, approve or disapprove
any amendment, waiver or consent hereunder (and any amendment, waiver or consent
which by its terms requires the consent of all Lenders may be effected with the
consent of all Lenders other than Disqualified Lenders), except that (x) the
Commitment of any Disqualified Lender may not be increased or extended without
the consent of such Disqualified Lender and (y) any waiver, amendment or the
modification requiring the consent of all Lenders or each affected Lender that
by its terms affects any Disqualified Lender more adversely than other affected
Lenders shall require the consent of such Disqualified Lender.

 

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Section 10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, any other Credit Party or the Administrative Agent, to
the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient). Notices and other
communications sent delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
through any Electronic Medium) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, each in its
discretion, agree to accept notices and other communications to it or to them
hereunder by electronic communications pursuant to procedures approved by it or
them, provided that approval of such procedures may be limited to particular
notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

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(c) Change of Address, Etc. Each of the Borrower and the Administrative Agent
may change its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic or electronic Loan Advance Requests) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent, each Lender and the Related Parties of each of them
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the Borrower.
All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

Section 10.03 No Waiver; Cumulative Remedies.

No failure by any Lender or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Credit Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies
that inure to its benefit (solely in its capacity as Administrative Agent)
hereunder and under the other Loan Documents, (b) any Lender from exercising
setoff rights in accordance with Section 10.08 (subject to the terms of
Section 2.13), or (c) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to any Credit Party under any Debtor Relief Law; and provided, further, that if
at any time there is no Person acting as Administrative Agent hereunder and
under the other Loan Documents, then (i) the Required Lenders shall have the
rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02
and (ii) in addition to the matters set forth in clause (b) of the preceding
proviso and subject to Section 2.13, any Lender may, with the consent of the
Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

 

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Section 10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable documented
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable and documented fees, charges and disbursements of one
firm of outside counsel for such Persons, one local or special counsel to such
Persons in any relevant jurisdiction and one regulatory counsel), in connection
with the syndication of the credit facilities provided for herein, the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) [reserved] and
(iii) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent or any Lender, which, in the case of any Lender, other than
the Administrative Agent and its Affiliates, shall be limited to one firm of
outside counsel for all such Lenders, one local or special counsel to such
Persons in any relevant jurisdiction and one regulatory counsel (and, in the
case, of an actual or perceived conflict of interest, one additional counsel for
all such similarly affected persons, one additional local or special counsel for
all such similarly affected persons and one regulatory counsel for all such
similarly affected persons) (including the reasonable and documented fees,
charges and disbursements of counsel) in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such reasonable and documented
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements of any outside counsel
for any Indemnitee which, in the case of the Lenders and other Indemnitees
(other than the Administrative Agent and its Affiliates) shall be limited to one
firm of outside counsel for all such Lenders, one local or special counsel in
any relevant jurisdiction and one regulatory counsel (and, in the case of an
actual or perceived conflict of interest, one additional counsel for all such
similarly affected persons, one additional local or special counsel for all such
similarly affected persons in any relevant jurisdiction and one regulatory
counsel for all such similarly affected persons)), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Credit Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and each of its Related
Parties only, the administration of this Agreement and the other Loan Documents,
(ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
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operated by the Borrower or any other Credit Party, or any Environmental
Liability related in any way to the Borrower or any other Credit Party, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by or against a third party or by or against the
Borrower or any other Credit Party, and regardless of whether any such
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Credit Parties against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such other Credit Parties has obtained a
final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction. Without limiting the provisions of
Section 3.01(c), this Section 10.04(b) shall not apply with respect to Taxes
other than any Taxes that represent losses, claims, damages, etc. arising from
any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to pay any amount required under subsection (a) or (b) of this Section to
be paid by it to the Administrative Agent (and any sub-agent thereof) or any
Related Party of the Administrative Agent, each Lender severally agrees to pay
to the Administrative Agent (and any sub-agent thereof) or such Related Party,
as the case may be, such Lender’s pro rata share of sum of the Aggregate
Commitments and the Outstanding Amounts (in each case, determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent (and any sub-agent thereof) in its
capacity as such, or against any Related Party of any of the foregoing acting
for the Administrative Agent (and any sub-agent thereof) in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower and each other Credit Party shall not assert, and
the Borrower and each other Credit Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee
referred to in subsection (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than
ten (10) Business Days after demand therefor.

