Exhibit 10.1

Execution Version

 

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179

    

BARCLAYS

745 Seventh Avenue

New York, New York 10019

 

                             

CONFIDENTIAL

September 18, 2018

Project Vision

Commitment Letter

Thor Industries, Inc.

601 East Beardsley Ave.

Elkhart, IN 46514

Attention: Colleen Zuhl, Senior Vice President and Chief Financial Officer

Ladies and Gentlemen:

You have advised JPMorgan Chase Bank, N.A. (“JPMorgan”) and Barclays Bank PLC
(“Barclays”, and together with JPMorgan, the “Commitment Parties” or “us” or
“we”) that Thor Industries, Inc., a Delaware corporation (“you” or the
“Company”), intends to enter into the transactions described in the Transaction
Summary attached hereto as Exhibit A (the “Transactions”). Capitalized terms
used but not defined herein are used with the meanings assigned to them on the
Exhibits attached hereto (such Exhibits, together with this letter,
collectively, the “Commitment Letter”).

1.    Commitments

In connection with the Transactions, (i) JPMorgan is pleased to advise you of
its several, but not joint, commitment to provide 60% of the aggregate amount of
the Credit Facilities (to be allocated ratably between the Credit Facilities)
and (ii) Barclays is pleased to advise you of its several, but not joint,
commitment to provide 40% of the aggregate amount of the Credit Facilities (to
be allocated ratably between the Credit Facilities), in each case upon the terms
and subject to the conditions set forth in this letter and Exhibits B, C and D
hereto (the Summary of Terms and Conditions set forth on each of Exhibits B and
C hereto are collectively referred to herein as the “Term Sheets”).

2.    Titles and Roles

It is agreed that JPMorgan and Barclays will act as joint lead arrangers and
joint bookrunners for the Credit Facilities (acting in such capacities, the
“Lead Arrangers”) and JPMorgan will act as sole administrative agent for the
Credit Facilities. Notwithstanding the foregoing, the Company agrees that
JPMorgan may perform its responsibilities hereunder through its affiliate, J.P.
Morgan Securities LLC.

You agree that no other agents, co-agents, arrangers, co-arrangers, bookrunners,
co-bookrunners, managers or co-managers will be appointed, no other titles will
be awarded and no compensation (other than that expressly contemplated by the
Term Sheets and Fee Letters referred to below) will be paid in connection with
the Credit Facilities unless you and we shall so reasonably agree (it being
understood and agreed that no other agent, co-agent, arranger, co-arranger,
bookrunner, co-bookrunner, manager or comanager shall be entitled to greater
economics in respect of the Credit Facilities than JPMorgan); provided, however,
that within fifteen (15) business days after the date hereof, you may appoint up
to

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three (3) additional financial institutions reasonably satisfactory to the Lead
Arrangers as additional joint lead arrangers, joint bookrunners, agents,
co-agents or co-managers (any such arranger, bookrunner, agent, co-agent or
co-manager, an “Additional Commitment Party”) for the Credit Facilities and
award such financial institutions with economics determined by you (it being
understood that, to the extent you appoint any Additional Commitment Party in
respect of the Credit Facilities, such financial institution or one or more of
its affiliates shall commit to providing a percentage of the aggregate principal
amount of each Credit Facility at least commensurate with the economics and fees
awarded to such financial institution or its affiliates, as applicable, and the
commitment and economics of each Commitment Party hereunder and under the
Arranger Fee Letter in respect of each Credit Facility will be proportionately
reduced by the amount of the commitments and economics of such appointed entity
or its affiliates, as applicable, with respect to such Credit Facility upon the
execution by such financial institution or such affiliate, as applicable, of
customary joinder documentation); provided further, however, that in no event
will the commitments so allocated to the Additional Commitment Parties in
respect of the Credit Facilities exceed 15% of the aggregate principal amount of
the Credit Facilities. It is further agreed that JPMorgan will have “left”
placement on and will appear on the top left of any Information Materials (as
defined below) and all other offering or marketing materials in respect of the
Credit Facilities, and JPMorgan will perform the roles and responsibilities
conventionally understood to be associated with such “left” placement.

3. Syndication

The Lead Arrangers intend to syndicate the Credit Facilities in each case to a
group of banks, financial institutions and other lenders identified by them in
consultation with you (such banks, financial institutions and other lenders,
together with the Commitment Parties, the “Lenders”); provided that (a) the Lead
Arrangers will not syndicate or offer the opportunity to acquire a commitment or
provide any portion of the Credit Facilities, to any Disqualified Lenders (as
defined below), (b) solely with respect to the ABL Facility, the Lead Arrangers
will not syndicate or offer the opportunity to acquire a commitment or provide
any portion of such facility, to any bank, financial institution or other
institutional lender unless such bank, financial institution or other
institutional lender is reasonably approved by you (such approval not to be
unreasonably withheld, delayed or conditioned) and (c) notwithstanding the Lead
Arrangers’ right to syndicate the Credit Facilities and receive commitments with
respect thereto, unless you otherwise agree in writing (i) the Commitment
Parties shall not be relieved, released or novated from their obligations
hereunder (including their obligation to fund the Credit Facilities on the
Closing Date) in connection with any syndication, assignment or participation of
the Credit Facilities, including their commitments in respect thereof, until
after the Closing Date has occurred, (ii) no assignment or novation by any
Commitment Party shall become effective as between you and such Commitment Party
with respect to all or any portion of such Commitment Party’s commitments in
respect of the Credit Facilities until the initial funding of the Credit
Facilities and (iii) each Commitment Party shall retain exclusive control over
all rights and obligations with respect to its commitment in respect of the
Credit Facilities, including all rights with respect to consents, modifications,
supplements, waivers and amendments, until the Closing Date has occurred. For
purposes of this Commitment Letter, the term “Disqualified Lender” shall mean
(x) any entity separately identified in writing prior to the date hereof on the
“Disqualified Lender” list provided by you to us, (y) any entity that is a
competitor of the Company, the Target or any of their respective Subsidiaries
(each, a “Competitor”), in each case that is identified by name in writing on
the “Disqualified Lender” list or in a supplement to the “Disqualified Lender”
list provided to the Lead Arrangers from time to time after the date hereof and
(z) in the case of the foregoing clauses (x) and (y), any affiliate of such
entity, which affiliate is either (i) clearly identifiable as such based solely
on the similarity of its name to an entity set forth on the “Disqualified
Lender” list and is not a bona fide debt investment fund or (ii) identified as
an affiliate in writing after the date hereof in a written supplement to the
“Disqualified Lender” list and is not a bona fide debt investment fund; provided
that any supplement to the “Disqualified Lender” list shall become effective
three (3) business days after delivery to the Lead Arrangers, but which
supplement shall not apply retroactively to disqualify any entities that have
(i)

 

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previously acquired an assignment or participation interest in the Credit
Facilities in accordance with this Commitment Letter or the Credit
Documentation, (ii) entered into a trade for an assignment or participation
interest in the Credit Facilities in accordance with this Commitment Letter or
the Credit Documentation or (iii) become a competitor of the Company or its
subsidiaries before such entity is added to the “Disqualified Lender” list, but
upon effectiveness of such designation, any such party may not acquire any
additional commitments or participations; provided further that, no supplements
shall be made to the “Disqualified Lender” list from and including the date of
the launch of primary syndication of the Credit Facilities through and including
the Syndication Date.

The Lead Arrangers intend to commence syndication efforts promptly, and, until
the earlier to occur of (x) the date that is sixty (60) days following the
Closing Date and (y) a Successful Syndication (as defined in the Arranger Fee
Letter) (such earlier date, the “Syndication Date”), you agree to assist (and,
to the extent you have rights to do so under the Purchase Agreement, to use your
commercially reasonable efforts to cause the Target and its subsidiaries to
actively assist) the Lead Arrangers in completing a syndication reasonably
satisfactory to the Lead Arrangers and you. Such assistance shall be subject to
compliance with the laws, rules and regulations of federal, state and other
applicable jurisdictions and shall include (A) your using commercially
reasonable efforts to ensure that the syndication efforts benefit from your and
your subsidiaries’ existing banking relationships, (B) direct contact between
appropriate members of your senior management (including the finance director)
and advisors and the proposed Lenders (and, to the extent you have rights to do
so under the Purchase Agreement, using your commercially reasonable efforts to
arrange such contact between senior management (including the finance director)
of the Target and the proposed Lenders), in all such cases at times and
locations to be mutually agreed upon, (C) your preparing and providing to the
Commitment Parties (and, to the extent you have rights to do so under the
Purchase Agreement, using commercially reasonable efforts to cause the Target to
prepare and provide) all information customary for transactions of this type
with respect to you and your subsidiaries and the Target and its subsidiaries
(to the extent that such information is reasonably available to you) and the
Transactions, including all financial information and “Projections” (as defined
below) customary for transactions of this type, as the Commitment Parties may
reasonably request in connection with the arrangement and syndication of the
Credit Facilities and your assistance (and, to the extent you have rights to do
so under the Purchase Agreement, using your commercially reasonable efforts to
cause the Target to assist) in the preparation of a confidential information
memorandum and lender slides (a “Confidential Information Memorandum”) and other
marketing materials customary for transactions of this type to be used in
connection with the syndication (all such information, memoranda and material,
“Information Materials”), (D) prior to the launch of the syndication, using your
commercially reasonable efforts to procure, at your expense, a public corporate
credit rating and a public corporate family rating in respect of the Company
from Standard & Poor’s Financial Services LLC (“S&P”) and Moody’s Investors
Service, Inc. (“Moody’s”), respectively, and ratings for each of the Credit
Facilities from each of S&P and Moody’s (in each case on a pro forma basis for
the Transactions), (E) your hosting, with the Commitment Parties, of one or more
meetings of prospective Lenders at times and locations to be mutually agreed
(and, to the extent you have rights to do so under the Purchase Agreement, using
your commercially reasonable efforts to cause the senior management (including
the finance director) of the Target to be available for such meetings) and
(F) your ensuring that, prior to the Syndication Date, there is no competing
offering, placement, arrangement or syndication of any debt securities or bank
financing or other credit facilities (other than the Credit Facilities or any
“Permitted Debt” (as defined below)) or announcement thereof by or on behalf of
you and your subsidiaries and, subject to your rights to do so under the
Purchase Agreement, your using commercially reasonable efforts to ensure that
there is no competing offering, placement, arrangement or syndication of any
debt securities or bank financing or other credit facilities or announcement
thereof by or on behalf of the Target and its subsidiaries (other than the
Credit Facilities or any Permitted Debt), in all cases under this clause (F), if
such offering, placement, arrangement or syndication could reasonably be
expected to materially impair our syndication of the Credit Facilities. For
purposes of this Commitment Letter and the Credit Documentation, the term
“Permitted Debt” shall mean (i) ordinary

 

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course purchase money, capital lease, equipment and similar financings,
(ii) with respect to the Target and its subsidiaries, any indebtedness permitted
by the Purchase Agreement to remain outstanding following the Closing Date,
(iii) intercompany debt among the Company and its subsidiaries or among the
Target and its subsidiaries and (iv) any other financing agreed by the Lead
Arrangers.

Upon the reasonable request of the Commitment Parties, you will furnish for no
fee, to the Commitment Parties an electronic version of your and your
subsidiaries’ trademarks, service marks and corporate logos for use in marketing
materials for the purpose of facilitating the syndication of the Credit
Facilities (the “License”); provided, however, that the License shall be used
solely for the purpose described above and may not be assigned or transferred.
You hereby authorize the Commitment Parties to download copies of the Company’s
trademark logos from its website and post copies thereof on the IntraLinks site,
SyndTrak site or similar workspace established by JPMorgan to syndicate the
Credit Facilities and use the logos on any Confidential Information Memorandum,
presentations and other marketing materials prepared in connection with the
syndication of the Credit Facilities or in any advertisements (to which you
consent, such consent not to be unreasonably withheld, delayed or conditioned)
that the Commitment Parties may place after the closing of any of the Credit
Facilities in financial and other newspapers and journals, or otherwise, at its
own expense describing its services to the Company hereunder. Without limiting
your obligations to assist with syndication efforts as set forth in this
paragraph, we agree that (except for purposes of determining whether a
Successful Syndication has been achieved under the market flex provisions of the
Arranger Fee Letter) we will not be released from our commitment hereunder in
connection with any syndication or assignment to any Lender unless (A) (i) you
have consented to such syndication or assignment in writing (such consent not to
be unreasonably withheld, delayed or conditioned) and (ii) any such Lender has
entered into customary amendment, restatement or joinder documentation (in form
and substance reasonably satisfactory to JPMorgan and you) with respect to this
Commitment Letter committing to provide a portion of the Credit Facilities (in
which case our commitments hereunder shall be reduced at such time by an amount
equal to the commitment assumed by such Lender) or (B) such Lender shall have
entered into the applicable Credit Documentation and funded the portion of the
Credit Facilities required to be funded by it on the Closing Date.
Notwithstanding anything to the contrary contained in this Commitment Letter or
the Fee Letters or any other letter agreement or undertaking concerning the
financing of the Transactions to the contrary, your obligations to assist in
syndication efforts as provided herein shall not constitute a condition to the
commitments hereunder or the funding of the Credit Facilities on the Closing
Date and it is understood that each Commitment Party’s commitment hereunder is
not conditioned upon the syndication of, or receipt of commitments in respect
of, the Credit Facilities and in no event shall the commencement or successful
completion of syndication of the Credit Facilities or receipt of any ratings
constitute a condition to the availability of the Credit Facilities on the
Closing Date.

The Lead Arrangers will manage, in consultation with you, all aspects of the
syndication, including decisions as to the selection of institutions to be
approached, and when they will be approached, when commitments will be accepted,
which institutions will participate, the allocation of the commitments among the
Lenders and the amount and distribution of fees among the Lenders, in all cases,
subject to the provisions hereof with respect to Disqualified Lenders. You
hereby acknowledge and agree that the Lead Arrangers will have no responsibility
other than to arrange the syndication as set forth herein and in no event shall
any Commitment Party be subject to any fiduciary or other implied duties in
connection with the transactions contemplated hereby.

At the request of the Commitment Parties, you agree to assist in the preparation
of a version of each Confidential Information Memorandum or other Information
Material (a “Public Version”) consisting exclusively of information with respect
to you, your subsidiaries, the Target and its subsidiaries and the Acquisition
that is either publicly available or not material with respect to you and your
subsidiaries, the Target and its subsidiaries, any of your or their respective
securities or the Acquisition for purposes of United States federal and state
securities laws or, with respect to the Target and its subsidiaries, is of a
type

 

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that would be publicly available if the Target was a U.S. public reporting
company (such information, “Non-MNPI”). Such Public Versions, together with any
other information prepared by you or the Target or your or its subsidiaries or
representatives and conspicuously marked “Public” (collectively, the “Public
Information”), which at a minimum means that the word “Public” will appear
prominently on the first page of any such information, may be distributed by us
to prospective Lenders who have advised us that they wish to receive only
Non-MNPI (“Public Side Lenders”). You acknowledge and agree that, in addition to
Public Information and unless you promptly notify us otherwise, (a) drafts and
final definitive documentation with respect to the Credit Facilities,
(b) marketing term sheets and administrative materials prepared by the
Commitment Parties for prospective Lenders (such as a lender meeting invitation,
allocations and funding and closing memoranda), and (c) notifications of changes
in the terms of the Credit Facilities may be distributed to Public Side Lenders.
You acknowledge that each Commitment Party’s public-side employees and
representatives who are publishing debt analysts may participate in any meetings
held pursuant to clause (E) of the third preceding paragraph; provided that,
such analysts shall not publish any information obtained from such meetings
(i) until the syndication of the Credit Facilities has been completed upon the
making of allocations by the Lead Arrangers and the Lead Arrangers freeing the
Credit Facilities to trade or (ii) in violation of any confidentiality agreement
between you and any Commitment Party.

In connection with our distribution to prospective Lenders of any Confidential
Information Memorandum and, upon our request, any other Information Materials,
you will execute and deliver to us a customary authorization letter authorizing
such distribution and, in the case of any Public Version thereof or other Public
Information, representing that it only contains Non-MNPI. Each Confidential
Information Memorandum will be accompanied by a disclaimer exculpating us and
our affiliates with respect to any use, and you and your affiliates with respect
to any misuse, thereof and of any related Information Materials by the
recipients thereof.

For the avoidance of doubt, you will not be required to provide any information
to the extent that the provision thereof would violate any law, rule or
regulation, or any obligation of confidentiality binding upon, or waive any
privilege that may be asserted by you or any of your affiliates; provided that
(i) you shall use commercially reasonable efforts to obtain the relevant
consents under such obligations of confidentiality to allow for the provision of
such information, (ii) you shall provide each Commitment Party notice that you
determined to withhold such information in reliance on this sentence and
(iii) the foregoing shall not limit the representations set forth below in
Section 4.

4. Information

You hereby represent and warrant that (with respect to any information relating
to the Target and its subsidiaries, to your knowledge) (a) all written
information (including all Information Materials), other than the Projections,
other forward-looking information, budgets, forecasts, estimates and information
of a general economic or industry specific nature (the “Information”), that has
been or will be made available to us by you or, at your direction, by any of
your representatives in connection with the transactions contemplated hereby,
when taken as a whole with other information made available (taken in
combination with the information contained in your most recent Form 10-K filing
for the fiscal year ended July 31, 2017 and any interim filings after such date
on Form 10-Q or Form 8-K with the Securities and Exchange Commission (“SEC”),
after giving effect to all supplements and updates thereto provided through the
date furnished, does not or will not, when furnished to us, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made (when taken as a whole
with other information made available (taken in combination with the information
contained in your most recent Form 10-K filing for the fiscal year ended
July 31, 2017 and any interim filings after such date on Form 10-Q or Form 8-K
with the SEC), and after giving effect to all supplements and updates thereto
provided through the date furnished) and (b) the financial projections

 

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and other forward-looking information (the “Projections”) that have been or will
be made available to us by you or, at your direction, by any of your
representatives in connection with the transactions contemplated hereby have
been or will be prepared in good faith based upon assumptions believed by you to
be reasonable at the time furnished to us (it being understood that (i) the
Projections are as to future events and are not to be viewed as facts, and that
actual results during the period or periods covered by any such Projections may
differ significantly from the projected results and such differences may be
material and (ii) the Projections are subject to significant uncertainties and
contingencies and no assurance can be given that the projected results will be
realized). You agree that if, at any time prior to the later of (x) Closing Date
and (y) the Syndication Date, you become aware that any of the representations
in the preceding sentence would be incorrect in any material respect if the
Information and Projections were being furnished, and such representations were
being made, at such time (to your knowledge, prior to the Closing Date, with
respect to the Information and Projections relating to the Target and its
subsidiaries), then you will (or, with respect to the Information and
Projections relating to the Target and its subsidiaries, to the extent you have
rights to do so under the Purchase Agreement, will use commercially reasonable
efforts to) promptly supplement, or cause to be supplemented, the Information
and the Projections so that (with respect to Information and Projections
relating to the Target and its subsidiaries, to your knowledge) such
representations will be correct in all material respects under those
circumstances. You understand that in arranging and syndicating the Credit
Facilities we may use and rely on the Information and Projections without
independent verification thereof.

5.    Fees

As consideration for the commitments and agreements of each Commitment Party
hereunder, you agree to pay or cause to be paid the nonrefundable fees described
in the Arranger Fee Letter (the “Arranger Fee Letter”) and the Administrative
Agent Fee Letter (the “Administrative Agent Fee Letter”), in each case dated the
date hereof and delivered herewith (the “Fee Letters” and each a “Fee Letter”)
on the terms and subject to the conditions set forth therein.

6.    Conditions

Each Commitment Party’s commitments and agreements hereunder are subject solely
to the satisfaction (or waiver by each Commitment Party) of the conditions set
forth in this Section 6, in Exhibit D, in Exhibit B under the heading “Certain
Conditions – Initial Conditions” and in Exhibit C under the heading “Certain
Conditions –Conditions Precedent”.

Notwithstanding anything in this Commitment Letter, the Fee Letters or the
definitive documentation for the Credit Facilities (the “Credit Documentation”)
to the contrary, (a) the only representations relating to you and your
subsidiaries and the Target and its subsidiaries and their respective businesses
the accuracy of which shall be a condition to availability of the Credit
Facilities on the Closing Date shall be the Specified Representations (as
defined below) and (b) the terms of the Credit Documentation shall be in a form
such that they do not impair the availability of the Credit Facilities on the
Closing Date if the conditions set forth in this Section 6, in Exhibit D, in
Exhibit B under the heading “Certain Conditions – Initial Conditions” and in
Exhibit C under the heading “Certain Conditions – Conditions Precedent”, in each
case, limited on the Closing Date as indicated therein, are satisfied (or waived
by each Commitment Party) (it being understood that, to the extent any
collateral (including the grant or perfection of any security interest) referred
to in the Term Sheets is not or cannot be provided on the Closing Date (other
than the grant and perfection of security interests (i) in assets (to the extent
required by the Term Sheets) with respect to which a lien may be perfected
solely by the filing of a financing statement under the Uniform Commercial Code
(“UCC”) or other applicable local law, or (ii) in the equity interests, if any,
of your material subsidiaries, and, to the extent you have rights to do so under
the Purchase Agreement, the Target and its material subsidiaries (in each case,
to the extent required by the Term Sheets) with respect to which a lien may be
perfected by the delivery of an equity certificate or otherwise by

 

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agreement executed under local law) after your use of commercially reasonable
efforts to do so or without undue burden or expense, then the provision and
perfection of such collateral shall not constitute a condition precedent to the
availability and initial funding of the Credit Facilities on the Closing Date,
but may instead be provided after the Closing Date pursuant to arrangements to
be mutually agreed by the Administrative Agents and the Company). For purposes
hereof, “Specified Representations” means the representations and warranties
referred to in the Term Sheets relating to corporate or other organizational
existence, organizational power and authority of the Company and the Guarantors
to enter into and perform the Credit Documentation, due authorization, execution
and delivery by the Company and the Guarantors of, performance of, and
enforceability against the Company and the Guarantors of, the Credit
Documentation, effectiveness, validity and perfection of first priority (subject
to permitted liens) liens under the security documents (subject to the
limitations set forth in the preceding sentence), no conflicts of the Credit
Documentation with the organizational documents of the Company and the
Guarantors, the PATRIOT Act, the Investment Company Act, solvency as of the
Closing Date (after giving effect to the Transactions) of the Company and its
subsidiaries on a consolidated basis (solvency to be defined in a manner
consistent with the manner in which solvency is determined in the solvency
certificate to be delivered pursuant to paragraph 1(b) of Exhibit D), Federal
Reserve margin regulations and anticorruption laws and sanctions.
Notwithstanding anything in this Commitment Letter or the Fee Letters to the
contrary, the only conditions to availability and initial funding of the Credit
Facilities on the Closing Date are set forth in this Section 6, in Exhibit D, in
Exhibit B under the heading “Certain Conditions – Initial Conditions” and in
Exhibit C under the heading “Certain Conditions – Conditions Precedent”, in each
case, limited on the Closing Date as indicated therein. This paragraph, and the
provisions herein, shall be referred to as the “Limited Conditionality
Provision”.

7. Indemnification and Expenses

You agree (a) to indemnify and hold harmless each Commitment Party, its
affiliates and its and their respective directors, officers, employees,
advisors, affiliates, agents and other representatives (each, an “indemnified
person”) from and against any and all losses, claims, damages and liabilities to
which any such indemnified person may become subject, to the extent arising out
of or in connection with this Commitment Letter, the Fee Letters, the Credit
Facilities, the use of the proceeds thereof or the Acquisition and the
Transactions or any claim, litigation, investigation or proceeding relating to
any of the foregoing (each a “Proceeding”), regardless of whether any
indemnified person is a party thereto, whether or not such Proceedings are
brought by you, your equity holders, affiliates, creditors or any other person,
and to reimburse each indemnified person upon demand for any reasonable and
documented out-of-pocket legal expenses of one firm of counsel for all such
indemnified persons, taken as a whole and, if relevant, of a single local
counsel in each applicable jurisdiction (which may include a single special
counsel acting in multiple jurisdictions) for all such indemnified persons,
taken as a whole, and, solely in the case of a conflict of interest, where the
indemnified person affected by such conflict notifies you of the existence of
such conflict and thereafter retains its own counsel, another firm of counsel
for such affected indemnified person) and other reasonable and documented
out-of-pocket fees and expenses incurred in connection with investigating or
defending any of the foregoing, provided that the foregoing indemnity will not,
as to any indemnified person, apply to losses, claims, damages, liabilities or
related expenses to the extent that they have arisen from the willful misconduct
or gross negligence of such indemnified person or any of such indemnified
person’s affiliates or any of its or their respective Controlled Related Parties
(as defined below) or their successors (as determined by a final, non-appealable
judgment of a court of competent jurisdiction), (ii) a material breach by such
indemnified person or any of such indemnified person’s affiliates or any of its
or their respective Controlled Related Parties of any of its or their respective
obligations under this Commitment Letter (as determined by a final,
non-appealable judgment of a court of competent jurisdiction pursuant to a claim
initiated by you), including each Commitment Party’s obligations to fund the
Credit Facilities on the Closing Date if so required in accordance with the
provisions of this Commitment Letter or (iii) disputes solely between and among
indemnified persons not arising from any act or omission of the Company or any
of its affiliates (other than claims against an

 

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indemnified person acting in its capacity as an agent or arranger or similar
role under the Credit Facilities), and (b) regardless of whether the Closing
Date occurs, to reimburse each Commitment Party and its affiliates from time to
time, upon presentation of a summary statement, for all reasonable and
documented out-of-pocket expenses (including but not limited to due diligence
expenses, expenses of each Commitment Party’s consultants’ fees (to the extent
any such consultant has been retained with your prior written consent (such
consent not to be unreasonably withheld or delayed)), syndication expenses,
travel expenses and reasonable fees, disbursements and other charges of a single
counsel to the Commitment Parties and of a single local counsel to the
Commitment Parties in each relevant jurisdiction (which may include a single
special counsel acting in multiple jurisdictions) and of such other counsel
retained with your prior written consent (such consent not to be unreasonably
withheld or delayed)), in each case incurred in connection with the Credit
Facilities and any related documentation (including this Commitment Letter and
the Credit Documentation) or the administration, amendment, modification, waiver
or enforcement thereof. It is further agreed that the Commitment Parties shall
only have liability to you (as opposed to any other person).

No indemnified person shall be liable for any damages directly or indirectly
arising from the use by others of Information or other materials obtained
through electronic, telecommunications or other information transmission
systems, including, without limitation, SyndTrak, Intralinks, the internet,
email or similar electronic transmission systems, except to the extent any such
damages are found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from the gross negligence or willful misconduct of such
indemnified person (or any of its Controlled Related Parties). None of the
indemnified persons or you, the Target or any of your or their respective
affiliates or the respective directors, officers, employees, advisors, agents or
other representative of the foregoing or any successor or assign of the
foregoing shall be liable for any indirect, special, punitive or consequential
damages in connection with this Commitment Letter, the Fee Letters, the Credit
Facilities or the transactions contemplated hereby, provided that nothing
contained in this sentence shall limit your indemnity obligations to the extent
set forth in this Section 7. The foregoing provisions in this Section 7 shall be
superseded in each case, to the extent covered thereby, by the applicable
provisions contained in the Credit Documentation upon execution thereof and
thereafter shall have no further force and effect. As used above, a “Controlled
Related Party” of any person or entity means (1) any controlling person or
controlled affiliate of such indemnified person, (2) the respective directors,
officers or employees of such indemnified person or any of its controlling
persons or controlled affiliates and (3) the respective agents, advisors and
representatives of such indemnified person or any of its controlling persons or
controlled affiliates, in the case of this clause (3), acting on behalf of or at
the instructions of such indemnified person, controlling person or such
controlled affiliate; provided that each reference to a controlling person,
controlled affiliate, director, officer or employee in this sentence pertains to
a controlling person, controlled affiliate, director, officer or employee
involved in the structuring, arrangement, negotiation or syndication of this
Commitment Letter and the Credit Facilities.

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

You acknowledge that the Commitment Parties and their respective affiliates may
be providing debt financing, equity capital or other services (including
financial advisory services) to other companies in respect of which you may have
conflicting interests regarding the transactions described herein and otherwise.
You further acknowledge that each Commitment Party (or an affiliate) is a full
service securities or banking firm engaged in securities trading and brokerage
activities as well as providing investment banking and other financial services
and such person may from time to time provide investment banking and other
financial services to, and effect transactions for, its own or its affiliates’
account or the account of customers, and hold positions in loans, securities or
options on loans or securities of you, the Target, your or the Target’s
respective affiliates, of other companies that may be the subject of the
transactions contemplated by this Commitment Letter and of other companies with
which you may have commercial or other relationships. You further acknowledge
that no Commitment Party has any obligation to you or your

 

8

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affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein or in any other express writing executed
and delivered by such Commitment Party and you or any such affiliate (including
the Credit Documentation). With respect to any securities and/or financial
instruments so held by any Commitment Party (or an affiliate) or any of its
customers, all rights in respect of such securities and financial instruments,
including any voting rights, will be exercised by the holder of the rights, in
its sole discretion. In addition, neither any Commitment Party nor any of its
affiliates will use confidential information obtained from you or your
affiliates or on your or their behalf by virtue of the transactions contemplated
hereby in connection with the performance by such Commitment Party and its
affiliates of services for other companies or persons and neither any Commitment
Party nor any of its affiliates will furnish any such information to any of its
other customers. You also acknowledge that each Commitment Party and its
respective affiliates have no obligation to use in connection with the
transactions contemplated hereby, or to furnish to you, confidential information
obtained from other companies or persons.

Each Commitment Party may employ the services of its affiliates in providing
certain services hereunder and, in connection with the provision of such
services, may exchange with such affiliates information concerning you and the
other companies that may be the subject of the transactions contemplated by this
Commitment Letter, and, to the extent so employed, such affiliates shall be
entitled to the benefits, and subject to the confidentiality obligations, of
such Commitment Party hereunder.

Each Commitment Party is acting solely in the capacity of an arm’s length
contractual counterparty to the Company with respect to the Credit Facilities
(including in connection with determining the terms of the Credit Facilities)
and not as a financial advisor or a fiduciary to, or an agent of, the Company or
any other person. The Company agrees that it will not assert any claim against
any Commitment Party based on an alleged breach of fiduciary duty by such
Commitment Party in connection with this Commitment Letter and the transactions
contemplated hereby. The Company acknowledges and agrees that no Commitment
Party is advising the Company as to any legal, tax, investment, accounting,
regulatory or any other matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions
contemplated hereby, and no Commitment Party shall have any responsibility or
liability to the Company with respect thereto. Any review by the Commitment
Parties of the Company, the Target, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the
benefit of the Commitment Parties and their respective affiliates, and shall not
be on behalf of the Company. It is understood that this paragraph shall not
apply to or modify or otherwise affect any arrangement with any financial
advisor separately retained by you or any of your affiliates in connection with
the Acquisition, in its capacity as such.

9. Confidentiality

This Commitment Letter is delivered to you on the understanding that neither
this Commitment Letter nor the Fee Letters nor any of their terms or substance
shall be disclosed by you, directly or indirectly, to any other person except
(a) you and your officers, directors, employees, affiliates, members, partners,
stockholders, attorneys, accountants, agents and advisors and those of the
Target and its subsidiaries and the Target itself, in each case, on a
need-to-know basis, who are advised of the confidential nature of the
information (provided that any disclosure of the Fee Letters or their terms or
substance to the Target or its officers, directors, employees, attorneys,
accountants, agents or advisors shall be redacted as to the amount of fees and
other economic terms of the market flex provisions in a customary manner, unless
the Commitment Parties shall otherwise agree), (b) in any legal, judicial or
administrative proceeding or as otherwise required by applicable law or
regulation or as requested by a governmental authority (in which case you agree,
to the extent practicable and not prohibited by applicable law, to inform us
promptly in advance thereof), (c) upon notice to the Commitment Parties, this
Commitment Letter and the existence and contents hereof (but not the Fee Letters
or the contents thereof,

 

9

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other than the aggregate fee amount contained in the Fee Letters as part of the
Projections, pro forma information or a generic disclosure of aggregate sources
and uses related to fee amounts related to the Transactions to the extent
customary or required in offering and marketing materials for the Credit
Facilities or in any public or regulatory filing requirement (including any
filing requirement of the SEC) relating to the Transactions) may be disclosed in
any syndication or other marketing material in connection with the Credit
Facilities or in connection with any public filing requirement, (d) the Term
Sheets may be disclosed to Lenders and potential Lenders and to any rating
agency in connection with the Acquisition and the Credit Facilities, (e) you may
disclose this Commitment Letter and its contents (but not the Fee Letters or the
contents thereof) to the extent that such information becomes publicly available
other than by reason of disclosure by you in violation of any confidentiality
obligations hereunder, (f) to enforce your rights hereunder or under the Fee
Letters and (g) with the Commitment Parties’ prior written consent (which shall
not be unreasonably withheld, conditioned or delayed).

Each Commitment Party shall use all nonpublic information received by it in
connection with the Acquisition and the related transactions solely for the
purposes of providing the services that are the subject of this Commitment
Letter and shall treat confidentially all such information; provided, however,
that nothing herein shall prevent any Commitment Party from disclosing any such
information (a) to rating agencies, (b) to any Lenders or participants or
prospective Lenders or participants (and such actual or prospective Lenders or
participants shall also be permitted to receive the “Disqualified Lender” list
and supplements thereto), (c) in any legal, judicial or administrative
proceeding or other compulsory process or as required by applicable law or
regulations (in which case such Commitment Party shall promptly notify you, in
advance, to the extent permitted by law), (d) upon the request or demand of any
governmental or regulatory authority having jurisdiction over such Commitment
Party or its affiliates (in which case such Commitment Party agrees, to the
extent practicable and not prohibited by applicable law, to inform you promptly
thereof prior to disclosure (except with respect to any audit or examination
conducted by bank accountants or any governmental bank regulatory authority
exercising examination or regulatory authority or regulation)), (e) to its
affiliates and its and their employees, officers, directors, legal counsel,
independent auditors, professionals and other experts or agents of such
Commitment Party (collectively, “Representatives”), on a need-to-know basis, who
are advised of the confidential nature of the information, (f) to the extent any
such information becomes publicly available other than by reason of disclosure
by such Commitment Party, its affiliates or Representatives in breach of this
Commitment Letter or breach by any other party of any confidentiality obligation
known by the Commitment Party to exist in favor of you, the Target or your or
its affiliates, (g) to the extent applicable, for purposes of establishing a
“due diligence” defense, (h) to the extent that such information is received by
such Commitment Party, its affiliates or Representatives from a third party that
is not known by such person to be subject to confidentiality obligations to you
or your affiliates, (i) to enforce its respective rights hereunder or under the
Fee Letters or (j) to the extent such information was independently developed by
such Commitment Party without reliance on confidential information; provided
that the disclosure of any such information to any Lenders or prospective
Lenders or participants or prospective participants referred to above shall be
made subject to the acknowledgment and acceptance by such Lender or prospective
Lender or participant or prospective participant that such information is being
disseminated on a confidential basis on terms that are substantially identical
to the terms set forth herein and in accordance with the standard syndication
processes of each Commitment Party or customary market standards for
dissemination of such type of information. Each Commitment Party’s obligations
under this paragraph shall remain in effect until the earlier of (x) the date
that is two (2) years from the date hereof and (y) the date the Credit
Documentation becomes effective, at which time our obligations under this
paragraph shall automatically terminate and be superseded by the confidentiality
provisions in the Credit Documentation upon the execution and delivery thereof.

 

10

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10. Miscellaneous

This Commitment Letter shall not be assignable by any party hereto without the
prior written consent of each other party hereto (which consent shall not be
unreasonably withheld, conditioned or delayed) (and any purported assignment
without such consent shall be null and void), is intended to be solely for the
benefit of the parties hereto and the indemnified persons and is not intended to
and does not confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto and the indemnified persons to the extent
expressly set forth herein. Each Commitment Party reserves the right to employ
the services of its affiliates in providing services contemplated hereby and to
allocate, in whole or in part, to its affiliates certain fees payable to such
Commitment Party in such manner as such Commitment Party and its affiliates may
agree in their sole discretion, but subject in all respects to the terms of this
Commitment Letter. This Commitment Letter may not be amended or waived except by
an instrument in writing signed by you and each Commitment Party. This
Commitment Letter may be executed in any number of counterparts, each of which
shall be an original, and all of which, when taken together, shall constitute
one agreement. Delivery of an executed signature page of this Commitment Letter
by facsimile or electronic transmission (e.g., “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart hereof. This Commitment
Letter and the Fee Letters are the only agreements that have been entered into
among us and you with respect to the Credit Facilities and set forth the entire
understanding of the parties with respect thereto. This Commitment Letter and
any claim, controversy or dispute (whether arising in contract, equity, tort or
otherwise) arising under or related to this Commitment Letter shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York; provided that the laws of Germany shall govern in determining whether
the Acquisition has been consummated in accordance with the terms of the
Purchase Agreement (in each case without regard to its rules of conflicts of
law).

You and we hereby irrevocably and unconditionally submit to the exclusive
jurisdiction of any Federal court sitting in the Borough of Manhattan in the
City of New York (or in the event such courts lack subject matter jurisdiction,
any New York State court sitting in the Borough of Manhattan in the City of New
York), and in each case, any appellate court thereof, over any suit, action or
proceeding arising out of or relating to the Transactions or the other
transactions contemplated hereby, this Commitment Letter or the Fee Letters or
the performance of services hereunder or thereunder. You and we agree that
service of any process, summons, notice or document by registered mail addressed
to you or us shall be effective service of process for any suit, action or
proceeding brought in any such court. You and we hereby irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding has been brought in any inconvenient forum or otherwise
based on lack of personal jurisdiction or improper venue. YOU AND WE HEREBY
IRREVOCABLY AGREE TO WAIVE TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT
OF THE TRANSACTIONS, THIS COMMITMENT LETTER OR THE FEE LETTERS OR THE
PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

Each Commitment Party hereby notifies you that, pursuant to the requirements of
the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law on October 26,
2001) (the “PATRIOT Act”), it and each of the Lenders is required to obtain,
verify and record information that identifies the Company, the Target and their
subsidiaries, which information includes names, addresses, tax identification
numbers and other information that will allow each Commitment Party and each of
the Lenders to identify the Company, the Target and their subsidiaries in
accordance with the PATRIOT Act. This notice is given in accordance with the
requirements of the PATRIOT Act and is effective for each Commitment Party and
each Lender.

The indemnification, fee, expense, jurisdiction, waiver of jury trial, service
of process, venue, governing law, sharing of information, no agency or fiduciary
duty, syndication and confidentiality provisions contained herein and in the Fee
Letters shall remain in full force and effect regardless of

 

11

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whether the Credit Documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or the commitments
hereunder; provided that your obligations under this Commitment Letter (other
than your obligations with respect to (a) assistance to be provided in
connection with the syndication thereof (including as to the provision of
Information and representations with respect thereto) and (b) confidentiality of
the Fee Letters and the contents thereof) shall automatically terminate and be
superseded, to the extent comparable, by the provisions of the Credit
Documentation upon the initial funding thereunder, and you shall automatically
be released from all liability in connection therewith at such time, in each
case to the extent the Credit Documentation has comparable provisions with
comparable coverage. You may terminate this Commitment Letter and each
Commitment Party’s commitments hereunder in full (but not in part) at any time
subject to the provisions of the preceding sentence.

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms of this Commitment Letter and the Fee Letters by
returning to us executed counterparts of this Commitment Letter and the Fee
Letters not later than 11:59 p.m., New York City time, on September 18, 2018.
Each Commitment Party’s commitments and agreements hereunder, will automatically
expire at such time if we have not received such executed counterparts in
accordance with the preceding sentence. In the event that we receive your
executed counterparts to this Commitment Letter and the Fee Letters in
accordance with this paragraph and the initial funding under the Credit
Facilities does not occur on or before the Expiration Date (as defined below),
then this Commitment Letter and the commitments hereunder shall automatically
terminate unless we shall, in our discretion, agree in writing to an extension;
provided that any termination of the Commitment Letter and the commitments
hereunder shall not prejudice your or our rights and remedies with respect to
any breach of this Commitment Letter that occurred prior to such termination.
“Expiration Date” means the earliest of (i) 5:00 p.m., New York City time, on
the date that is six (6) months after the date of the Purchase Agreement,
(ii) the closing of the Acquisition with or without the use of the Credit
Facilities, (iii) the termination of the Purchase Agreement prior to closing of
the Acquisition or the termination of your (or any of your affiliates’)
obligations under the Purchase Agreement to consummate the Acquisition, in each
case, in accordance with the terms thereof.