 

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(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

Section 10.05 Payments Set Aside. To the extent that any payment by or on behalf
of any Credit Party is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or, if permitted hereunder, such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

Section 10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Credit Party may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (e) of this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection
(d) of this Section, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders, and solely with
respect to Section 10.04(b), each Indemnitee) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:

(i) Except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
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outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $1,000,000 in the case of any assignment, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been met.

(ii) Each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
with respect to the Loans or the Commitments assigned.

(iii) No consent shall be required for any assignment except to the extent
required by subsection (b)(i) and (b)(v) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund, provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within seven (7) Business
Days after having received notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.

(iv) The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount of $3,500 payable to the Administrative Agent;
provided, however, that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(v) Except as agreed by the Administrative Agent and the Required Lenders (a) no
such assignment shall be made (I) to any Credit Party or any Affiliate or
Subsidiary of any Credit Party, (II) [reserved] or (III) to a natural person and
(b) subject to Section 10.06(b)(vi), prior to a Specified Event of Default, no
such assignment shall be made to any Prohibited Assignee. In addition, the
consent of the Borrower shall be required with respect to any assignment
(x) prior to an Event of Default, with respect to an assignment to the Persons
described in clause (a)(III), and (y) prior to a Specified

 

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Event of Default, with respect to an assignment to the Persons described in
clause (b). For the avoidance of doubt, the consent of the Borrower shall not be
required following an Event of Default in the case of an assignment described in
clause (x) of the preceding sentence or following a Specified Event of Default
in the case of an assignment described in clause (y) of the preceding sentence.

(vi) Prior to any assignment to a Prohibited Assignee following a Specified
Event of Default pursuant to Section 10.06(b)(v)(b), (x) the Borrower shall have
five (5) Business Days following notice to Borrower of any proposed assignment
to a Prohibited Assignee to repay all Obligations together with all accrued and
unpaid interest and fees thereon (including, for the avoidance of doubt, any
amounts payable pursuant to Section 2.05(i)) and (y) the Sponsors shall have
five (5) Business Days following notice to Borrower of any proposed assignment
to a Prohibited Assignee to purchase from the Lenders in immediately available
funds the full amount (at par) of all Obligations together with all accrued and
unpaid interest and fees thereon (including, for the avoidance of doubt, any
amounts payable pursuant to Section 2.05(i)), all in amounts as specified by the
Administrative Agent and determined in good faith and subject to documentation
reasonably acceptable to the Administrative Agent and without recourse or
warranty.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits and obligations of Sections 3.01, 3.04, 3.05, and
10.04 with respect to facts and circumstances occurring prior to the effective
date of such assignment. Upon request, the Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender. Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of the Borrower (and such agency being solely for tax
purposes), shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts (and stated interest) of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

 

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(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than, prior to an Event of Default, a natural Person, a Prohibited
Assignee or any Credit Party or any Affiliate or Subsidiary of any Credit Party)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. For the avoidance of doubt, each
Lender shall be responsible for the indemnity under Section 10.04(c) without
regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section (it being understood that
the documentation required under Section 3.01(e) shall be delivered to the
Lender who sells the participation) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (b) of this
Section; provided that such Participant (A) agrees to be subject to the
provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph
(b) of this Section and (B) shall not be entitled to receive any greater payment
under Sections 3.01 or 3.04, with respect to any participation, than the Lender
from whom it acquired the applicable participation would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation. Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 3.06 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower (solely for tax purposes),
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, or other obligation is in registered
form under Section 5f.103-1(c) and Proposed Section 1.163-5(b) of the United
States Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as such)
shall have no responsibility for maintaining a Participant Register.

 

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(e) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(f) [Reserved].

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h) Special Purpose Funding Vehicles. Notwithstanding any provision to the
contrary, any Lender (a “Granting Lender”) may assign to one or more special
purpose funding vehicles (each, an “SPC”) all or any portion of its funded
Loans, without the consent of any Person or the payment of a fee, by execution
of a written assignment agreement in a form agreed to by such Granting Lender
and such SPC, and may grant any such SPC the option, in such SPC’s sole
discretion, to provide the Borrower all or any part of any Loans that such
Lender would otherwise be obligated to make pursuant to this Agreement. Such
SPCs shall have all the rights which a Lender making or holding such Loans would
have under this Agreement, but no obligations. The Granting Lender making such
assignment shall remain liable for all its original obligations under this
Agreement, including its Commitment (although the unused portion thereof shall
be reduced by the principal amount of any Loans held by an SPC). Notwithstanding
such assignment, the Administrative Agent and Borrower may deliver notices to
the Granting Lender making such assignment (as agent for the SPC) and not
separately to the SPC unless the Administrative Agent and Borrower are requested
in writing by the SPC (or its agent) to deliver such notices separately to it.
The Borrower shall, at the request of any such Granting Lender, execute and
deliver to such Person, as such Lender may designate, a Note in the amount of
such Granting Lender’s original Note to evidence the Loans of such Granting
Lender and related SPC.

Section 10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ Related Parties (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over such Person or its Related
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such as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower, (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent or any Lender or any of their respective Affiliates on
a non-confidential basis from a source other than the Borrower or (i) to
financing sources, valuation providers and consultants.

For purposes of this Section, “Information” means all information received from
the Borrower or any Credit Party relating to the Borrower or any Credit Party or
any of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any Credit Party, provided that, in the
case of information received from the Borrower or any Credit Party after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Credit Party, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including federal and state securities Laws.

Notwithstanding anything to the contrary contained in this Section 10.07, each
Credit Party consents to the publication by the Administrative Agent of any
press releases, tombstones, advertising or other promotional materials
(including, without limitation, via any Electronic Medium) relating to the
financing transactions contemplated by this Agreement using such Credit Party’s
name, product photographs, logo or trademark.

Section 10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time after obtaining the prior written consent of the
Administrative Agent, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of any Credit Party against any
and all of the obligations of any Credit Party now or hereafter existing under
this Agreement or any other Loan Document to such Lender or its Affiliates,
irrespective of whether or not such Lender or such Affiliate shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of such Credit Party may be contingent or unmatured or are owed to a
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Lender or such Affiliate different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or its Affiliates may have.
Each Lender agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. No amounts
set off from any Guarantor shall be applied to any Excluded Hedge Obligations of
such Guarantor.

Section 10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

Section 10.10 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed
counterpart of this Agreement.

Section 10.11 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied.

 

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Section 10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 10.13 Replacement of Lenders. If the Borrower is entitled to replace a
Lender pursuant to the provisions of Section 3.06, or if any Lender is a
Non-Consenting Lender, then (x) the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent and (y) the
Administrative Agent may upon notice to such Lender, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.06), all of its
interests, rights (other than its existing rights to payments pursuant to
Sections 3.01 and 3.04) and obligations under this Agreement and the related
Loan Documents to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
(if any) specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.05 and Section 3.05) from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of an assignment resulting from a Lender becoming a
Non-Consenting Lender, the Administrative Agent shall have consented to such
assignment and the applicable assignee shall have consented to the applicable
amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply. Each Lender hereby authorizes the Administrative Agent to
execute and deliver, on behalf of such Lender, all documentation reasonable or
necessary to effectuate this Section 10.13 if such Lender is required to make an
assignment or delegation pursuant to this Section 10.13 and has not executed
such documentation after a request by the Borrower or the Administrative Agent
to do so.

Section 10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW.

 

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(b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO EACH IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER, THE OTHER CREDIT PARTIES SIGNATORY HERETO OR THEIR RESPECTIVE
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN THE FIRST SENTENCE OF SUBSECTION (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

(e) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS

 

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CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.15 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined), the Administrative Agent (for itself and not on behalf of
any Lender) hereby notifies the Credit Parties that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Credit Parties and their Subsidiaries, which information includes
the name and address of the Credit Parties and their Subsidiaries and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Credit Parties and their Subsidiaries in accordance
with the Act. The Credit Parties shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” or
anti-money laundering rules and regulations, including the Act.

Section 10.16 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. IN THE EVENT
OF ANY EXPRESS CONFLICT OR INCONSISTENCY BETWEEN THE TERMS OF THIS AGREEMENT AND
THE TERMS OF ANY OTHER LOAN DOCUMENT, THE TERMS OF THIS AGREEMENT SHALL GOVERN,
IT BEING UNDERSTOOD THAT PROVISIONS OF OTHER LOAN DOCUMENTS THAT SUPPLEMENT
TERMS OF THIS AGREEMENT SHALL NOT BE DEEMED TO BE INCONSISTENT BECAUSE OF THEIR
NATURE AS SUPPLEMENTARY PROVISIONS.

Section 10.17 Joint and Several. The obligations of the Credit Parties hereunder
and under the other Loan Documents are joint and several.