[Signature Page Follows]

 

12

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We are pleased to have been given the opportunity to assist you in connection
with this important financing.

 

Very truly yours,

JPMORGAN CHASE BANK, N.A.

By:

 

    /s/ James R. Dolphin                                  

   Name:  James R. Dolphin

   Title:    Managing Director

BARCLAYS BANK PLC

By:

 

    /s/ Brad Aston                                             

   Name:  Bradford Aston

   Title:    Managing Director

 

[Signature Page to Commitment Letter]

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

 

THOR INDUSTRIES, INC.

By:

 

  /s/ W. Todd Woelfer

  Name:   W. Todd Woelfer

  Title:     Sr. V.P., General Counsel &

        Corporate Secretary

 

[Signature Page to Commitment Letter]

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Exhibit A

PROJECT VISION

TRANSACTION SUMMARY

Capitalized terms used but not defined in this Exhibit A shall have the meanings
set forth in the Commitment Letter to which this Exhibit A is attached and in
Exhibits B, C and D thereto.

Thor Industries, Inc. (the “Company”) intends to acquire (the “Acquisition”) all
of the outstanding equity interests of a company previously identified to us as
“Vision” (the “Target”) pursuant to a Sale and Purchase Agreement dated as of
September 18, 2018 (together with all exhibits, schedules, disclosure letters
and attachments thereto, the “Purchase Agreement”), among a wholly owned
subsidiary of the Company, as Purchaser, the Company, as Guarantor, and the
Sellers (as defined therein) party thereto. In connection therewith, it is
intended that:

(a)        The Company will obtain (i) a senior secured term loan facility in an
aggregate principal amount of $1,780 million denominated in U.S. dollars (plus
(A) in the event any “flex” original issue discount or upfront fees are applied
pursuant to the Arranger Fee Letter, an amount sufficient to fund such flex, and
(B) such additional amount as may be required pursuant to the final sentence of
this clause (a)) (the “USD Term Loan Facility”) and (ii) a senior secured term
loan facility in a mutually agreeable aggregate principal amount of the Euro
equivalent of up to $500 million denominated in Euro (the “Euro Term Loan
Facility”, and together with the USD Term Loan Facility, the “Term Loan
Facility” and, together with the ABL Facility, the “Credit Facilities”). In the
event that the Euro Term Loan Facility is less than the Euro equivalent of
$500 million, the USD Term Loan Facility shall be increased by an amount equal
to $500 million less the size of the Euro Term Loan Facility.

(b)        The Company will obtain a senior secured asset-based revolving credit
facility (the “ABL Facility”) in an aggregate principal amount of $750 million,
as described in Exhibit C.

(c)        The Company will directly or indirectly issue shares of common stock
of the Company to the Sellers with a value equal to at least 10% of the
aggregate purchase price under the Purchase Agreement (the “Equity
Contribution”).

(d)        All existing indebtedness for borrowed money under (i) the Credit
Agreement, dated as of June 30, 2016 (as previously amended, the “Existing
Credit Agreement”), among the Company, as borrower, the other subsidiaries of
the Company from time to time party thereto as borrowers and guarantors, each
lender from time to time a party thereto, and BMO Harris Bank N.A., as
administrative agent, (ii) the syndicated loan agreement dated December 18, 2017
entered into between, among others, Erwin Hymer Group AG & Co. KG (“EHG”) and
Rental Alliance GmbH (“REN”) as borrowers, EHG, REN and other Companies as
guarantors, Deutsche Bank Luxembourg S.A. as facility agent and several
financial institutions as lenders providing for a revolving credit facility in
the amount of EUR 300,000,000 and (iii) certain indebtedness of the Target and
its subsidiaries mutually agreed by the Company and the Commitment Parties after
the date hereof (other than Permitted Debt), in each case, will be refinanced or
repaid in full and arrangements for the concurrent release of all related
guarantees and liens shall be made (the “Refinancing”).

(e)        The proceeds of the Credit Facilities and certain other consideration
payable by the Borrower shall be applied (i) to pay the purchase price in
connection with the Acquisition, (ii) to pay the fees, costs and expenses
incurred in connection with the Transactions and (iii) to consummate the
Refinancing (the amounts set forth in clauses (i) through (iii) above,
collectively, the “Transaction Costs”), with any remaining proceeds being used
for working capital needs and for general corporate purposes of the Company.

 

A-1

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The transactions described above are collectively referred to herein as the
“Transactions”. For purposes of this Commitment Letter and the Fee Letters,
“Closing Date” shall mean the date of the satisfaction (or waiver by each
Commitment Party) of the conditions set forth in Exhibit D and the initial
funding of the relevant Credit Facilities.

 

A-2

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Exhibit B

PROJECT VISION

TERM LOAN FACILITY

Summary of Terms and Conditions

Set forth below is a summary of the principal terms and conditions for the Term
Loan Facility. Capitalized terms used but not defined shall have the meanings
set forth in the Commitment Letter to which this Exhibit B is attached and in
Exhibits A, C and D attached thereto.

I.             Parties

 

 

Borrower:

    

Thor Industries, Inc. (the “Borrower”).

 

Joint Lead Arrangers

and Joint Bookrunners:

    

JPMorgan Chase Bank, N.A. (“JPMorgan”) and Barclays Bank PLC (“Barclays”, and
together with JPMorgan, in such capacity, the “Lead Arrangers”).

 

Term Loan Administrative

Agent:

    

JPMorgan (in such capacity, the “Term Loan Administrative Agent” and, together
with the ABL Administrative Agent, the “Administrative Agents”).

 

Lenders:

    

A syndicate of banks, financial institutions and other entities, including
JPMorgan, arranged by the Lead Arrangers (collectively, the “Lenders”).

II.             Term Loan Facility

 

 

Type and Amount of

Facility:

    

A seven-year term loan B facility (the “USD Term Loan Facility”) in the amount
of $1,780 million denominated in U.S. dollars (with flexibility to increase size
of Term Loan Facility to (i) cover OID/upfront fees from market flex provisions
of Arranger Fee Letter and (ii) such additional amount as may be required
pursuant to the final sentence of this “Type and Amount of Facility” section)
(the loans thereunder, the “Initial USD Term Loans”).

 

A seven-year term loan B facility (the “Euro Term Loan Facility” and together
with the USD Term Loan Facility, the “Term Loan Facility”) in a mutually
agreeable amount (to be determined at the time of the launch of primary
syndication) of the Euro equivalent of up to $500 million denominated in Euros
(the loans thereunder, the “Initial Euro Term Loans” and together with the
Initial USD Term Loans, the “Initial Term Loans”; together with term loans under
the Incremental Term Facilities, the “Term Loans”).

 

In the event that the Euro Term Loan Facility is less than the Euro equivalent
of $500 million, the USD Term Loan Facility shall be increased by an amount
equal to $500 million less the size of the Euro Term Loan Facility.

 

B-1

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Availability:

    

The Initial Term Loans shall be made in a single drawing on the Closing Date.
Repayments and prepayments of the Initial Term Loans may not be reborrowed.

 

Maturity and

Amortization:

    

The Initial Term Loans will mature on the date that is seven (7) years after the
Closing Date (the “Term Loan Maturity Date”). The Initial Term Loans shall be
repayable in equal quarterly installments in an aggregate annual amount equal to
1% of the original amount of the Term Loan Facility. The balance of the Initial
Term Loans will be repayable on the Term Loan Maturity Date.

III.             Purpose; Certain Payment Provisions

 

 

Purpose:

    

The proceeds of the Initial Term Loans shall be used to finance the Transaction
Costs.

 

Fees and Interest Rates:

    

As set forth on Annex I.

 

Mandatory Prepayments:

    

The “Term Credit Documentation” (as defined below) will contain mandatory
prepayment provisions that will require prepayments of amounts equal to:

 

(a) 100% of the net cash proceeds of any incurrence of debt after the Closing
Date by the Borrower or any of its subsidiaries, other than indebtedness
permitted under the Term Credit Documentation;

 

(b) 100% of the net cash proceeds of any sale or other disposition (including as
a result of casualty or condemnation) by the Borrower or any of its subsidiaries
of any assets in excess of $35 million, individually, or $50 million, in the
aggregate for each fiscal year, except for sales of inventory or obsolete or
worn-out property in the ordinary course of business and subject to certain
other customary exceptions (including customary reinvestment rights if
reinvested within twelve (12) months of such sale or disposition (or committed
to be reinvested within such period and reinvested within one hundred eighty
(180) days after the end of such twelve (12) month period)) consistent with the
Documentation Principles; and

 

(c) 50% of Excess Cash Flow (as defined below) for each fiscal year of the
Borrower (commencing with the first full fiscal year ending after the Closing
Date), subject to step-down to 25% when the Senior Secured Net Leverage Ratio
(as defined below) is less than or equal to 2.50 to 1.00 and greater than 2.00
to 1.00 and step-down to 0% when the Senior Secured Net Leverage Ratio is less
than or equal to 2.00 to 1.00

 

B-2

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(collectively, an “ECF Prepayment”); provided that (i) voluntary prepayments of
the Term Loans (including loans under any Incremental Term Facility (as defined
below), Incremental Equivalent Debt (to be defined in the Term Credit
Documentation consistent with the Documentation Principles), Refinancing Term
Facilities (as defined below) and Refinancing Equivalent Debt (to be defined in
the Term Credit Documentation consistent with the Documentation Principles) (in
each case, secured by the Collateral on a pari passu basis with the Term Loan
Facility)), the loans under the ABL Facility (including any incremental ABL
Facility and permitted refinancing indebtedness thereof and to the extent
accompanied by a corresponding reduction of the commitment) made during such
fiscal year and, at the option of the Borrower (and without counting such
amounts against the subsequent fiscal year’s Excess Cash Flow calculation),
after year-end and prior to the time such Excess Cash Flow prepayment is due,
will reduce the amount of Excess Cash Flow prepayments required for such fiscal
year on a dollar-for-dollar basis (which, in the case of loans prepaid at a
discount to par, will be limited to the actual amount of cash paid to Lenders in
connection with such prepayment (as opposed to the face amount of the loans so
prepaid)) (in each case, to the extent financed with Internally Generated Cash
(to be defined in the Term Credit Documentation consistent with the
Documentation Principles)) and (ii) Excess Cash Flow shall be reduced for, among
other things, cash used for capital expenditures (including planned capital
expenditures subject to the Contracted Amount Provisions), certain permitted
investments (including Permitted Acquisitions (as defined below) and contracted
investments and acquisitions so long as (A) such amounts are contractually
committed within the next twelve (12) months, (B) such amounts are utilized
(and, for the avoidance of doubt, shall not be deducted when used) during such
twelve (12) month period and (C) any amounts not utilized during such twelve
(12) month period shall be included in the calculation of Excess Cash Flow for
such fiscal year, the foregoing clauses (A), (B) and (C), the “Contracted
Amounts Provisions”), permitted regular dividends and certain other restricted
payments (including such restricted payments consistent with the Documentation
Principles), in each case, made during such fiscal year and, at the option of
the Borrower (and without counting such amounts against the subsequent fiscal
year’s Excess Cash Flow calculation), made prior to the date of such Excess Cash
Flow prepayment or committed to be made during such fiscal year or prior to the
date of such Excess Cash Flow prepayment (in each case, to the extent financed
with Internally Generated Cash) (with any shortfall in actual expenditures below
the amount committed and deducted in any prior calculation period added back to
Excess Cash Flow in the subsequent calculation period).

 

B-3

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Notwithstanding the foregoing, the Term Credit Documentation will provide that
in the event any indebtedness is incurred that is secured by the Collateral on a
pari passu basis with the Term Loan Facility, such indebtedness may share in any
prepayments made in respect of such facility or facilities sharing such
Collateral required by the foregoing provisions (to the extent that such
prepayments are required by the documentation governing such facility or
facilities) on no more than a ratable basis, subject to certain exceptions
consistent with the Documentation Principles.

 

Mandatory prepayments of the Term Loans may not be reborrowed. Mandatory
prepayments shall be applied pro rata to the outstanding Term Loan Facilities.
Within each Term Loan Facility, mandatory prepayments shall be applied to the
scheduled installments of principal of such Term Loan Facility in direct order
of maturity thereof. Mandatory prepayments shall be subject to (i) customary
limitations to the extent required to be made from cash at foreign restricted
subsidiaries, the repatriation of which would result in material adverse tax
consequences (as reasonably determined in good faith by the Borrower) or would
be prohibited or restricted by applicable law and (ii) customary provisions
related to the payment of pari passu indebtedness.

 

Any Lender under the Term Loan Facility may elect not to accept its pro rata
portion of any mandatory prepayment of the Term Loans (other than refinancing
debt) (each a “Declining Lender”). Any such prepayment amount declined by a
Declining Lender (“Declined Amounts”) may be retained by the Borrower and shall
increase the Cumulative Available Amount.

 

Excess Cash Flow:

    

To be defined in a usual and customary manner consistent with the Documentation
Principles, but to include, without duplication: Consolidated EBITDA plus/minus
(i) any changes in working capital minus (ii) the sum of the following:

 

●   Unfinanced capital expenditures;

 

●   Scheduled repayments of debt;

 

●   Interest expense;

 

●   Taxes and distributions for taxes;

 

●   Permitted Acquisitions;

 

●   Certain permitted investments;

 

●   Permitted regularly scheduled dividends; and

 

●   Other cash charges included as add-backs in definition of Consolidated
EBITDA.

 

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There shall also be included a carve-out for obligations to make acquisitions
subject to binding agreements and any capital expenditures to be made, in either
case, in next twelve (12) months, subject to reversal of such deduction if any
amount is not actually expended within such twelve (12) month period. Excess
Cash Flow deductions shall be limited in a customary manner to the extent not
financed with Internally Generated Cash.

 

Consolidated EBITDA:

    

Consolidated EBITDA shall be defined in a usual and customary manner consistent
with the Documentation Principles (and calculated pro forma for applicable
acquisitions and dispositions), and shall include (without limitation) the
following addbacks (or exclusions) from Consolidated Net Income (as defined
below) (without duplication):

(i) interest expense;

(ii) income taxes;

(ii) depreciation and amortization;

(iii) fees, expenses, premiums and other charges related to the issuance of
equity or debt (including this transaction, amendments, modifications,
refinancing, as well those undertaken but not completed);

(iv) fees, expenses and other charges related to Permitted Acquisitions,
permitted investments or permitted dispositions (including those undertaken but
not completed);

(v) any losses or expenses that are extraordinary, unusual or non-recurring
(including losses on sale of equipment or businesses outside the ordinary course
of business);

(vi) any non-cash expenses, losses, charges or impairments including stock-based
compensation and LIFO reserves established during such period;

(vii) non-recurring cash expenses for restructuring charges or expenses,
integration expenses, accruals, reserves and business optimization expenses;

(viii) net unrealized losses on hedge agreements;

(ix) (A) net cost savings and operating expense reductions actually implemented
by the Borrower or related to a Permitted Acquisition which have been taken or
will be taken within eighteen (18) months from the applicable closing date and
(B) synergies projected to be realized as a result of actions taken, so long as
(A) and (B) are reasonably identifiable and factually supportable; (Minus)

(i) unusual, extraordinary or non-recurring gains;

(ii) income tax credits or non-cash income (including gains on sale of equipment
or businesses and LIFO reserves terminated during such period); and

(iii) net unrealized gains on hedge agreements.

 

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Consolidated Net Income:

    

Consolidated Net Income shall be defined to mean, for any period, the net income
(or loss) of the Borrower and its restricted subsidiaries determined on a
consolidated basis for such period; provided that, without duplication:

 

(i)          the cumulative effect of a change in accounting principles shall be
excluded;

(ii)         the net after-tax effect of extraordinary, non-recurring, unusual
or exceptional gains, losses, charges and expenses, including any relating to or
arising in connection with claims or litigation (including legal fees,
settlements, judgments and awards), shall be excluded;

(iii)        the net after-tax effect of gains, losses, charges and expenses
attributable to asset dispositions or the sale or other disposition of any
equity interests of any person other than in the ordinary course of business, as
determined in good faith by an authorized officer of the Borrower, shall be
excluded;

(iv)         the net after-tax effect of gains, losses, charges and expenses
attributable to disposed, discontinued, closed or abandoned operations and any
net after-tax gains, losses, charges and expenses related to the disposal of
disposed, abandoned, closed or discontinued operations shall be excluded;

(v)          the net after-tax effect of gains, losses, charges and expenses
attributable to the early extinguishment or conversion of indebtedness, hedge
agreements or other derivative instruments (including deferred financing
expenses written off and premiums paid) shall be excluded;

(vi)          the net income for such period of any person that is an
unrestricted subsidiary (as described below), or that is accounted for by the
equity method of accounting, shall be excluded; provided that Consolidated Net
Income shall be increased by the amount of dividends or distributions or other
payments that are actually paid to the company or any restricted subsidiary
thereof in respect of such period in cash or cash equivalents (or to the extent
subsequently converted into cash or cash equivalents);

(vii)         the effects of adjustments (including the effects of such
adjustments pushed down to the Borrower and its restricted subsidiaries) in any
line item in such person’s consolidated financial statements pursuant to GAAP
resulting from the application of purchase accounting, as the case may be, in
connection with the Transactions, any acquisition or any joint venture
investments or the amortization or write off of any amounts thereof, net of
taxes, shall be excluded;

(viii)        impairment and amortization charges, asset write offs and write
downs (but excluding any write offs or write downs of inventory), including
impairment and amortization charges, asset write offs and write downs related to
goodwill, intangible assets, long-lived assets, investments in debt and equity
securities or as a result of a change in law or regulation, in each case,
pursuant to GAAP shall be excluded;

 

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(ix)          non-cash compensation charges and expenses, including any such
charges and expenses arising from grants of stock appreciation or similar
rights, phantom equity, stock options, restricted stock, deferred stock or other
rights or equity incentive programs and non-cash deemed finance charges in
respect of any pension liabilities or other provisions shall be excluded;

(x)           (A) charges and expenses pursuant to any management equity plan,
long-term incentive plan or stock option plan or any other management or
employee benefit plan or agreement, any stock subscription or shareholder
agreement and (B) charges, expenses, accruals and reserves in connection with
the rollover, acceleration or payout of equity interests held by management of
the Borrower or any of the restricted subsidiaries, in the case of each of
(A) and (B) above, to the extent that (in the case of any cash charges and
expenses) such charges, expenses, accruals and reserves are funded with cash
proceeds contributed to the capital of the Borrower or net cash proceeds of an
issuance of equity interests (other than mutually agreed upon disqualified
stock) of the Borrower or any direct or indirect parent of the Borrower shall be
excluded;

(xi)          any non-cash loss, charge or expense relating to the incurrence of
obligations in respect of an “earn out” or other similar contingent obligations
(but only for so long as such loss, charge or expense remains a non-cash
contingent obligation) shall be excluded;

(xii)         the extent covered by insurance (including business interruption
insurance) and actually reimbursed, or, so long as the Borrower has made a
determination that there exists reasonable evidence that such amount will in
fact be reimbursed by the insurer and only to the extent that (i) such coverage
is not denied by the applicable carrier or indemnifying party in writing within
365 days and (ii) such amount is in fact reimbursed within 365 days of the date
of such determination (with a deduction in the applicable future period for any
amount so added back to the extent not so reimbursed within 365 days), losses,
charges, expenses, accruals and reserves with respect to liability or casualty
events or business interruption shall be excluded;

(xiii)        (A) non-cash or unrealized gains or losses in respect of
obligations under hedge agreements or any ineffectiveness recognized in earnings
related to qualifying hedge transactions or the fair value of changes therein
recognized in earnings for derivatives that do not qualify as hedge
transactions, in each case, in respect of obligations under hedge agreements,
and (B) gains or losses resulting from unrealized currency translation gains or
losses related to currency re-measurements of indebtedness (including gains or
losses resulting from (x) hedge agreements for currency exchange risk and
(y) intercompany indebtedness) shall be excluded;

 

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(xiv)      non-cash interest and similar charges or expenses on defined benefit,
defined contribution or other pension plans shall be excluded;

(xv)      any expenses or charges to the extent paid by a third party that is
not a restricted subsidiary on behalf of the Borrower or a restricted subsidiary
(and not required to be reimbursed), and any gain resulting from such payment,
shall be excluded;

(xvi)      any expenses, charges or losses that are covered by indemnification
or other reimbursement provisions in connection with any investment, Permitted
Acquisition or any sale, conveyance, transfer or other disposition of assets
permitted under the Term Credit Facility, to the extent actually reimbursed, or,
so long as the Borrower has made a determination that a reasonable basis exists
for indemnification or reimbursement and only to the extent that such amount is
in fact indemnified or reimbursed within 365 days of such determination (with a
deduction in the applicable future period for any amount so added back to the
extent not so indemnified or reimbursed within such 365 day period), shall be
excluded,

(xvii)    any net pension or other post-employment benefit costs representing
amortization of unrecognized prior service costs, actuarial losses, including
amortization of such amounts arising in prior periods, amortization of the
unrecognized net obligation (and loss or cost) existing at the date of initial
application of FASB Accounting Standards Codification 712 and 715, Statement on
Financial Accounting Standards Nos. 87, 106 and 112, as applicable, and any
other items of a similar nature, shall be excluded;

(xviii)    non-recurring charges, expenses and fees incurred, including
financial advisory, accounting, auditor, legal and other consulting and advisory
fees and any or other filing fees and expenses, or any amortization thereof, in
connection with any equity offering, acquisition, merger, amalgamation,
investment, recapitalization, asset disposition, incurrence or repayment of
indebtedness (including deferred financing expenses), refinancing transaction,
restructuring or amendment or modification of any debt instrument (in each case,
including in connection with the Transactions and any such transaction
consummated prior to the Closing Date and any transaction undertaken but not
completed) and any non-recurring charges and expenses (including non-recurring
merger or amalgamation expenses) incurred as a result of any such transaction
shall be excluded; and

(xix)      losses, charges and expenses relating to the Transactions paid within
the six (6) months after the Closing Date (including, without limitation, any
financial advisory fees, filing fees, accounting fees, legal fees and other
similar advisory and consulting fees and related out of pocket expenses and
other fees, discounts and commissions, including with regard to arranging or
syndication) shall be excluded.

 

B-8

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Voluntary Prepayments:

    

Permitted in whole or in part, with prior written notice but without premium or
penalty (other than as set forth below), subject to a minimum amount of
prepayment of $500,000 and integral multiples of $250,000 in excess of that
amount and customary indemnification for breakage costs in the case of
prepayment of “Eurodollar Loans” (as defined in Annex I) other than on the last
day of a related interest period. Voluntary prepayments of the Term Loans shall
be applied to installments thereof as directed by the Borrower (or absent such
direction, in direct order of maturity thereof). Voluntary prepayments of the
Term Loans may not be reborrowed.

 

Any (a) voluntary prepayment of the Term Loans using proceeds of widely
syndicated term loan B facility incurred by the Borrower or any of its
subsidiaries from a substantially concurrent incurrence of a widely syndicated
term loan B facility for which the all-in yield (calculated as described under
“Incremental Facilities and Refinancing Facilities” below) on the date of such
prepayment is lower than the all-in yield on the date of such prepayment with
respect to the Initial Term Loans on the date of such prepayment and
(b) repricing of the Initial Term Loans pursuant to an amendment to the Term
Credit Documentation resulting in the all-in-yield thereon on the date of such
amendment being lower than the all-in-yield on the date immediately prior to
such amendment with respect to the Term Loans on the date immediately prior to
such amendment (including any “yank-a-bank” assignment in connection with any
such amendment) shall be accompanied by a prepayment fee equal to 1.00% of the
aggregate principal amount of such prepayment (or, in the case of clause
(b) above, of the aggregate amount of Initial Term Loans outstanding immediately
prior to such amendment) if made on or prior to the six-month anniversary of the
Closing Date.

IV.        Incremental Facilities and Refinancing Facilities

 

      

The Term Credit Documentation will permit the Borrower to add one or more
incremental term loan facilities to the Term Loan Facility (each, an
“Incremental Term Facility”); provided that (i) no Lender will be required to
participate in any such Incremental Term Facility, (ii) the loans under any such
Incremental Term Facility shall be secured by a pari passu lien on the
Collateral securing the Term Loan Facility, (iii) no payment or bankruptcy event
of default (as defined below) exists or would exist after giving effect thereto,
(iv) the aggregate principal amount of the Incremental Term Facilities shall not
exceed (A) $800 million plus (B) any voluntary prepayments of Term Loans or
loans under the ABL Facility (to the extent ABL Facility commitments are
permanently reduced)

 

B-9

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to the extent not financed with indebtedness) plus (C) an unlimited additional
amount such that, in the case of this clause (C) only, after giving pro forma
effect thereto (and any acquisition financed thereby but without netting any
cash proceeds of such indebtedness), the Secured Net Leverage Ratio is no
greater than 2.25 to 1.00, (v) the representations and warranties in the Term
Credit Documentation shall be true and correct in all material respects
immediately prior to, and after giving effect to, the incurrence of such
Incremental Term Facility, (vi) the maturity date and weighted average life to
maturity of any such Incremental Term Facility shall be no earlier than the
maturity date and weighted average life to maturity, respectively, of the
existing Term Loan Facility, (vii) the interest rates and amortization schedule
applicable to any Incremental Term Facility shall be determined by the Borrower
and the lenders thereunder; provided that, with respect to any Incremental Term
Facility incurred during the period commencing on the Closing Date and ending on
the date that is twelve (12) months after the Closing Date, the all-in-yield
(whether in the form of interest rate margins, original issue discount, upfront
fees or LIBOR/ABR floors) applicable to any Incremental Term Facility will not
be more than 0.50% higher than the corresponding all-in-yield (giving effect to
interest rate margins, original issue discount, upfront fees and LIBOR/ABR
floors) for the existing Term Loan Facility, unless the interest rate margins
with respect to the existing Term Loan Facility are increased by an amount equal
to the difference between the all-in-yield with respect to the Incremental Term
Facility and the corresponding all-in yield on the existing Term Loan Facility
minus 0.50%, (viii) no Incremental Term Facility shall have greater obligors or
collateral than the Term Loan Facility and (ix) any Incremental Term Facility
shall be on terms and pursuant to documentation to be determined; provided
further that, to the extent such terms and documentation are not consistent with
the Term Loan Facility (except to the extent permitted by clause (vi) or (vii)
above), they shall be reasonably satisfactory to the Term Loan Administrative
Agent or, if such terms are more favorable to the holders of such Incremental
Term Facility, an equivalent amendment shall be made to the Term Credit
Documentation for the benefit of the existing Term Loan Facility (provided that
if such amendment is required and benefits the Term Loan Facility, then it shall
be reasonably satisfactory to the Term Loan Administrative Agent). The proceeds
of the Incremental Term Facility may be used for working capital and other
general corporate purposes of the Borrower and its subsidiaries, including
Permitted Acquisitions, investments, debt repayments and other uses not
prohibited by the Term Loan Facility. With respect to Permitted Acquisitions,
the Incremental Term Facility shall be subject to limited conditionality
provisions customary for a transaction of this type and reasonably acceptable to
the Term Loan Administrative Agent.

 

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Incremental Equivalent Debt may be incurred in lieu of loans under any
Incremental Term Facility subject to customary limitations, including (a) same
“most favored nation” pricing provisions set forth in the proviso to clause
(vii) of the foregoing paragraph, (b) the maturity date of such Incremental
Equivalent Debt will be no earlier than the maturity date of the Term Loan
Facility, (c) the weighted average life to maturity of such Incremental
Equivalent Debt may not be shorter than the remaining weighted average life to
maturity of the Term Loan Facility, (d) the incurrence of such Incremental
Equivalent Debt, after giving pro form effect thereto, is subject to (i) in the
case of Incremental Equivalent Debt that is secured equally and ratably with the
Term Loan Facility, a maximum Senior Secured Net Leverage Ratio of up to 2.25 to
1.00, (ii) in the case of Incremental Equivalent Debt that is secured on a
junior lien basis, a maximum Senior Secured Net Leverage Ratio of up to 2.75 to
1.00 and (iii) in the case of Incremental Equivalent Debt that is unsecured, a
maximum Total Net Leverage Ratio of 3.25 to 1.00.

 

The Term Credit Documentation will permit the Borrower to refinance loans under
the Term Loan Facility and any Incremental Term Facility from time to time, in
whole or in part, with (a) one or more new term loan credit facilities (each, a
“Term Refinancing Facility”) under the Term Loan Facility Documentation with the
consent of the Borrower, the Term Loan Facility Administrative Agent (not to be
unreasonably withheld, delayed or conditioned) and the entities providing such
Term Refinancing Facility, (b) one or more series of senior unsecured notes or
term loans, (c) one or more series of senior secured notes or term loans that
will be secured by the Collateral on an equal and ratable basis with the Term
Loan Facility, which will be subject to the intercreditor arrangements provided
for in the Term Credit Documentation, or (d) one or more series of junior lien
notes or term loans that will be secured on a subordinated basis to the Term
Loan Facility, which will be subject to the intercreditor arrangements provided
for in the Term Credit Documentation (any such notes or loans, “Term Refinancing
Notes”), subject, in each case, solely to the following terms and conditions:
(i) no such Term Refinancing Facility or Term Refinancing Notes may mature prior
to the maturity date of, or have a shorter weighted average life to maturity
than, the loans under the Term Loan Facility or Incremental Term Facility being
refinanced; (ii) no Term Refinancing Facility or Term Refinancing Notes may have
an obligor that is not an obligor in respect of the Term Loan Facility; (iii) to
the extent secured, no Term Refinancing Facility or Term Refinancing Notes may
be secured by any assets that do not constitute Collateral; (iv) as reasonably

 

B-11

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determined by the Borrower, the other terms and conditions of such Term
Refinancing Facility or Term Refinancing Notes (excluding pricing and optional
prepayment or redemption terms) must be substantially identical to, or not
materially more favorable (taken as a whole) to the lenders providing such Term
Refinancing Facility or Term Refinancing Notes, as applicable, than those
applicable to the Term Loan Facility or Incremental Term Facility being
refinanced are to the Lenders (except for covenants and other provisions
applicable only to periods after the latest final maturity date of the Term Loan
Facility or Incremental Term Loan Facility existing at the time of such
refinancing) or must otherwise be reasonably satisfactory to the Term Loan
Administrative Agent or, if such terms are more favorable to the holders of such
Term Refinancing Facility, an equivalent amendment shall be made to the Term
Credit Documentation for the benefit of the existing Term Loan Facility
(provided that if such amendment is required and benefits the Term Loan
Facility, then it shall be reasonably satisfactory to the Term Loan
Administrative Agent); (v) the amount of such Term Refinancing Facility or Term
Refinancing Notes will be in an amount not in excess of the amount of loans and
commitments refinanced plus fees, expenses and premiums payable in connection
therewith; and (vi) the proceeds of such Term Refinancing Facility or Term
Refinancing Notes shall be applied, substantially concurrently with the
incurrence thereof, to the pro rata prepayment of outstanding loans under the
applicable Term Loan Facility being so refinanced; and provided further that in
no event shall Term Refinancing Facility or Term Refinancing Notes be permitted
to be voluntarily or mandatorily prepaid prior to the repayment in full of all
Term Loan Facility, unless accompanied by a ratable prepayment of the Term Loan
Facility. The Term Refinancing Facilities and Term Refinancing Notes will not be
subject to any “most favored nation” pricing provisions.

V.         Collateral and Other Credit Support

 

 

Collateral:

    

The Term Loan Facility will be secured by substantially all assets of the Loan
Parties (as defined below), whether consisting of real, personal, tangible or
intangible property, including all of the outstanding equity interests of the
Borrower’s subsidiaries (collectively, the “Collateral”), subject to exceptions
and limitations consistent with the Documentation Principles. The Collateral
will also secure the ABL Facility. The liens securing the Term Loan Facility
will be first priority in the case of ‘Term Priority Collateral” (as defined
below) and second priority in the case of “ABL Priority Collateral” (each as
defined below).

 

“Term Priority Collateral” means all Collateral other than ABL Priority
Collateral.

 

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“ABL Priority Collateral” means all of the Loan Parties’ present and after
acquired cash, accounts receivable, credit card receivables, inventory, deposit
accounts (other than deposit accounts in which net cash proceeds from the sale
of non-ABL Priority Collateral are deposited pending reinvestment), securities
accounts, commodities accounts, instruments, documents, chattel paper, books and
records, and all proceeds relating to the foregoing.

 

Notwithstanding anything to the contrary, the Collateral shall exclude the
following: (a) assets subject to certificates of title, letter of credit rights
other than “supporting obligations” as defined in the UCC and commercial tort
claims other than claims with a value as set forth in the Term Credit
Documentation, for which a claim has been filed in a court of competent
jurisdiction; (b) “margin stock” (within the meaning of Regulation U) and
pledges and security interests prohibited by applicable law, rule or regulation
or agreements with any governmental authority; (c) equity interests in any
person other than the Guarantors to the extent such person is not a wholly owned
subsidiary and such pledge is not permitted by the terms of such subsidiary’s
organizational or joint venture documents, in each case, after giving effect to
the applicable anti-assignment provisions of the UCC; (d) equity interests in
unrestricted subsidiaries; (e) any lease, license, contract or other agreement
or document or any property subject to a purchase money security interest or
similar arrangement not prohibited by the Term Credit Documentation to the
extent that a grant of a security interest therein would require the consent of
a third party, violate or invalidate such lease, license, contract agreement,
document or purchase money arrangement or create a right of termination in favor
of any other party thereto (other than the Borrower or a subsidiary) after
giving effect to the applicable anti-assignment provisions of the UCC (other
than the proceeds and receivables thereof the assignment of which is expressly
deemed effective under the UCC); (f) those assets as to which the Term Loan
Administrative Agent and the Borrower reasonably agree in writing that the cost,
burden, difficulty or consequence of obtaining such a security interest or
perfection thereof is excessive in relation to the benefit to the Lenders of the
security to be afforded thereby; (g) assets of any subsidiary that is prohibited
by applicable law, rule or regulation or, to the extent listed on a schedule
detailing what is excluded, by any contractual obligation existing on the
Closing Date (or, if later, the date it becomes a restricted subsidiary) from
pledging assets to secure the Term Loan Facility or for which governmental
(including regulatory) consent, approval, license or authorization would be
required for a pledge of such assets unless such consent, approval, license or
authorization has been received; (h) assets to the extent a security interest in
such assets would result in an investment in “United States property” by a
controlled foreign corporation within the meaning of sections 956

 

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and 957 of the Internal Revenue Code and the Treasury regulations thereunder (a
“CFC”) or would otherwise result in a material adverse tax consequence, as
reasonably determined by the Borrower and in consultation with the Term Loan
Administrative Agent; and (i) any intent-to-use trademark application filed in
the United States Patent and Trademark Office pursuant to Section 1(b) of the
Lanham Act, 15 U.S.C. Section 1051, prior to the accepted filing of a “Statement
of Use” and issuance of a “Certificate of Registration” pursuant to Section 1(d)
of the Lanham Act or an accepted filing of an “Amendment to Allege Use” whereby
such intent-to-use trademark application is converted to a “use in commerce”
application pursuant to Section 1(c) of the Lanham Act and any other
intellectual property in any jurisdiction where such pledge or security interest
would cause the invalidation or abandonment of such intellectual property under
applicable law (the foregoing described in clauses (a) through (i) are,
collectively, the “Excluded Assets”); provided, that the Excluded Assets shall
include additional exclusions consistent with the Documentation Principles.

 

Intercreditor Agreement:

    

The lien priority, relative rights and other creditors’ rights issues in respect
of the ABL Facility and the Term Loan Facility will be set forth in a customary
intercreditor agreement (the “Intercreditor Agreement”), which shall be
reasonably satisfactory to the Borrower, the Term Loan Administrative Agent and
the ABL Administrative Agent.

 

Guarantees:

    

Subject to the limitations set forth herein, all of the indebtedness,
obligations and liabilities of the Borrower arising under or in connection with
the Term Credit Documentation shall be guaranteed by the direct and indirect
wholly-owned domestic subsidiaries of the Borrower (the “Guarantors”; the
Borrower and the Guarantors are collectively referred to herein as the “Loan
Parties”).

 

Notwithstanding anything herein to the contrary, at no time will the Guarantors
include (a) unrestricted subsidiaries, (b) Immaterial Subsidiaries (as defined
below), (c) joint ventures, if any, to the extent a guaranty is prohibited by
its organizational documents (d) any subsidiary that is prohibited or restricted
by applicable law, rule or regulation or by any contractual obligation listed on
a schedule and existing on the Closing Date (or, if later, the date it becomes a
restricted subsidiary) from guaranteeing the Term Loan Facility or which would
require governmental (including regulatory) consent, approval, license or
authorization to provide a guarantee unless such consent, approval, licensor
authorization has been received, (e) any subsidiary whose provision of a
guarantee would constitute an investment in “United States property” by a CFC or
otherwise result in a material adverse tax consequence to the Borrower or one of
its subsidiaries as reasonably determined by the Borrower in

 

B-14

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consultation with the Term Loan Administrative Agent, (f) any subsidiary owned
directly or indirectly by a CFC whose provision of a guarantee would constitute
an investment in “United States property” by a CFC, (g) any domestic subsidiary
that is a disregarded entity for United States federal income tax purposes and
substantially all of whose assets consist (directly or indirectly through
disregarded entities) of the capital stock or debt of CFCs any subsidiary whose
provision of a guarantee would constitute an investment in “United States
property” by a CFC, (h) not-for-profit subsidiaries and captive insurance
companies, if any, and (i) any restricted subsidiary acquired pursuant to a
Permitted Acquisition financed with indebtedness permitted to be incurred
pursuant to the Term Credit Documentation as assumed indebtedness and any
restricted subsidiary thereof that guarantees such indebtedness, in each case to
the extent such secured indebtedness prohibits such subsidiary from becoming a
Guarantor (collectively, the “Excluded Subsidiaries”).

 

Notwithstanding the foregoing, subsidiaries may be excluded from the guarantee
requirements in circumstances where the Borrower and the Term Loan
Administrative Agent reasonably agree that the cost (including any tax cost),
burden, difficulty or consequence of providing such a guarantee is excessive in
relation to the value afforded thereby.

 

“Immaterial Subsidiary” means, as of any date, any subsidiary of any Loan Party
for which its consolidated assets determined in accordance with GAAP is less
than 5% of consolidated total assets; provided that the consolidated total
assets of all Immaterial Subsidiaries shall not exceed 10% of consolidated total
assets determined in accordance with GAAP.

VI.        Certain Conditions

 

 

Conditions Precedent:

    

The availability of the Term Loan Facility on the Closing Date shall be subject
only to the conditions precedent set forth in Section 6 of the Commitment Letter
and on Exhibit D to the Commitment Letter.