Section 10.18 Certain ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a
Lender party hereto, to, and (y) covenants, from the date such Person became a
Lender party hereto to the date such Person ceases being a Lender party hereto,
for the benefit of, the Administrative Agent and its Affiliates, and not, for
the avoidance of doubt, to or for the benefit of the Borrower or any other
Credit Party, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of 29 CFR §
2510.3-101, as modified by Section 3(42) of ERISA) or otherwise for purposes of
Title I of ERISA or Section 4975 of the Code of one or more Benefit Plans in
connection with the Loans or the Commitments,

 

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(ii) the prohibited transaction exemption set forth in one or more PTEs, such as
PTE 84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of, the Loans, the Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Commitments
and this Agreement, (C) the entrance into, participation in, administration of
and performance of the Loans, the Commitments and this Agreement satisfies the
requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to
the best knowledge of such Lender, the requirements of subsection (a) of Part I
of PTE 84-14 are satisfied, so as to exempt from the prohibitions of Section 406
of ERISA and Section 4975 of the Code such Lender’s entrance into, participation
in, administration of and performance of the Loans, the Commitments and this
Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

(b) In addition, unless sub-clause (i) in the immediately preceding clause
(a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to
or for the benefit of the Borrower or any other Credit Party, that none of the
Administrative Agent or any of its Affiliates is a fiduciary with respect to the
assets of such Lender involved in the Loans, the letters of credit, the
Commitments and this Agreement (including in connection with the reservation or
exercise of any rights by the Administrative Agent under this Agreement, any
Loan Document or any documents related to hereto or thereto).

Section 10.19 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each Credit Party acknowledges and agrees, and acknowledges its
Affiliates’ understanding, that:

(a) (i) the arranging and other services regarding this Agreement provided by
the Administrative Agent and the Lenders are arm’s-length commercial
transactions between the Credit Parties and their respective Affiliates, on the
one hand, and the Administrative Agent and the Lenders, on the other hand,
(ii) each Credit Party has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (iii) each Credit
Party is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents;

 

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(b) (i) the Administrative Agent and each Lender is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for any Credit Party or any of its Affiliates, or any other Person and
(ii) neither the Administrative Agent nor any Lender has any obligation to any
Credit Party or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and

(c) the Administrative Agent, the Lenders and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of Credit Parties and their Affiliates, and neither the Administrative
Agent nor any Lender has any obligation to disclose any of such interests to the
Credit Parties or any of their Affiliates. To the fullest extent permitted by
law, the Credit Parties hereby waive and release any claims that they may have
against the Administrative Agent or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

Section 10.20 Acknowledgement Regarding Any Supported QFCs. To the extent that
the Loan Documents provide support, through a guarantee or otherwise, for Swap
Contracts or any other agreement or instrument that is a QFC (such support, “QFC
Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge
and agree as follows with respect to the resolution power of the Federal Deposit
Insurance Corporation under the Federal Deposit Insurance Act and Title II of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support (with the provisions below
applicable notwithstanding that the Loan Documents and any Supported QFC may in
fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States):

In the event a Covered Entity that is party to a Supported QFC (each, a “Covered
Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime,
the transfer of such Supported QFC and the benefit of such QFC Credit Support
(and any interest and obligation in or under such Supported QFC and such QFC
Credit Support, and any rights in property securing such Supported QFC or such
QFC Credit Support) from such Covered Party will be effective to the same extent
as the transfer would be effective under the U.S. Special Resolution Regime if
the Supported QFC and such QFC Credit Support (and any such interest, obligation
and rights in

 

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property) were governed by the laws of the United States or a state of the
United States. In the event a Covered Party or a BHC Act Affiliate of a Covered
Party becomes subject to a proceeding under a U.S. Special Resolution Regime,
Default Rights under the Loan Documents that might otherwise apply to such
Supported QFC or any QFC Credit Support that may be exercised against such
Covered Party are permitted to be exercised to no greater extent than such
Default Rights could be exercised under the U.S. Special Resolution Regime if
the Supported QFC and the Loan Documents were governed by the laws of the United
States or a state of the United States. Without limitation of the foregoing, it
is understood and agreed that rights and remedies of the parties with respect to
a defaulting Lender shall in no event affect the rights of any Covered Party
with respect to a Supported QFC or any QFC Credit Support.

[The Remainder of this Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

The Borrower:

PETIQ, LLC,

an Idaho limited liability company

By  

                 

Name:   Title:  

 

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The Administrative Agent: ARES CAPITAL CORPORATION, as Administrative Agent By  

                 

Name:   Title:  

 

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The Lenders: ARES CAPITAL CORPORATION as an Initial Term Loan Lender By  

         

Name:   Title:  

 

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[                    ]

as an Initial Term Loan Lender

 

By  

                 

Name:   Title:  

 

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