VII.        Certain Documentation Matters

 

      

The definitive documentation for the Term Loan Facility (the “Term Credit
Documentation” and, together with the ABL Credit Documentation, the “Credit
Documentation”) shall be (i) consistent with this Term Sheet and shall contain
those payments, mandatory prepayments, representations, warranties, covenants
and events of default expressly set forth in this Term Sheet, (ii) will be based
upon, and at least as favorable (except with respect to matters expressly set
forth in the Commitment Letter) to the Borrower as, the TTM Technologies, Inc.
Term Loan Credit Agreement dated May 31, 2015, as amended

 

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(“Documentation Precedent”), but will (except with respect to matters expressly
set forth in the Commitment Letter and modifications to reflect the non-ABL
facility nature of the Term Credit Documentation) in no event be less favorable
to the Borrower than the terms of the Existing Credit Agreement, with
modifications consistent with the term sheet (including this paragraph) and
customary modifications appropriate in view of the structure and intended use of
the Term Loan Facility (including with respect to the timing and procedures for
funding the Term Loan Facility on the closing date to facilitate the closing of
the Transactions in accordance with the Purchase Agreement), (iii) reflect any
changes in law or accounting standards (or in the interpretation thereof) since
the date of the Documentation Precedent as reasonably agreed by the Borrower and
the Lead Arrangers, (iv) be negotiated in good faith to finalize the Term Credit
Documentation, giving effect to the conditions precedents and limited
conditionality provisions set forth in the Commitment Letter, (v) include
modifications as are necessary to reflect the operational and strategic
requirements of the Borrower and its subsidiaries (after giving effect to the
Transactions) in light of their size, total assets, geographic locations,
industry (and risks and trends associated therewith), businesses, business
practices, operations and projections and (vi) are otherwise mutually agreed
upon by the Borrower and the Lead Arrangers (the foregoing clauses (i) through
(vi), collectively, the “Documentation Principles”).

 

The Term Credit Documentation shall contain the following representations,
warranties, covenants and events of default, that will be applicable to the
Borrower and its restricted subsidiaries (or, in the case of certain customary
representations, warranties and affirmative covenants, all subsidiaries),
customary for financings of this type and subject to exceptions, as appropriate,
to be mutually agreed upon, in each case, consistent with the Documentation
Principles:

 

Representations and

Warranties:

    

Financial statements; no material adverse change; existence and standing,
authorization and validity; compliance with law, including, without limitation,
anti-corruption laws relating to bribery or corruption (“Anti-Corruption Laws”)
and economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the (a) U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury or the U.S. Department of State, or (b) the United Nations Security
Council, the European Union, Her Majesty’s Treasury of the United Kingdom or
other relevant sanctions authority (“Sanctions”); corporate power and authority;
enforceability of Term Credit Documentation; no conflict with law or contractual
obligations; no material litigation; no default; ownership of property; liens;
intellectual property; no burdensome restrictions; taxes; insurance; Federal
Reserve regulations; ERISA; Investment Company Act; subsidiaries; environmental
matters; labor matters; accuracy of disclosure; and no EEA financial
institution.

 

B-16

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Affirmative Covenants:

    

Delivery of quarterly unaudited and annual audited financial statements, annual
projections (one (1) year budget), and other information (within 45/90/90 days
or such later date as otherwise permitted by the SEC, if applicable, for
delivery of quarterlies, annuals and projections, respectively); payment of
obligations; continuation of business and maintenance of existence and material
rights and privileges; compliance with laws and material contractual
obligations; maintenance of policies and procedures designed to ensure
compliance with Anti-Corruption Laws and applicable Sanctions; accuracy of
information; maintenance of property and insurance; maintenance of books and
records; right of the Lenders to inspect property and books and records; notices
of defaults, litigation and other material events; compliance with environmental
laws; casualty and condemnation; use of proceeds, including in compliance with
Anti-Corruption Laws and Sanctions; and use of commercially reasonable efforts
to obtain and maintain public corporate credit and public corporate family
ratings of the Term Loan Facility (but, in each case, not to maintain a specific
rating).

 

Financial Covenants:

    

None.

 

Negative Covenants:

    

Limitations (subject to exceptions, as appropriate, to be negotiated and
including the specific exceptions set forth herein, with applicable grower
baskets to be based on either an equivalent percentage of Consolidated EBITDA or
consolidated total assets, as determined by the Borrower prior to launch of
general syndication) on:

      

●   indebtedness (including guarantee obligations), including but not limited to
exceptions for indebtedness (a) under the ABL Facility up to the greater of (i)
$900.0 million or (ii) (x) 85% of eligible accounts plus (y) 85% of eligible
inventory, (b) under the Incremental Term Facility (including Incremental
Equivalent Debt), (c) existing on the Closing Date and scheduled and any
permitted refinancing thereof, (d) under permitted refinancing facilities,
(e) incurred in connection with a purchase money security interest, capital
lease obligation or other similar arrangements up to the greater of (i)
$85 million or (ii) an equivalent grower basket, (f) incurred or acquired in
connection with an acquisition permitted under the Term Credit Documentation
subject to, after giving pro forma effect thereto, either (i) a maximum Total
Net Leverage Ratio of 2.75 to 1.00 or (ii) the Total Net Leverage Ratio is less
than or equal to the Total Net Leverage Ratio immediately prior to giving effect
to such

 

B-17

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incurrence and all transactions in connection therewith, (g) from usual and
customary earnout obligations including purchase price adjustments, (h) incurred
by restricted subsidiaries that are not Loan Parties up to the greater of (i)
$150 million or (ii) an equivalent grower basket, (i) in respect of contribution
debt up to 100% of net cash proceeds of equity issuances and cash contributions,
(j) in the form of standby repurchase obligations on dealer inventory financing
in the ordinary course of business, (k) incurred in connection with receivables
and factoring agreements and wholesale financing consistent with the Target’s
past practices, (l) that is secured on a junior lien basis subject to, on a pro
forma basis, a maximum Secured Net Leverage Ratio of 2.75 to 1.00 and other
customary terms consistent with the Documentation Principles, (m) not otherwise
covered under the other indebtedness baskets (i) up to $250 million or (ii) an
equivalent grower basket, (n) on an unlimited basis, so long as (i) such
indebtedness is either unsecured or subordinated, (ii) no event of default (as
defined below) has occurred and is continuing prior to or after giving effect to
such indebtedness, (iii) the Total Net Leverage Ratio is, on a pro forma basis,
no greater than 3.25 to 1.00 and (v) in the case of restricted subsidiaries that
are not Loan Parties, such indebtedness shall not exceed the greater of (i)
$150.0 million or (ii) equivalent grower basket, (o) other existing indebtedness
of Target and its subsidiaries that by its terms cannot be prepaid without
consent of the lender thereof and which remains outstanding on the Closing Date
(the “Continuing External Debt”) and (p) other usual and customary exceptions
consistent with the Documentation Principles;

 

      

●   liens, including, but not limited to, exceptions for liens (a) under the ABL
Facility securing up to an amount equal to the amount permitted under the
equivalent indebtedness basket, (b) the Incremental Term Facility (including any
Incremental Equivalent Debt), (c) liens existing on the Closing Date and
scheduled, (d) securing permitted refinancing indebtedness, (e) any purchase
money security interest, capital lease obligation or other liens securing
similar arrangements in an amount equal to the equivalent indebtedness basket,
(f) liens incurred or acquired in connection with an acquisition permitted under
the Term Credit Documentation (limited to existing liens on acquired assets, not
incurred in contemplation of acquisition), (g) incurred by restricted
subsidiaries that are not Loan Parties solely on their assets, that secure up to
an amount equal to the equivalent indebtedness basket, (h) on equity interests
in

 

B-18

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joint ventures securing obligations thereof, (i) securing receivables and
factoring agreements and wholesale financing consistent with the Target’s past
practices, provided such liens are on the property the subject thereof and are
subject to customary limitations to be agreed, (j) that are junior liens subject
to, on a pro forma basis, a maximum Secured Net Leverage Ratio of 2.75 to 1.00
and subject to customary terms consistent with the Documentation Principles,
(k) for procurement of chassis in the ordinary course of business, (l) not
otherwise covered under the other lien baskets up to the greater of (i)
$150 million (ii) and an equivalent grower basket and (m) other usual and
customary exceptions consistent with the Documentation Principles;

      

●   sales of assets, including, but not limited to, exceptions for
(a) dispositions of assets with fair market value not exceeding the greater of
(i) $100 million and (ii) an equivalent grower basket in aggregate per fiscal
year, (b) dispositions in connection with receivables and factoring agreements
consistent with the Target’s past practices, (c) unlimited dispositions for fair
market value subject to (i), if fair market value of such disposed assets
exceeds $50 million, at least 75% of the consideration will be in the form of
cash (or subject to the conversion into cash within one hundred (180) days),
(ii) non-cash consideration will not exceed the greater of (x) $100 million and
(y) an equivalent grower basket and (iii) the proceeds received from such
disposition will be subject to the mandatory prepayment provisions and (d) other
usual and customary exceptions consistent with the Documentation Principles;

 

●   payment of restricted payments (including dividends and other payments in
respect of equity interests), including, but not limited to, exceptions for
(a) regularly scheduled dividends (including share repurchases) not to exceed
$175 million per annum, with ability to carry over 25% from prior fiscal year
(on a non-cumulative basis), (b) restricted payments up to the Cumulative
Available Amount, subject to, on a pro forma basis, a maximum Total Net Leverage
Ratio of 2.50 to 1.00, (c) restricted payments representing officer or other
employee stock repurchases not to exceed $20 million per annum, with ability to
carry over for one fiscal year, (d) other restricted payments up to the greater
of (i) $150 million and (ii) an equivalent grower basket, (e) restricted
payments in an unlimited amount subject to (i) no event of default having
occurred and continuing prior to or after giving effect to such restricted
payment and (ii) pro forma Total Net Leverage Ratio no greater than 2.00 to

 

B-19

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1.00, (f) tax payments related to vesting of stock-based awards consistent with
past practices of the Borrower and (g) other usual and customary exceptions
consistent with the Documentation Principles;

      

●   investments (including acquisitions, loans and advances), including, but not
limited to, exceptions for (a) Permitted Acquisitions, (b) investments existing
on the Closing Date and scheduled, (c) loans and other advances to employees not
to exceed $5 million outstanding at any time, (d) guarantees of indebtedness
permitted under the Term Credit Documentation, (e) investments in restricted
subsidiaries that are not Loan Parties up to the greater of (i) $150 million and
(ii) an equivalent grower basket, (f) investments in joint ventures and
unrestricted subsidiaries up to the greater of (i) $100 million and (ii) an
equivalent grower basket, (g) investments in connection with receivables and
factoring agreements and wholesale financing consistent with the Target’s past
practices; (h) investments up to the Cumulative Available Amount, subject to, on
a pro forma basis, a maximum Total Net Leverage Ratio of 3.25 to 1.00, (i)
unlimited investments so long as (i) no event of default having occurred and
continuing prior to or after giving effect to such investment and (ii) the Total
Net Leverage Ratio is, on a pro forma basis, no greater than 2.75 to 1.00, (j)
investments not otherwise covered under the other investment baskets up to the
greater of (i) $250 million and (ii) an equivalent grower basket and (k) other
usual and customary exceptions consistent with the Documentation Principles;

 

“Permitted Acquisition” means any acquisitions by the Borrower or any of its
direct or indirect wholly owned restricted subsidiaries; provided that, (i) the
target of the acquisition constituting a Permitted Business (to be defined
consistent with the Documentation Principles) and such target becoming a Loan
Party under the Term Credit Documentation and (ii) no payment or bankruptcy
event of default has occurred and is continuing prior to or after giving effect
to such investment.

 

●   optional payments and modifications of subordinated and other debt
instruments, including, but not limited to, exceptions for (a) regularly
scheduled payments of principal and interest, (b) payments up to the Cumulative
Available Amount, subject to, on a pro forma basis, a maximum Total Net Leverage
Ratio of 2.50 to 1.00, (c) other payments up to the greater of (i) $100 million
and (ii) an equivalent grower basket, (d) unlimited payments subject to (i) no
event of default having occurred and

 

B-20

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continuing prior to or after giving effect to such payment or modification and
(ii) the Total Net Leverage Ratio being no greater than 2.25 to 1.00, (e)
payments (including prepayments) with respect to Continuing External Debt and
(f) other usual and customary exceptions consistent with the Documentation
Principles;

      

●   mergers, consolidations, liquidations and dissolutions;

 

●   sale and leaseback transactions;

 

●   swap agreements;

 

●   transactions with affiliates;

 

●   changes in fiscal year;

 

●   negative pledge clauses and other restrictive agreements; and

 

●   amendment of material documents.

 

Subject to customary limitations, the indebtedness, liens, investments,
restricted payments and restricted debt payments covenants shall permit the
re-classification of amounts among baskets.

 

“Cumulative Available Amount” means $150 million plus (a) the sum of (i) 100% of
net cash proceeds from qualified equity (including conversions of debt to
qualified equity), plus (ii) at the option of the Borrower (such option to be
exercised on or prior to the commencement of general syndication of the Term
Loan Facility) either (x) retained Excess Cash Flow or (y) 50% of Consolidated
Net Income, plus (iii) the amount of any investment made after the Closing Date
using the Cumulative Available Amount that is (A) returned in cash from partial
or total sale of such investment or (B) returns, repayments, profits, dividends
or interest received in cash therefrom; provided that, the amounts described in
(iii)(A) and (B) shall be capped at an amount equal to the Cumulative Available
Amount used to make such investment, plus (iv) any Declined Amounts plus
(v) distributions from joint ventures (without duplication with (iii)) not in
excess of the amount of the Cumulative Available Amount used to make such
investments in such joint venture, less (b) the aggregate amount of investments,
restricted payments and junior debt payments made using the Cumulative Available
Amount.

 

“Secured Net Leverage Ratio” shall be defined as the ratio of (i) total senior
secured debt less unencumbered cash on hand to (ii) Consolidated EBITDA.

 

B-21

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“Total Net Leverage Ratio” shall be defined as the ratio of (i) total debt less
unencumbered cash on hand to (ii) Consolidated EBITDA.

 

Unrestricted Subsidiaries:

    

The Term Credit Documentation will contain provisions pursuant to which, subject
to limitations on loans, advances, guarantees and other investments in
unrestricted subsidiaries, the Borrower will be permitted to designate any
existing or subsequently acquired or organized subsidiary as an “unrestricted
subsidiary” and subsequently re-designate any such unrestricted subsidiary as a
restricted subsidiary, in each case so long as, after giving pro form effect
thereto, no event of default has occurred and is continuing and such designation
as a restricted subsidiary would be permitted as a permitted investment.
Unrestricted subsidiaries will not be subject to the representations and
warranties, affirmative or negative covenant or event of default provisions of
the Term Credit Documentation and the results of operations and indebtedness of
unrestricted subsidiaries will not be taken into account for purposes of
determining compliance with any financial metric contained in the Term Credit
Documentation.

 

Events of Default:

    

Nonpayment of principal when due; nonpayment of interest, fees or other amounts
after a grace period of five (5) business days; representations and warranties
are incorrect in any material respect; violation of covenants (subject, in the
case of certain affirmative covenants, to a grace period to be agreed upon);
cross-default to occurrence of a default (whether or not resulting in
acceleration) under any other agreement governing indebtedness (other than the
Continuing External Debt), in excess of an amount to be agreed upon, of the
Borrower or any of its restricted subsidiaries; bankruptcy events; certain ERISA
events; material judgments; any of the Term Credit Documentation shall cease to
be in full force and effect or any Loan Party party thereto shall so assert; any
interests created by the security documents shall cease to be enforceable and of
the same priority purported to be created thereby; and a Change of Control (to
be defined in the Term Credit Documentation consistent with the Documentation
Principles) (after giving effect to applicable notice and cure periods, each an
“event of default”).

 

In addition, it shall be an event of default under the Term Credit Documentation
if the Borrower (or any of its affiliates) fails to comply with the “market
flex” provisions of the Arranger Fee Letter or the marketing or information
provisions of the Commitment Letter (including, without limitation, implementing
amendments to the Credit Documentation to reflect the terms of the “market flex”
provisions of the Arranger Fee Letter).

 

B-22

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Voting:

    

Amendments, waivers and consents with respect to the Term Credit Documentation
shall require the approval of Lenders holding not less than a majority of the
loans under the Term Loan Facility, except that (a) the consent of each Lender
directly and adversely affected thereby shall be required with respect to
(i) reductions in the amount or extensions of the scheduled date of maturity or
amortization of any loan or reductions in the amount or extensions of the
payment date of any required mandatory payments, (ii) reductions in the rate of
interest or any fee or extensions of any due date thereof, (iii) increases in
the amount or extensions of the expiry date of any Lender’s commitment and
(iv) modifying the pro rata sharing or collateral waterfall requirements of the
Term Credit Documentation, and (b) the consent of each Lender shall be required
to (i) permit any Loan Party to assign its rights under the Term Credit
Documentation, (ii) modify any of the voting percentages, (iii) release all or
substantially all of the Guarantors or (iv) release all or substantially all of
the Collateral.

 

The Term Credit Documentation will contain customary provisions consistent with
the Documentation Principles for replacing a Lender in connection with, among
other things, amendments and waivers to which such Lender has not consented that
require the consent of all, or of all adversely affected, Lenders so long as the
Required Lenders (to be defined in the Term Credit Documentation consistent with
the Documentation Principles) have consented thereto.

 

The Term Credit Documentation shall contain customary “amend and extend”
provisions or other loan modification offers to be mutually agreed, pursuant to
which individual Term Loan Lenders may agree to extend the maturity date of
their outstanding Term Loans or make other loan modifications to their
outstanding Term Loans upon the request of the Borrower and without the consent
of any other Term Loan Lender (it is understood that (i) no existing Term Loan
Lender will have any obligation to commit to any such extension or modification
and (ii) each Term Loan Lender under the class being extended or modified shall
have the opportunity to participate in such extension or modification on the
same terms and conditions as each other Term Loan Lender under such class).

 

Assignments and

Participations:

    

The Lenders shall be permitted to assign (which shall exclude in all cases
assignments to any Disqualified Lender) all or a portion of their loans and
commitments with the consent, not to be unreasonably withheld, of (a) the
Borrower (provided that the Borrower shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the Term
Loan Administrative Agent within five (5) business days after having received
notice thereof), unless (i) the assignee is a Lender, an affiliate of a Lender
or an approved fund or (ii) an event of default has occurred and is continuing
and (b) the Term

 

B-23

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Loan Administrative Agent, unless the assignee is a Lender, an affiliate of a
Lender or an approved fund. In the case of partial assignments (other than to
another Lender, to an affiliate of a Lender or an approved fund), the minimum
assignment amount shall be $1,000,000, unless otherwise agreed by the Borrower
and the Term Loan Administrative Agent. Each assignment shall be subject to the
payment of a service fee of $3,500 to the Term Loan Administrative Agent by the
parties to such assignment.

 

The Lenders shall also be permitted to sell participations in their loans.
Participants shall have customary benefits with respect to yield protection and
increased cost provisions. Voting rights of participants shall be limited to
customary matters. Pledges of loans in accordance with applicable law shall be
permitted without restriction. Each Lender may disclose information to
prospective participants and assignees.

 

“Disqualified Lenders” means (a) entities that are specifically identified by
the Borrower to the Term Loan Administrative Agent in writing prior to the date
of the Commitment Letter, or after the date of the Commitment Letter and prior
to the Closing Date with the reasonable consent of the Lead Arrangers,
(b) entities that are competitors of the Borrower or its subsidiaries (including
the Target and its subsidiaries) and which are specifically identified by the
Borrower to the Term Loan Administrative Agent in writing from time to time
(“Competitors”) and (c) in the case of the foregoing clauses (a) and (b), any of
such entities’ affiliates to the extent such affiliates (x)(i) are clearly
identifiable as affiliates based solely on the similarity of such affiliates’
names to an entity set forth on the “Disqualified Lenders” list and (ii) are not
bona fide debt investment funds or (y) upon reasonable notice to the Term Loan
Administrative Agent, are (i) identified as affiliates in writing in a written
supplement to the list of “Disqualified Lenders” and (ii) are not bona fide debt
investment funds. Any supplement shall become effective three (3) business days
after delivery to the Term Loan Administrative Agent and the Lenders, but which
shall not apply retroactively to disqualify any parties that have (i) previously
acquired an assignment or participation interest in the Loans, (ii) entered into
a trade for an assignment or participation interest in the Loans or (iii) become
a competitor of the Company or its subsidiaries before such entity is added to
the “Disqualified Lender” list, but upon effectiveness of such designation, any
such party may not acquire any additional commitments or participations;
provided that no supplements shall be made to the “Disqualified Lender” list
from and including the date of the launch of primary syndication of the Credit
Facilities through and including the Syndication Date. The list of Disqualified
Lenders (as updated from time to time) shall be made available to the Lenders
and to potential Lenders, and the confidentiality provisions shall not restrict
the foregoing. The register shall be available for inspection by the Borrower
and Lenders upon request.

 

B-24

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The Term Credit Documentation shall provide that Term Loans may be purchased by
and assigned to the Borrower or any subsidiary thereof through (a) Dutch
auctions open to all Lenders on a pro rata basis in accordance with customary
procedures to be mutually agreed and/or (b) open market purchases on a non-pro
rata basis, in each case on terms and conditions to be agreed, including no
default or event of default and no use of the ABL Facility to effect such
purchases. Any loans assigned to or purchased by the Borrower or any subsidiary
thereof shall be automatically and permanently cancelled immediately upon
acquisition thereof by the Borrower or such subsidiary.

 

In no event shall the Term Loan Administrative Agent be obligated to ascertain,
monitor or inquire as to whether any person is a Disqualified Lender or have any
liability with respect to or arising out of any assignment or participation of
loans or commitments by or disclosure of information by the Lenders, in each
case, to any Disqualified Lender.

 

Yield Protection:

    

The Term Credit Documentation shall contain customary provisions (a) protecting
the Lenders against increased costs or loss of yield resulting from changes in
reserve, tax, capital adequacy, liquidity and other requirements of law and from
the imposition of or changes in withholding or other taxes and (b) indemnifying
the Lenders for “breakage costs” incurred in connection with, among other
things, any prepayment of a Eurodollar Loan on a day other than the last day of
an interest period with respect thereto. The Dodd-Frank Wall Street Reform and
Consumer Protection Act and Basel III (and all requests, rules, guidelines or
directives relating to each of the foregoing or issued in connection therewith)
shall be deemed to be changes in law after the Closing Date regardless of the
date enacted, adopted or issued.

 

Expenses and

Indemnification:

    

The Borrower shall pay (a) all reasonable and documented out-of- pocket expenses
of the Term Loan Administrative Agent and the Lead Arrangers and their
affiliates associated with the syndication of the Term Loan Facility and the
preparation, execution, delivery and administration of the Term Credit
Documentation and any amendment or waiver with respect thereto (including the
reasonable and documented fees, disbursements and other charges of one primary
counsel and one local counsel in each applicable jurisdiction or as otherwise
retained with the Borrower’s consent (such consent not to be unreasonably
withheld or delayed) to the Administrative Agent and the Lead Arrangers and
their affiliates, in each case for all such parties taken together) and (b) all
reasonable and documented out-of-pocket expenses of the Term Loan

 

B-25

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Administrative Agent and the Lenders (including the reasonable and documented
fees, disbursements and other charges of one primary counsel and one local
counsel in each applicable jurisdiction for the Administrative Agent and the
Lenders taken as a whole, (and, in light of actual or potential conflicts of
interest or the availability of different claims or defenses (as reasonably
determined by the affected party), one additional firm of counsel to each group
of similarly affected parties)) in connection with the enforcement of the Term
Credit Documentation.

 

The Term Loan Administrative Agent, the Lead Arrangers and the Lenders (and
their affiliates and their respective officers, directors, employees, advisors,
representatives and agents) will have no liability for, and will be indemnified
and held harmless against, any loss, liability, cost or expense (including
reasonable and documented legal expenses of (x) one primary counsel and one
local counsel in each applicable jurisdiction, in each case for the indemnified
persons taken as a whole and (y) one additional counsel for each affected
indemnified person in light of actual or potential conflicts of interest or the
availability of different claims or defenses) incurred in respect of the
financing contemplated hereby or the use or the proposed use of proceeds thereof
(except to the extent determined by a court of competent jurisdiction by a final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the indemnified party).

 

Defaulting Lenders:

    

The Term Credit Documentation will contain the Term Loan Administrative Agent’s
customary provisions in respect of defaulting lenders.

 

EU Bail-In:

    

The Term Credit Documentation will contain the Term Loan Administrative Agent’s
customary provisions in respect of EU “Bail-In” matters.

 

Governing Law and

Forum:

    

State of New York.

 

Counsel to the

Term Loan Administrative

Agent and the Lead

Arranger:

    

Simpson Thacher & Bartlett LLP.

 

B-26

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Annex I to Exhibit B

Interest and Certain Fees

 

Interest Rate Options:

    

The Borrower may elect that the loans comprising each borrowing bear interest at
a rate per annum equal to (a), in the case of loans denominated in U.S. Dollars,
the Alternate Base Rate (such loans herein referred to as “ABR Loans”) plus the
Applicable Margin, (b), in the case of loans denominated in U.S. Dollars, the
Adjusted LIBO Rate plus the Applicable Margin and (c) in the case of loans
denominated in Euros, the EURIBOR (such loans described in clauses (b) and (c)
herein are referred to as “Eurodollar Loans”) plus the Applicable Margin.

 

As used herein:

 

“Alternate Base Rate” or “ABR” means the highest of (i) the “U.S. Prime Lending
Rate” published by The Wall Street Journal (the “Prime Rate”), (ii) the NYFRB
Rate from time to time plus 0.5% and (iii) the Adjusted LIBO Rate for a one
month interest period plus 1%.

 

“Adjusted LIBO Rate” means the LIBO Rate, as adjusted for statutory reserve
requirements for eurocurrency liabilities.

 

“Applicable Margin” means (i) 1.75% in the case of ABR Loans and (ii) 2.75% in
the case of Eurodollar Loans denominated in U.S. Dollars and (iii) 3.00% in the
case of Eurodollar Loans denominated in Euros.

 

“EURIBOR” means the rate per annum (adjusted for statutory reserve requirements
for euro liabilities) equal to (a) the offered rate per annum for euro deposits
appearing on Reuters Page EURIBOR01 (or any successor or substitute page which
displays an average determined by the European Banking Federation) (the “EURIBOR
Screen Rate”) as of 11:00 a.m., Brussels time, two business days prior to the
beginning of such Interest Period or (b) if the EURIBOR Screen Rate shall not be
available at such time for such interest period with respect to Euros, then the
EURIBOR Rate shall be customary interpolated rate; provided that if the EURIBOR
as so determined would be less than zero, such rate shall be deemed to be zero
for the purposes of calculating such rate.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any interest
period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two
(2) business days prior to the commencement of such interest period; provided
that if the LIBO Screen Rate shall not be available at such time for such
interest period (an “Impacted Interest Period”) then the LIBO Rate shall be a
customary interpolated rate (which in no event shall be less than zero).

--------------------------------------------------------------------------------

    

“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any interest period, the London interbank offered rate as
administered by ICE Benchmark Administration (or any other Person that takes
over the administration of such rate for U.S. dollars for a period equal in
length to such interest period as displayed on pages LIBOR01 or LIBOR02 of the
Reuters screen that displays such rate (or, in the event such rate does not
appear on a Reuters page or screen, on any successor or substitute page on such
screen that displays such rate, or on the appropriate page of such other
information service that publishes such rate from time to time as selected by
the Administrative Agent in its reasonable discretion); provided that if the
LIBO Screen Rate as so determined would be less than zero, such rate shall be
deemed to be zero for the purposes of calculating such rate.

 

“NYFRB Rate” means, for any day, the greater of (a) the federal funds effective
rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day; provided, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to zero for the purposes of calculating such rate.

 

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar Borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time,
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).

 

The Credit Documentation will contain provisions to be mutually agreed with
respect to a replacement of the LIBO Rate and/or EURIBOR.

Interest Payment Dates:

    

In the case of ABR Loans, interest shall be payable on the first day of each
quarter, upon any prepayment due to acceleration and at final maturity.

 

In the case of Eurodollar Loans, interest shall be payable in arrears on the
last day of each interest period and, in the case of an interest period longer
than three months, quarterly, upon any prepayment and at final maturity.

Default Rate:

    

After default, the applicable interest rate will be increased by 2% per annum
(and new Eurodollar Loans may be suspended). Overdue interest, fees and other
amounts shall bear interest at 2% above the rate applicable to ABR Loans.

Rate and Fee Basis:

    

All per annum rates shall be calculated on the basis of a year of 360 days (or
365/366 days, in the case of ABR Loans) for actual days elapsed.

--------------------------------------------------------------------------------

Exhibit C

PROJECT VISION

ABL FACILITY

Summary of Terms and Conditions

Set forth below is a summary of the principal terms and conditions for the ABL
Facility. Capitalized terms used but not defined shall have the meanings set
forth in the Commitment Letter to which this Exhibit C is attached and in
Exhibits A, B and D attached thereto.

 

I.   Parties     

Borrowers:

  

Thor Industries, Inc. (the “Company” or “Parent Borrower”) and certain
wholly-owned subsidiaries of the Company to be determined, including any
European Co-Borrower (as defined below) under the European Sub-Facility (as
defined below) (collectively, the “Borrowers”).

 

Joint Lead Arrangers

and Joint Bookrunners:

  

JPMorgan Chase Bank, N.A. (“JPMorgan”) and Barclays Bank PLC (“Barclays”, and
together with JPMorgan, in such capacity, the “Lead Arrangers”).

 

ABL Administrative

Agent:

  

JPMorgan (in such capacity, the “ABL Administrative Agent”).

 

Lenders:

  

A syndicate of banks, financial institutions and other entities, including
JPMorgan and Barclays, arranged by the Lead Arrangers (collectively, the
“Lenders”).

II.   ABL Facility     

Type and Amount of

Facility:

  

A five-year asset-based revolving credit facility (the “ABL Facility”; the
commitments thereunder, the “ABL Commitments”) in the amount of $750 million
(the loans thereunder, the “ABL Loans”).

 

European Sub-Facility:

  

The ABL Credit Documentation will provide that a portion of the ABL Facility in
an amount not to exceed $200 million U.S. dollar equivalent may be drawn by
certain wholly owned foreign subsidiaries of the Company organized in
jurisdictions reasonably satisfactory to the Lead Arrangers (such Borrowers, the
“European Co-Borrowers”, such sub-facility, the “European Sub-Facility”).

 

Incremental Facilities:

  

The ABL Facility will permit the Company to increase commitments under the ABL
Facility (any such increase, an “Incremental ABL Increase”) in an aggregate
amount of up to $150 million, but no less than $25 million and $1 million
increments thereafter; provided that (i) no existing ABL Lender will be required
to participate in any such ABL Incremental Increase without its consent, (ii) no
default or event of default under the ABL Facility would exist after giving
effect thereto and (iii) the documentation and terms of any ABL Incremental
Increase shall be documented solely as an increase to the commitments under the
ABL Facility without any change in terms other than those necessary to effect
such Incremental ABL Increase. Any upfront fees paid to Lenders pursuant to an
ABL Incremental Increase are to be determined between the Parent Borrower and
the ABL Lenders participating in such ABL Incremental Increase.

--------------------------------------------------------------------------------

 

Availability:

  

The ABL Facility shall be available on a revolving basis during the period
commencing on the Closing Date and ending on the fifth anniversary thereof (the
“ABL Maturity Date”). Extensions of credit under the ABL Facility to a Borrower
shall be available in U.S. dollars, Euros, British Pounds Sterling and other
currencies to be mutually agreed by the Borrower and each ABL Lender.

    

Extensions of credit under the ABL Facility will be subject to outstanding
Excess Availability (as defined below). The Domestic Loan Parties (as defined
below) and the European Loan Parties (as defined below) will each have separate
Borrowing Bases. Notwithstanding the foregoing, the European Co-Borrowers shall
be entitled to draw upon an amount up to the U.S. dollar equivalent of the
Excess Availability of the Domestic Loan Parties; provided that the principal
amount of any such draws shall reduce Excess Availability that may be drawn on
by the Domestic Loan Parties.

 

“Excess Availability” means, at any time, an amount equal to (i) the lesser of
the aggregate ABL Commitments and the Borrowing Base of the Loan Parties
minus (ii) the sum of the aggregate outstanding amount of borrowings under the
ABL Facility plus the undrawn amount of outstanding Letters of Credit issued
under the ABL Facility.

    

Notwithstanding the foregoing, the aggregate principal amount of borrowings
under the ABL Facility (exclusive of letter of credit usage) on the Closing Date
used to pay the Transaction Costs shall not exceed $200 million.

 

Letters of Credit:

  

A portion of the ABL Facility not in excess of $75 million, or such higher
amount as may be requested by the Company and agreed to by the Issuing Lender in
its sole discretion, shall be available for the issuance of letters of credit
(the “Letters of Credit”) by JPMorgan and other Lenders requested by the
Borrowers that have accepted such designation and that have been approved by the
ABL Administrative Agent (collectively in such capacity, the “Issuing Lenders”),
such consent not to be unreasonably withheld, delayed or conditioned. No Letter
of Credit shall have an expiration date after the earlier of (a) one (1) year
after the date of issuance and (b) five (5) business days prior to the ABL
Maturity Date, provided that any Letter of Credit may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (b) above).

    

Drawings under any Letter of Credit shall be reimbursed by the Borrowers
(whether with their own funds or with the proceeds of ABL Loans) on the same
business day. To the extent that the Borrowers do not so reimburse any Issuing
Lender, the Lenders under the ABL Facility shall be irrevocably and
unconditionally obligated to reimburse such Issuing Lender on a pro rata basis.

--------------------------------------------------------------------------------

 

Swing Line Loans:

  

A portion of the ABL Facility not in excess of $75 million shall be available,
at the discretion of the Swing Line Lender, for swing line loans (the “Swing
Line Loans”) from the ABL Administrative Agent (in such capacity, the “Swing
Line Lender”). The Borrowers may request Swing Line Loans from the Swing Line
Lender on same-day notice. Any such Swing Line Loans will reduce availability
under the ABL Facility on a dollar-for-dollar basis. Each Lender under the ABL
Facility shall acquire, under certain circumstances, an irrevocable and
unconditional pro rata participation in each Swing Line Loan.

 

Borrowing Base:

  

The “Borrowing Base” will with respect to either the Domestic Loan Parties or
the European Loan Parties, as applicable, equal the sum of (a) 85% of the
eligible accounts receivable of each wholly-owned Domestic Loan Party or
European Loan Party, as applicable, plus (b) the lesser of (i) 70% of each
wholly-owned Domestic Loan Party’s or European Loan Party’s, as applicable,
eligible inventory (valued at the lower of cost (FIFO) or market) and (ii) 85%
of the net orderly liquidation value percentage identified in the most recent
inventory appraisal determined by an appraiser ordered by the ABL Administrative
Agent multiplied by each wholly-owned Domestic Loan Party’s or European Loan
Party’s, as applicable, eligible inventory (valued at the lower of cost (FIFO)
and market) minus (c) reserves established by the ABL Administrative Agent in
its Permitted Discretion. Notwithstanding the foregoing, if the ABL
Administrative Agent has not received field examinations and inventory
appraisals reasonably satisfactory to it with respect to any accounts receivable
or inventory prior to the Closing Date with respect to the Target, up to (i) 70%
of the eligible accounts receivable of the Target and (ii) 35% of eligible
inventory (valued at the lower of cost (FIFO) or market) of the Target shall be
applied to the foregoing calculation of the Borrowing Base. A field examination
and inventory appraisal shall be completed within ninety (90) days of the
Closing Date (or such longer period as determined by the ABL Administrative
Agent in its discretion). “Permitted Discretion” means a determination made in
good faith and in the exercise of reasonable (from the perspective of a secured
asset based lender similarly situated) credit judgment and consistent with the
Documentation Principles.

 

Eligibility:

  

The definition of eligible accounts receivable and eligible inventory will be
determined by the ABL Administrative Agent in its Permitted Discretion. In
addition, the ABL Administrative Agent will retain the right, from time to time,
in its Permitted Discretion, to establish additional standards of eligibility
and reserves against eligibility and to adjust reserves.

 

Maturity:

  

The ABL Maturity Date.

--------------------------------------------------------------------------------

III.  

Purpose; Certain Payment Provisions

 

Purpose:

  

The proceeds of the ABL Loans shall be used to finance the Transaction Costs
(except for the ABL Loans under the European Sub-Facility) and to finance the
Borrowers’ working capital needs and for general corporate purposes of the
Company and its subsidiaries.

 

Fees and Interest Rates:

  

As set forth on Annex I.

 

Mandatory

Prepayments:

  

The “ABL Credit Documentation” (as defined below) will contain a mandatory
prepayment provision that will require a prepayment of amounts outstanding under
the ABL Facility (without a concurrent reduction of the ABL Commitments) when
there is an availability shortfall.

 

Voluntary

Prepayments:

  

Permitted in whole or in part, with prior written notice but without premium or
penalty, subject to limitations as to minimum amounts of prepayments and
customary indemnification for breakage costs in the case of prepayment of
“Eurodollar Loans” (as defined in Annex I) other than on the last day of a
related interest period.

IV.  

Collateral and Other Credit Support

 

Collateral:

  

The ABL Facility will be secured by substantially all assets of the Loan
Parties, whether consisting of real, personal, tangible or intangible property,
including all of the outstanding equity interests of the Company’s subsidiaries
(collectively, the “Collateral”). The Collateral of the Domestic Loan Parties
will also secure the Term Loan Facility. The liens securing the ABL Facility
will be first priority in the case of “ABL Priority Collateral” (as defined
below) and collateral of the European Loan Parties and second priority in the
case of “Term Priority Collateral” (each as defined below) of the Domestic Loan
Parties.

    

“Term Priority Collateral” means all Collateral of the Domestic Loan Parties
other than ABL Priority Collateral.

    

“ABL Priority Collateral” means all of the Loan Parties’ present and after
acquired cash, accounts receivable, credit card receivables, inventory, deposit
accounts (other than deposit accounts in which net cash proceeds from the sale
of non-ABL Priority Collateral are deposited pending reinvestment), securities
accounts, commodities accounts, instruments, documents, chattel paper, books and
records, and all proceeds relating to the foregoing.

    

The Collateral will also secure bank products (including ACH transactions,
credit card transactions and cash management services) and interest rate swaps,
currency or other hedging obligations owing to any Lender or its affiliates.
Collateral from the European Loan Parties shall only secure the non-U.S.
obligations.

 

Notwithstanding anything to the contrary, the Collateral shall exclude any
“Excluded Asset” (as defined in Exhibit B with respect to the Term Loan
Facility).

--------------------------------------------------------------------------------

 

Intercreditor

Agreement:

  

The lien priority, relative rights and other creditors’ rights issues in respect
of the ABL Facility and the Term Loan Facility will be set forth in a customary
intercreditor agreement (the “Intercreditor Agreement”), which shall be
reasonably satisfactory to the Company, the ABL Administrative Agent and the
“Term Loan Administrative Agent” (as defined in Exhibit B to the Commitment
Letter).

 

Guarantees:

  

Each domestic subsidiary of the Company that guarantees the Term Loan Facility
(the “Domestic Guarantors” and, together with the Company, the “Domestic Loan
Parties”) shall unconditionally guarantee all of the indebtedness, obligations
and liabilities of the Borrowers arising under or in connection with the ABL
Credit Documentation, and the Domestic Loan Parties shall unconditionally
guarantee all obligations in respect of secured bank products (including ACH
transactions, credit card transactions and cash management services) and
interest rate swaps, currency or other hedging obligations owing to any Lender
or its affiliates.

 

In addition, each material direct and indirect European subsidiary of the
Company shall unconditionally guarantee all of the indebtedness, obligations and
liabilities of the European Co-Borrowers (the “European Guarantors” and together
with the Domestic Guarantors, the “Guarantors”; the European Co-Borrowers and
the European Guarantors are collectively referred to herein as the “European
Loan Parties” and together with the Domestic Loan Parties, the “Loan Parties”)
arising under or in connection with the ABL Credit Documentation, and the
European Loan Parties shall unconditionally guarantee, to the extent applicable,
all non-U.S. obligations in respect of secured bank products (including ACH
transactions, credit card transactions and cash management services) and
interest rate swaps, currency or other hedging obligations owing to any Lender
or its affiliates.

 

Notwithstanding the foregoing, no “Excluded Subsidiary” (as defined in Exhibit B
with respect to the Term Loan Facility) shall be required to be a Guarantor of
the ABL Facility and no Borrower shall be an Excluded Subsidiary.

V.  

Certain Conditions

 

Initial Conditions:

  

The availability of the ABL Facility on the Closing Date shall be subject only
to the conditions precedent set forth in Section 6 of the Commitment Letter and
on Exhibit D to the Commitment Letter.

 

On-Going Conditions:

  

After the Closing Date, the making of each extension of credit shall be
conditioned upon (a) the accuracy of all representations and warranties in the
ABL Credit Documentation, (b) there being no default or event of default in
existence at the time of, or after giving effect to the making of, such
extension of credit and (c) after giving effect to the extensions of credit
request, the total extensions of credit under the ABL Facility shall not exceed
the Line Cap (as defined below).1

 

 

1 

Sub-facility mechanics TBD.

--------------------------------------------------------------------------------

VI.  

Certain Documentation Matters

    

The definitive documentation for the ABL Facility (the “ABL Credit
Documentation”) shall (i) be consistent with this Term Sheet and shall contain
those payments, mandatory prepayments, representations, warranties, covenants
and events of default expressly set forth in this Term Sheet, (ii) be
substantially consistent with, and no less favorable to the Borrowers than, the
Existing Credit Agreement, with modifications consistent with the Term Sheet
(including this paragraph) and customary modifications appropriate in view of
the structure and intended use of the ABL Facility (including with respect to
the timing and procedures for funding the ABL Facility on the closing date to
facilitate the closing of the Transactions in accordance with the Purchase
Agreement and such additional provisions relating to the Collateral as are
customary for European asset-based lending facilities and considered in the
reasonable judgment of the ABL Administrative Agent necessary to protect the
security interests of Lenders), (iii) reflect any changes in law or accounting
standards (or in the interpretation thereof) since the date of the Existing
Credit Agreement as reasonably agreed by the Borrowers and the Lead Arrangers,
(iv) be negotiated in good faith to finalize the ABL Credit Documentation,
giving effect to the conditions precedents and limited conditionality provisions
set forth in the Commitment Letter, (v) include modifications as are necessary
to reflect the operational and strategic requirements of the Company and its
subsidiaries (after giving effect to the Transactions) in light of their size,
total assets, geographic locations, industry (and risks and trends associated
therewith), businesses, business practices, operations and projections and
(vi) are otherwise mutually agreed upon by the Borrower and the Lead Arrangers.

 

The ABL Credit Documentation shall contain the following representations,
warranties, covenants and events of default, that will be applicable to the
Company and its restricted subsidiaries (or, in the case of certain customary
representations, warranties and affirmative covenants, all subsidiaries),
customary for financings of this type and subject to exceptions, as appropriate,
to be mutually agreed upon in each case, consistent with the Documentation
Principles:

 

Representations and

Warranties:

  

Financial statements; no material adverse change; existence and standing,
authorization and validity; compliance with law, including, without limitation,
anti-corruption laws relating to bribery or corruption (“Anti-Corruption Laws”)
and economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the (a) U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury or the U.S. Department of State, or (b) the United Nations Security
Council, the European Union, Her Majesty’s Treasury of the United Kingdom or
other relevant sanctions authority (“Sanctions”);

--------------------------------------------------------------------------------

    

corporate power and authority; enforceability of ABL Credit Documentation; no
conflict with law or contractual obligations; no material litigation; no
default; ownership of property; liens; intellectual property; no burdensome
restrictions; taxes; insurance; Federal Reserve regulations; ERISA; Investment
Company Act; subsidiaries; environmental matters; labor matters; accuracy of
disclosure; and no EEA financial institution.

 

Affirmative Covenants:

  

Delivery of quarterly unaudited and annual audited financial statements,
quarterly compliance certificates and annual projections (one (1) year budget)
(within 45/90/90 days or such later date as otherwise permitted by the SEC, if
applicable, for delivery of quarterlies, annuals and projections, respectively),
monthly collateral reporting (including agings and inventory reports) and
monthly Borrowing Base certificates (to be delivered on or prior the 20th day
following the end of a month or 23rd day following the end of any month upon
which a quarter ends; provided, that for the first five (5) months following the
Closing Date, Borrowing Base certificates may be delivered on or prior to the
30th day following the end of the month) and other information requested by the
Administrative Agent (provided that, Borrowing Base certificates with supporting
documentation will be delivered on a weekly basis in the event of a Reporting
Trigger Period (as defined below)); payment of obligations; continuation of
business and maintenance of existence and material rights and privileges;
compliance with laws and material contractual obligations; maintenance of
policies and procedures designed to ensure compliance with Anti-Corruption Laws
and applicable Sanctions; accuracy of information; maintenance of property and
insurance; maintenance of books and records; right of the Lenders to inspect
property and books and records (including periodic field examinations and
inventory appraisals subject to certain limits as set forth below); notices of
defaults, litigation and other material events; compliance with environmental
laws; depository banks; casualty and condemnation; and use of proceeds,
including in compliance with Anti-Corruption Laws and Sanctions.

 

“Adjusted Excess Availability” means Excess Availability plus Qualified
Unrestricted Cash.

 

“Line Cap” means the lesser of (i) the aggregate ABL Commitments and (ii) the
Borrowing Base.

 

“Qualified Unrestricted Cash” means unrestricted cash constituting collateral
that is held in deposit accounts and securities accounts of the Loan Parties
subject to an acceptable control agreement in favor of the Administrative Agent.

 

A “Reporting Trigger Period” shall commence when (i) an event of default has
occurred and is continuing or (ii) Adjusted Excess Availability is less than the
greater of (a) $70 million or 12.5% of the Line Cap for five (5) consecutive
business days. A Reporting Trigger Period shall cease after thirty
(30) consecutive days of (i) no event of default having occurred or continuing
and (ii) Adjusted Excess Availability being greater than the greater of (a)
$70 million or 12.5% of the Line Cap.

--------------------------------------------------------------------------------

 

Financial Covenant:

  

A minimum Fixed Charge Coverage Ratio of 1.00 to 1.00, to be triggered in the
event that Adjusted Excess Availability is less than the greater of (a)
$60 million and (b) 10% of the Line Cap. Requirement to maintain minimum Fixed
Charge Coverage Ratio will cease upon the occurrence of thirty (30) consecutive
days where the Adjusted Excess Availability is equals or exceeds the greater of
(i) $60 million and (ii) 10% of the Line Cap.

 

“Fixed Charge Coverage Ratio” means the ratio of (a) Consolidated EBITDA (to be
defined in a manner consistent with the definition in Exhibit B for the Term
Loan Facility; provided that clause (ix) of such definition shall be subject to
a cap on synergies/operating expenses/cost savings of 25% of Consolidated
EBITDA) minus unfinanced capital expenditures minus taxes to (b) the sum of
interest, principal repayments (made or required to be made), restricted
payments and restricted junior debt payments.

 

Negative Covenants:

   Limitations (subject to exceptions, as appropriate, to be negotiated and
including the specific exceptions set forth herein and otherwise consistent with
the Term Loan Facility, with applicable grower baskets to be based on either an
equivalent percentage of Consolidated EBITDA or consolidated total assets, as
determined by the Company prior to launch of general syndication) on:     

●   indebtedness (including guarantee obligations), including, but not limited
to, exceptions (a) consistent with those set forth in Exhibit B for the Term
Loan Facility with respect to the indebtedness covenant and (b) the incurrence
of the indebtedness under the Term Loan Facility (including any Incremental Term
Loan Facility);

 

●   liens, including, but not limited to, exceptions (a) consistent with those
set forth in Exhibit B for the Term Loan Facility with respect to the lien
covenant and (b) the incurrence of the liens under the Term Loan Facility
(including any Incremental Term Loan Facility);

    

●   sales of assets, including, but not limited to, exceptions for sales and
other dispositions (a) so long as (i) the consideration received from such sale
reflects the fair market value (as reasonably determined in good faith by the
Borrowers) of the asset being sold, (ii) no event of default having occurred or
continuing prior to or after giving effect to such asset sale and
(iii) immediately after giving effect thereto, pro forma Adjusted Excess
Availability (average daily basis for 30 consecutive days) is greater than (x)
12.5% of the Line Cap and (y) $70 million, (b) made in connection with
receivables or factoring agreements consistent with the Target’s past practices
and (c) other usual and customary exceptions consistent with the Documentation
Principles.

--------------------------------------------------------------------------------

    

In the case of any non-ordinary course sales or dispositions of ABL Priority
Collateral with a fair market value greater than $25 million in a single
transaction or series of related transactions, the Borrowers shall deliver an
updated Borrowing Base certificate reflecting such non-ordinary course sale or
disposition;

    

●   payment of restricted payments (including dividends and other payments in
respect of equity interests), including, but not limited to, exceptions for
(a) regularly scheduled dividends (including share repurchases) not to exceed
$175 million per annum, with ability to carry over 25% from prior fiscal year
(on a non-cumulative basis), (b) restricted payments representing officer or
other employee stock repurchases not to exceed $20 million per annum, with
ability to carry over for one fiscal year, (c) tax payments related to vesting
of stock-based awards consistent with past practices of the Company, (d) other
restricted payments up to the greater of (i) $150 million and (ii) an equivalent
grower basket, (e) restricted payments in an unlimited amount subject to (i) no
event of default having occurred or continuing prior to or after giving effect
to such restricted payment and (ii) satisfaction of the Payment Condition (as
defined below) and (f) other usual and customary exceptions consistent with the
Documentation Principles;

    

●   investments (including acquisitions, loans and advances), including, but not
limited to, exceptions for (a) Permitted Acquisitions that meet the Payment
Condition, (b) investments existing on the Closing Date and scheduled, (c) loans
and other advances to employees not to exceed $5 million outstanding at any
time, (d) guarantees of indebtedness permitted under the ABL Credit
Documentation, (e) investments in restricted subsidiaries that are not Loan
Parties up to the greater of (i) $150 million and (ii) an equivalent grower
basket, (f) investments in joint ventures and unrestricted subsidiaries up to
the greater of (i) $100 million and (ii) an equivalent grower basket,
(g) investments in connection with receivables and factoring agreements and
wholesale financing consistent with the Target’s past practices; (h) other
investments up to the greater of (i) $250 million or (ii) equivalent grower
basket, (i) investments in an unlimited amount subject to (i) no event of
default having occurred and continuing prior to or after giving effect to such
investment and (ii) satisfaction of the Payment Condition and (j) other usual
and customary exceptions consistent with the Documentation Principles;

    

●   optional payments and modifications of subordinated and other debt
instruments, including, but not limited to, exceptions for (a) regularly
scheduled payments of principal and interest, (b) refinancing of permitted
junior indebtedness with like indebtedness, (c) payments made with the proceeds
of the issuance of equity, (d) other payments up to the greater of (i)

--------------------------------------------------------------------------------

    

$100 million and (ii) an equivalent grower basket, (e) optional payments and
modifications of subordinated and other debt instruments in an unlimited amount
subject to (i) no event of default having occurred and continuing prior to or
after giving effect to such payment or modification and (ii) satisfaction of the
Payment Condition, (f) payments (including prepayments) with respect to
Continuing External Debt and (g) other usual and customary exceptions consistent
with the Documentation Principles;

    

●   maintenance of Adjusted Excess Availability in an amount, (without
duplication) together with the cash and cash equivalents of Target and its
subsidiaries, in excess of the Continuing External Debt Payoff Amount;

 

●   mergers, consolidations, liquidations and dissolutions;

    

●   sale and leaseback transactions;

    

●   swap agreements;

    

●   transactions with affiliates;

    

●   changes in fiscal year;

    

●   negative pledge clauses and other restrictive agreements; and

    

●   amendment of material documents.

    

“Continuing External Debt Payoff Amount” means, with respect to the Continuing
External Debt for which consent to the repayment thereof is required and such
consent has not been obtained from the lender thereof, the aggregate amount
necessary to repay the principal, interest and any estimated break costs for
such Continuing External Debt, as determined by good faith estimate of the
Company, in consultation with the Lenders.

    

“Payment Condition” means, with respect to any proposed event on any date, a
condition that is satisfied if (a) as of the date of the proposed event and
after giving effect thereto, no default or event of default has occurred and is
continuing, (b) after giving effect to the proposed event as if it occurred on
the first day of the applicable “Pro Forma Period” (as defined below), (i) if
the Fixed Charge Coverage Ratio is greater than or equal to 1.00 to 1.00, then
(w) in the case of a restricted payment, pro forma Adjusted Excess Availability
shall be greater than the greater of $90 million and 15% of the Line Cap at such
time and on an average daily basis during the Pro Forma Period, (x) in the case
of an investment (including a Permitted Acquisition), pro forma Adjusted Excess
Availability shall be greater than the greater of $70 million and 12.5% of the
Line Cap at such time and on an average daily basis during the Pro Forma Period
and (y) in the case of junior debt voluntary prepayments, pro forma Adjusted
Excess Availability shall be greater than the greater of $90 million

--------------------------------------------------------------------------------

    

and 15% of the Line Cap at such time and on an average daily basis during the
Pro Forma Period and (ii) if the Fixed Charge Coverage Ratio (to be defined in a
manner to be agreed) is less than 1.00 to 1.00, then (w) in the case of a
restricted payment, pro forma Adjusted Excess Availability shall be greater than
the greater of $125 million and 20% of the Line Cap at such time and on an
average daily basis during the Pro Forma Period, (x) in the case of an
investment (including a Permitted Acquisition), pro forma Adjusted Excess
Availability shall be greater than the greater of $112.5 million and 17.5% of
the Line Cap at such time and on an average daily basis during the Pro Forma
Period and (y) in the case of junior debt voluntary prepayments, pro forma
Adjusted Excess Availability shall be greater than the greater of $125 million
and 20% of the Line Cap at such time and on an average daily basis during the
Pro Forma Period. The Administrative Agent shall have received a certificate of
an officer of the Parent Borrower certifying as to compliance with the preceding
clauses and demonstrating (in reasonable detail) the calculations required
thereby.

    

Subject to customary limitations, the indebtedness, liens, investments and
restricted payments covenants shall permit the re-classification of amounts
among baskets.

    

“Pro Forma Period” means the period commencing thirty (30) days prior to the
date of any proposed event and ending on the date of such proposed event.

 

Cash Dominion:

  

The Loan Parties will be subject to cash dominion for the life of the ABL
Facility. Funds deposited into any depository account will be swept on a daily
basis into a blocked account with the ABL Administrative Agent (the
“Concentration Account”). Other than during a Cash Dominion Trigger Period (as
defined below), collections which are received into the Concentration Account
shall be deposited into the Company’s operating account. During a Cash Dominion
Trigger Period, collections which are received into the Concentration Account
shall be used to reduce amounts owing under the ABL Facility. A “Cash Dominion
Trigger Period” shall commence when (i) an event of default has occurred and is
continuing or (ii) Adjusted Excess Availability is less than the greater of (a)
$70 million or 12.5% of the Line Cap for five (5) consecutive business days. A
Cash Dominion Trigger Period shall cease after thirty (30) consecutive days of
(i) no event of default having occurred or continuing and (ii) Adjusted Excess
Availability being greater than the greater of (a) $70 million or 12.5% of the
Line Cap.

    

The appropriate documentation, including blocked account and/or lockbox
agreements acceptable to the ABL Administrative Agent, will be required for all
depository accounts of the Loan Parties (subject to certain excluded deposit
accounts of the Loan Parties to be mutually agreed upon).

--------------------------------------------------------------------------------

 

Unrestricted
Subsidiaries:

  

The ABL Credit Documentation will contain provisions pursuant to which, subject
to limitations on loans, advances, guarantees and other investments in
unrestricted subsidiaries, the Borrowers will be permitted to designate any
existing or subsequently acquired or organized subsidiary as an “unrestricted
subsidiary” and subsequently re-designate any such unrestricted subsidiary as a
restricted subsidiary in each case so long as, after giving pro form effect
thereto, no event of default has occurred and is continuing and such designation
as a restricted subsidiary would be permitted as a permitted investment.
Unrestricted subsidiaries will not be subject to the representations and
warranties, affirmative or negative covenant or event of default provisions of
the ABL Credit Documentation and the results of operations and indebtedness of
unrestricted subsidiaries will not be taken into account for purposes of
determining compliance with any financial metric contained in the ABL Credit
Documentation

 

Events of Default:

  

Nonpayment of principal when due; nonpayment of interest, fees or other amounts
after a grace period of five (5) business days; representations and warranties
are incorrect in any material respect; violation of covenants (subject, in the
case of certain affirmative covenants, to a grace period to be agreed upon);
cross-default to occurrence of a default (whether or not resulting in
acceleration) under any other agreement governing indebtedness (other than
Continuing External Debt), in excess of an amount to be agreed upon, of the
Company or any of its subsidiaries; bankruptcy events; certain ERISA events;
material judgments; any of the ABL Credit Documentation shall cease to be in
full force and effect or any Loan Party party thereto shall so assert; any
interests created by the security documents shall cease to be enforceable and of
the same priority purported to be created thereby; and a Change of Control (to
be defined in a manner consistent with such definition in the Term Credit
Documentation).

 

In addition, it shall be an event of default under the ABL Credit Documentation
if the Borrower (or any of its affiliates) fails to comply with the “market
flex” provisions of the Arranger Fee Letter or the marketing or information
provisions of the Commitment Letter (including, without limitation, implementing
amendments to the Credit Documentation to reflect the terms of the “market flex”
provisions of the Arranger Fee Letter).

 

Voting:

  

Amendments, waivers and consents with respect to the ABL Credit Documentation
shall require the approval of Lenders holding not less than a majority of the
commitments under the ABL Facility (provided that if there are only two Lenders,
the approval of both Lenders shall be required), except that (a) the consent of
each Lender directly and adversely affected thereby shall be required with
respect to (i) reductions in the amount or extensions of the scheduled date of
maturity of any loan or reductions in the amount or extensions of the payment
date of any required mandatory payments, (ii) reductions in the rate of interest
or any fee or extensions of any due date thereof and (iii) increases in the
amount or extensions of the expiry date of any Lender’s commitment, (b) the
consent of each Lender shall be required to (i) amend the definition of
Borrowing Base or (ii) change

--------------------------------------------------------------------------------

    

the eligibility criteria applicable to the Borrowing Base to increase
availability thereunder and (c) the consent of each Lender shall be required to
(i) modify the pro rata sharing or collateral waterfall requirements of the ABL
Credit Documentation, (ii) permit any Loan Party to assign its rights under the
ABL Credit Documentation, (iii) modify any of the voting percentages,
(iv) release all or substantially all of the Guarantors or (v) release all or
substantially all of the Collateral.

 

Assignments and

Participations:

  

The Lenders shall be permitted to assign (which shall exclude in all cases
assignments to any Disqualified Lender) all or a portion of their loans and
commitments with the consent, not to be unreasonably withheld, of (a) the
Company (provided that the Company shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the ABL
Administrative Agent within five (5) business days after having received notice
thereof), unless (i) the assignee is a Lender, an affiliate of a Lender or an
approved fund or (ii) an event of default has occurred and is continuing,
(b) the ABL Administrative Agent, (c) the Issuing Lenders and (d) the Swing Line
Lender. In the case of partial assignments (other than to another Lender, to an
affiliate of a Lender or an approved fund), the minimum assignment amount shall
be $5 million, unless otherwise agreed by the Company and the ABL Administrative
Agent. Each assignment shall be subject to the payment of a service fee of
$3,500 to the ABL Administrative Agent by the parties to such assignment.

    

The Lenders shall also be permitted to sell participations in their loans.
Participants shall have customary benefits with respect to yield protection and
increased cost provisions. Voting rights of participants shall be limited to
customary matters. Pledges of loans in accordance with applicable law shall be
permitted without restriction. Each Lender may disclose information to
prospective participants and assignees.

    

“Disqualified Lenders” means (a) entities that are specifically identified by
the Company to the ABL Administrative Agent in writing prior to the date of the
Commitment Letter, or after the date of the Commitment Letter and prior to the
Closing Date with the reasonable consent of the Lead Arrangers, (b) entities
that are competitors of the Company or its subsidiaries (including the Target
and its subsidiaries) and which are specifically identified by the Company to
the ABL Administrative Agent in writing from time to time (“Competitors”) and
(c) in the case of the foregoing clauses (a) and (b), any of such entities’
affiliates to the extent such affiliates (x)(i) are clearly identifiable as
affiliates based solely on the similarity of such affiliates’ names to an entity
set forth on the “Disqualified Lender” list and (ii) are not bona fide debt
investment funds or (y) upon reasonable notice to the ABL Administrative Agent,
are (i) identified as affiliates in writing in a written supplement to the list
of “Disqualified Lenders” and (ii) are not bona fide debt investment funds. Any
supplement to such list shall become effective three (3) business days after
delivery to the ABL

--------------------------------------------------------------------------------

    

Administrative Agent and the Lenders, but which shall not apply retroactively to
disqualify any parties that have (i) previously acquired an assignment or
participation interest in the Loans, (ii) entered into a trade for an assignment
or participation interest in the Loans or (iii) become a competitor of the
Company or its subsidiaries before such entity is added to the “Disqualified
Lender” list, but upon effectiveness of such designation, any such party may not
acquire any additional assignment or participations interests in the Loans;
provided that no supplements shall be made to the “Disqualified Lender” list
from and including the date of the launch of primary syndication of the Credit
Facilities through and including the Syndication Date. The list of Disqualified
Lenders (as updated from time to time) shall be made available to the Lenders
and to potential Lenders and the confidentiality provisions shall not restrict
the foregoing. The register shall be available for inspection by the Company and
Lenders upon request.

 

In no event shall the ABL Administrative Agent be obligated to ascertain,
monitor or inquire as to whether any person is a Disqualified Lender or have any
liability with respect to or arising out of any assignment or participation of
loans or commitments by or disclosure of information by the Lenders, in each
case, to any Disqualified Lender.

 

Yield Protection:

  

The ABL Credit Documentation shall contain customary provisions (a) protecting
the Lenders against increased costs or loss of yield resulting from changes in
reserve, tax, capital adequacy, liquidity and other requirements of law and from
the imposition of or changes in withholding or other taxes and (b) indemnifying
the Lenders for “breakage costs” incurred in connection with, among other
things, any prepayment of a Eurodollar Loan on a day other than the last day of
an interest period with respect thereto. The Dodd-Frank Wall Street Reform and
Consumer Protection Act and Basel III (and all requests, rules, guidelines or
directives relating to each of the foregoing or issued in connection therewith)
shall be deemed to be changes in law after the Closing Date regardless of the
date enacted, adopted or issued.

 

Field Examinations:

  

Field examinations will be conducted at the discretion of the ABL Administrative
Agent to ensure the adequacy of Borrowing Base Collateral and related reporting
and control systems. Notwithstanding the foregoing, no more than one field
examination per year will be conducted; provided that, one additional field
examination may be performed per fiscal year following the occurrence of a
Collateral Audit Trigger Period (as defined below) or otherwise at the expense
of the ABL Administrative Agent; provided further that, there shall be no
limitation on the number or frequency of field examinations at the reasonable
discretion of the ABL Administrative Agent if an event of default shall have
occurred and be continuing.

 

A “Collateral Audit Trigger Period” shall commence upon the Adjusted Excess
Availability being less than the greater of (a) $90 million or 15% of the Line
Cap for five (5) business days.

--------------------------------------------------------------------------------

 

Appraisals:

  

Inventory appraisals will be conducted on an annual basis at the discretion of
the ABL Administrative Agent; provided that, one additional inventory appraisal
may be performed per fiscal year following the occurrence of a Collateral Audit
Trigger Period or otherwise at the expense of the ABL Administrative Agent;
provided further that, there shall be no limitation on the number or frequency
of inventory appraisals at the reasonable discretion of the ABL Administrative
Agent if an event of default shall have occurred and be continuing.

 

Expenses and

Indemnification:

  

The Company shall pay (a) all reasonable and documented out-of-pocket expenses
of the ABL Administrative Agent and the Lead Arrangers and their respective
affiliates associated with the syndication of the ABL Facility and the
preparation, execution, delivery and administration of the ABL Credit
Documentation and any amendment or waiver with respect thereto (including the
reasonable and documented fees, disbursements and other charges of one primary
counsel and one local counsel in each applicable jurisdiction to the
Administrative Agent and the Lead Arrangers and their respective affiliates, in
each case for all such parties taken together), (b) all reasonable and
documented out-of-pocket expenses of the ABL Administrative Agent and the
Lenders (including the reasonable and documented fees, disbursements and other
charges of one primary counsel and one local counsel in each applicable
jurisdiction for the Administrative Agent and the Lenders taken as a whole,
(and, in light of actual or potential conflicts of interest or the availability
of different claims or defenses (as reasonably determined by the affected
party), one additional firm of counsel to each group of similarly affected
parties)) in connection with the enforcement of the ABL Credit Documentation and
(c) fees and expenses associated with collateral monitoring, collateral reviews
and appraisals (including field examination fees, plus out-of-pocket expenses),
environmental reviews and fees and expenses of other advisors and professionals
engaged by the ABL Administrative Agent or the Lead Arrangers or their
respective affiliates.

    

The ABL Administrative Agent, the Lead Arrangers and the Lenders (and their
affiliates and their respective officers, directors, employees, advisors,
representatives and agents) will have no liability for, and will be indemnified
and held harmless against, any loss, liability, cost or expense (including
reasonable and documented legal expenses of (x) one primary counsel and one
local counsel in each applicable jurisdiction, in each case for the indemnified
persons taken as a whole and (y) one additional counsel for each affected
indemnified person in light of actual or potential conflicts of interest or the
availability of different claims or defenses) incurred in respect of the
financing contemplated hereby or the use or the proposed use of proceeds thereof
(except to the extent determined by a court of competent jurisdiction by a final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the indemnified party).

--------------------------------------------------------------------------------

 

Defaulting Lenders:

  

The ABL Credit Documentation will contain the ABL Administrative Agent’s
customary provisions in respect of defaulting lenders.

 

EU Bail-In:

  

The ABL Credit Documentation will contain the ABL Administrative Agent’s
customary provisions in respect of EU “Bail-In” matters.

 

Governing Law and

Forum:

  

State of New York.

 

Counsel to the ABL

Administrative Agent

and the Lead

Arrangers:

  

Simpson Thacher & Bartlett LLP.

--------------------------------------------------------------------------------

Annex I to Exhibit C

Interest and Certain Fees

 

Interest Rate Options:

  

The Company may elect that the loans comprising each borrowing bear interest at
a rate per annum equal to (a) in the case of U.S. dollar loans, the Alternate
Base Rate (such loans herein referred to as “ABR Loans”) plus the Applicable
Margin, (b) in the case of U.S. dollars loans or British Pounds Sterling loans,
the Adjusted LIBO Rate (such loans herein referred to as “Eurodollar Loans”)
plus the Applicable Margin or (c) in the case of loans denominated in Euros, the
EURIBOR (such loans described in clauses (b) and (c) herein are referred to as
“Eurodollar Loans”) plus the Applicable Margin.; provided, that all Swing Line
Loans shall bear interest at a rate per annum equal to the ABR plus the
Applicable Margin; provided further that loans denominated in euro may only bear
interest at the Adjusted LIBO Rate.

  

As used herein:

 

“Applicable Margin” means a percentage determined in accordance with the pricing
grid attached hereto as Annex I-A.

  

“Alternate Base Rate” or “ABR” means the highest of (i) the “U.S. Prime Lending
Rate” published by The Wall Street Journal (the “Prime Rate”), (ii) the NYFRB
Rate from time to time plus 0.5% and (iii) the Adjusted LIBO Rate for a one
month interest period plus 1%.

  

“Adjusted LIBO Rate” means the LIBO Rate, as adjusted for statutory reserve
requirements for eurocurrency liabilities.

 

“EURIBOR” means the rate per annum (adjusted for statutory reserve requirements
for euro liabilities) equal to (a) the offered rate per annum for euro deposits
appearing on Reuters Page EURIBOR01 (or any successor or substitute page which
displays an average determined by the European Banking Federation) (the “EURIBOR
Screen Rate”) as of 11:00 a.m., Brussels time, two business days prior to the
beginning of such Interest Period or (b) if the EURIBOR Screen Rate shall not be
available at such time for such interest period with respect to Euros, then the
EURIBOR Rate shall be customary interpolated rate; provided that if the EURIBOR
as so determined would be less than zero, such rate shall be deemed to be zero
for the purposes of calculating such rate.

  

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any interest
period for the applicable currency, the LIBO Screen Rate at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such interest
period for such currency; provided that if the LIBO Screen Rate shall not be
available at such time for such interest period (an “Impacted Interest Period”)
then the LIBO Rate shall be a customary interpolated rate (which in no event
shall be less than zero).

--------------------------------------------------------------------------------

  

“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any interest period for an applicable currency, the London
interbank offered rate as administered by ICE Benchmark Administration (or any
other Person that takes over the administration of such rate for such currency)
for a period equal in length to such interest period and for such currency as
displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion); provided that if the LIBO Screen Rate as so determined would be
less than zero, such rate shall be deemed to zero for the purposes of
calculating such rate.

 

“NYFRB Rate” means, for any day, the greater of (a) the federal funds effective
rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day; provided, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to zero for the purposes of calculating such rate.

 

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar Borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time,
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).

 

The Credit Documentation will contain provisions to be mutually agreed with
respect to a replacement of the LIBO Rate.

Interest Payment Dates:

  

In the case of ABR Loans, interest shall be payable on the first day of each
quarter, upon any prepayment due to acceleration and at final maturity.

  

In the case of Eurodollar Loans, interest shall be payable in arrears on the
last day of each interest period and, in the case of an interest period longer
than three months, quarterly, upon any prepayment and at final maturity.

Commitment Fees:

  

A commitment fee equal to 0.25% per annum, payable quarterly in arrears to the
ABL Administrative Agent for the ratable benefit of the Lenders (including the
ABL Administrative Agent) from the Closing Date until termination of the ABL
Commitments.

--------------------------------------------------------------------------------

Letter of Credit Fees:

  

Letter of Credit: A letter of credit fee, equal to the Applicable Margin for
Eurodollar Loans, on the daily maximum amount to be drawn under all Letters of
Credit, payable quarterly in arrears to the ABL Administrative Agent for the
ratable benefit of the Lenders (including the Issuing Lender).

  

Fronting Fee: A fronting fee equal to a rate per annum separately agreed upon by
the Borrower and the Issuing Lender of the face amount of each Letter of Credit
issued shall be payable to the Issuing Lender, together with any documentary and
processing charges in accordance with the Issuing Lender’s standard schedule for
such charges with respect to the issuance, amendment, cancellation, negotiation,
transfer, presentment, renewal or extension of each letter of credit and each
drawing made thereunder. Notwithstanding the foregoing, no such fronting fee
shall be payable if there is only one (1) Lender under the ABL Facility.

Default Rate:

  

After default, the applicable interest rate and Letter of Credit Fee will be
increased by 2% per annum (and new Eurodollar Loans may be suspended). Overdue
interest, fees and other amounts shall bear interest at 2% above the rate
applicable to ABR Loans.

Rate and Fee Basis:

  

All per annum rates shall be calculated on the basis of a year of 360 days (or
365/366 days, in the case of ABR Loans) for actual days elapsed.

--------------------------------------------------------------------------------

Annex I-A to Exhibit C

Pricing Grid

 

Adjusted Excess

Availability

     

Applicable Margin for Eurocurrency Loans (USD and

GBP)

   Applicable Margin for Eurocurrency Loans (EUR)   

Applicable Margin

for ABR Loans

> 50% of the amount of the ABL Facility

      1.25%    1.25%    0.25%

£ 50% of the amount of the ABL Facility but > 25% of the amount of the ABL
Facility

      1.50%    1.50%    0.50%

£ 25% of the amount of the ABL Facility

      1.75%    1.75%    0.75%

The applicable margins shall be determined in accordance with the foregoing
table based on the Company’s most recent Borrowing Base Certificate.
Adjustments, if any, to the applicable margins shall be made on a fiscal
quarterly basis and shall be effective five (5) business days after the ABL
Administrative Agent has received the applicable Borrowing Base Certificate. If
the Company fails to deliver the Borrowing Base Certificate to the ABL
Administrative Agent at the time required pursuant to the ABL Credit
Documentation, then the applicable margins shall be the highest applicable
margins and fees set forth in the foregoing table until five (5) days after such
Borrowing Base Certificate is so delivered.

--------------------------------------------------------------------------------

Exhibit D

PROJECT VISION

Conditions

The availability and initial funding of the Credit Facilities shall be subject
to the satisfaction (or waiver by the Commitment Parties) of solely the
following conditions (subject to the Limited Conditionality Provision).
Capitalized terms used but not defined herein have the meanings set forth in the
Commitment Letter to which this Exhibit D is attached and in Exhibits A, B and C
thereto.

1.        Each Loan Party thereto shall have executed and delivered the Credit
Documentation on terms consistent with the Commitment Letter, and the
Administrative Agents shall have received:

 

  a.

customary closing certificates, corporate and organizational documents, good
standing certificates and customary legal opinions; and

 

  b.

a certificate from the chief financial officer of the Company, in the form
attached as Annex I to this Exhibit D, certifying that the Company and its
subsidiaries, on a consolidated basis after giving effect to the Transactions
and the other transactions contemplated hereby, are solvent.

2.        Substantially concurrently with the initial funding of the Credit
Facilities, the Refinancing shall have been consummated, after giving effect to
the Transactions, neither the Company nor any of its subsidiaries (including,
for the avoidance of doubt, the Target and its subsidiaries) shall have any
indebtedness for borrowed money other than the Credit Facilities, Permitted
Surviving Debt and certain other indebtedness to be mutually agreed upon and the
Equity Contribution shall have been consummated. The Administrative Agents shall
have received reasonably satisfactory evidence of repayment of all indebtedness
to be repaid on the Closing Date and the discharge (or the making of
arrangements for discharge) of all related guarantees and liens. “Permitted
Surviving Debt” shall mean (i) ordinary course purchase money, capital lease,
equipment and similar financings, (ii) with respect to the Target and its
subsidiaries, any indebtedness permitted by the Purchase Agreement to remain
outstanding following the Closing Date, (iii) intercompany debt among the
Company and its subsidiaries or among the Target and its subsidiaries and
(iv) any other financing agreed by the Lead Arrangers, such agreement not to be
unreasonably withheld, conditioned or delayed.

3.        The Acquisition shall, substantially concurrently with the initial
funding of the Credit Facilities, be consummated pursuant to the Purchase
Agreement and no provision thereof shall have been amended, modified or waived,
and no consent or request shall have been given under the Purchase Agreement, in
any way that is materially adverse to the Lenders in their capacities as such
without consent of the Lead Arrangers (such consent not to be unreasonably
withheld, conditioned or delayed (it being understood and agreed that any
modification, amendment, waiver, request or consents by you that results in
(x) an increase to the purchase price shall be deemed to not be materially
adverse to the Lenders so long as such increase is funded solely with an
issuance of common equity of the Company or other equity reasonably acceptable
to the Lead Arrangers, and (y) a decrease to the purchase price shall be deemed
to not be materially adverse to the Lenders so long as (I) such reduction is
allocated to reduce the commitments under the Term Loan Facility and (II) such
reduction (other than pursuant to any purchase price or similar adjustment
provision set forth in the Purchase Agreement) does not decrease the purchase
price by more than ten percent (10%) (cumulative for all such reductions))
without the prior written consent of the Commitment Parties (not to be
unreasonably withheld, conditioned or delayed).

 

D-1

--------------------------------------------------------------------------------

4.        The closing and effectiveness of, and initial funding under, the
Credit Facilities shall have occurred on or before the Expiration Date.

5.        The Commitment Parties shall have received (a) audited consolidated
balance sheets and related statements of income, stockholders’ equity and cash
flows of the (x) Company and its subsidiaries and (y) each Target and its
respective subsidiaries, in each case, for the two most recently completed
fiscal years ended at least ninety (90) days before the Closing Date, and
(b) unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the (x) Company and its subsidiaries and
(y) each Target and its respective subsidiaries, in each case, for each
subsequent fiscal quarter ended at least forty-five (45) days before the Closing
Date. Each Commitment Party hereby acknowledges receipt of (i) the audited
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of the Company and its subsidiaries for the fiscal years
ended July 31, 2016 and July 31, 2017 and each Target and its respective
subsidiaries for the fiscal years ended August 31, 2016 and August 31, 2017, and
(ii) the unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the Company and its subsidiaries for the
fiscal quarters ended January 31, 2018 and April 30, 2018 and each Target and
its respective subsidiaries for the fiscal period ended May 31, 2018.

6.        Each Commitment Party shall have received a pro forma consolidated
balance sheet and related pro forma consolidated statement of income of the
Company and its subsidiaries 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 forty (45) days prior to the Closing Date (or, in the case of the four
fiscal quarter period ended on the last day of the fiscal year of the Company,
ended at least ninety (90) days prior to the Closing Date), prepared after
giving effect to the Transactions (including the acquisition of the Target) as
if the Transactions had occurred as of such date (in the case of such balance
sheet) or at the beginning of such period (in the case of such statement of
income).

7.        Each of the Specified Representations shall be true and correct in all
material respects (and in all respects if qualified by material adverse effect
or other materiality qualifier).

8.        The Administrative Agents shall have received, at least three
(3) business days prior to the Closing Date to the extent requested at least ten
(10) days prior to the Closing Date, all documentation and other information
required by U.S. regulatory authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including the PATRIOT Act.

9.        All fees and expenses due and payable to the Commitment Parties and
the Lenders and required to be paid on or prior to the Closing Date shall have
been paid or shall have been authorized to be deducted from the proceeds of the
initial fundings under the Credit Facilities so long as any such fees or
expenses not expressly set forth in the Fee Letters have been invoiced not less
than two (2) business days prior to the Closing Date (except as otherwise
reasonably agreed by the Company).

10.      Subject to the Limited Conditionality Provision, all actions necessary
to establish that the applicable Administrative Agent will have a perfected
security interest (subject to liens permitted under the Credit Documentation) in
the Collateral shall have been taken.

11.      In no event shall the Closing Date occur on any date prior to
November 1, 2018.

12.      With respect to the ABL Facility, the ABL Administrative Agent shall
have received a Borrowing Base certificate (other than with respect to the
Target and its subsidiaries) in form consistent with that agreed upon in the
Credit Documentation prepared as of the last day of the most recent month ending
at least thirty (30) calendar days prior to the Closing Date.

 

D-2

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Annex I to Exhibit D

FORM OF SOLVENCY CERTIFICATE

[            ], 20[    ]

This Solvency Certificate is being executed and delivered pursuant to Section
[    ] of the Credit Agreement (the “Credit Agreement”), dated as of
[                ], 20[    ], among Thor Industries, Inc. (the “Company”), the
other Loan Parties party thereto from time to time, the lenders party thereto
from time to time and JPMorgan Chase Bank, N.A., as the administrative agent;
the terms defined therein being used herein as therein defined.

I, [                    ] the chief financial officer of the Company, solely in
such capacity and not in an individual capacity, hereby certify that I am the
chief financial officer of the Company and that I am generally familiar with the
businesses and assets of the Company and its Subsidiaries (taken as a whole), I
have made such other investigations and inquiries as I have deemed appropriate
and I am duly authorized to execute this Solvency Certificate on behalf of the
Company pursuant to the Credit Agreement.

I further certify, solely in my capacity as chief financial officer of the
Company, and not in my individual capacity, as of the date hereof and after
giving effect to the Transactions and the incurrence of the indebtedness and
obligations being incurred in connection with the Credit Agreement and the
Transactions on the date hereof, that, with respect to the Company and its
Subsidiaries on a consolidated basis, (a) the sum of the liabilities of the
Company and its Subsidiaries, taken as a whole, does not exceed the present fair
saleable value of the assets of the Company and its Subsidiaries, taken as a
whole; (b) the capital of the Company and its Subsidiaries, taken as a whole, is
not unreasonably small in relation to the business of the Company and its
Subsidiaries, taken as a whole, on the date hereof, and (c) the Company and its
Subsidiaries, taken as a whole, do not intend to incur, or believe that they
will incur, debts including current obligations beyond their ability to pay such
debt as they mature in the ordinary course of business. For the purposes hereof,
the amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual
or matured liability (irrespective of whether such contingent liabilities meet
the criteria for accrual under Statement of Financial Accounting Standard
No. 5).

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IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first
written above.

 

By:                                                                      

Name:

 

Title: Chief Financial Officer