EXHIBIT 10.2

 

 

REAL ALLOY HOLDING, INC.

 

 

$85,000,000

 

 

Senior Secured Super-Priority Debtor-in-Possession Senior Notes

 

 

______________

 

Senior Secured Super-Priority Debtor-In-Possession Note Purchase Agreement

 

______________

 

 

Dated November 21, 2017

 

 

 

 

 

 

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Table of Contents

 

Page

SECTION 1.    AUTHORIZATION OF NOTES.

1

SECTION 2.    SALE AND PURCHASE OF NOTES.

1

SECTION 3.    CLOSING; PROCEEDS ACCOUNT.

3

Section 3.1. Closing

3

Section 3.2. Proceeds Account

3

Section 3.3. Interest

4

SECTION 4.    CONDITIONS TO CLOSING.

4

Section 4.1. Representations and Warranties

4

Section 4.2. No Default

5

Section 4.3. Compliance Certificates.

5

Section 4.4. [Intentionally Deleted].

5

Section 4.5. Purchase Permitted By Applicable Law, Etc.

5

Section 4.6. Sale of Other Notes

5

Section 4.7. Consent

5

Section 4.8. Issuance of Notes

5

Section 4.9. Changes in Corporate Structure

5

Section 4.10. Funding Instructions

5

Section 4.11. Proceedings and Documents

6

Section 4.12. Closing Documents

6

Section 4.13. Chapter 11 Cases

6

Section 4.14. Budget

7

Section 4.15. Security

7

Section 4.16. Know Your Customer Requirements

7

Section 4.17. General Fees and Expenses

7

Section 4.18. Purchaser Closing Fees

7

Section 4.19. Backstop Fee

7

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

8

Section 5.1. Corporate Existence and Power

8

Section 5.2. Corporate Authorization; No Contravention

8

Section 5.3. Governmental Authorization

8

Section 5.4. Binding Effect

9

Section 5.5. Litigation

9

Section 5.6. No Default

9

Section 5.7. Pension Plan; ERISA Compliance

9

Section 5.8. [Reserved]

10

Section 5.9. Ownership of Property; Liens

10

Section 5.10. Taxes

11

Section 5.11. Financial Condition

11

Section 5.12. Environmental Matters

12

Section 5.13. Regulated Entities

12

Section 5.14. [Reserved]

12

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Section 5.15. Labor Relations

12

Section 5.16. Intellectual Property

13

Section 5.17. Brokers’ Fees; Transaction Fees

13

Section 5.18. Insurance

13

Section 5.19. Ventures, Subsidiaries and Affiliates; Outstanding Stock

14

Section 5.20. Jurisdiction of Organization; Chief Executive Office

14

Section 5.21. Locations of Inventory, Equipment and Books and Records

14

Section 5.22. Deposit Accounts and Other Accounts

14

Section 5.23. Government Contracts

15

Section 5.24. Customer and Trade Relations

15

Section 5.25. Bonding

15

Section 5.26. Full Disclosure

15

Section 5.27. Foreign Assets Control Regulations and Anti-Money Laundering

15

Section 5.28. Patriot Act; Counter-Terrorism Regulations

16

Section 5.29. Physical Condition of Owned Properties

16

Section 5.30. Access

16

Section 5.31. DIP Order Notices

17

Section 5.32. Superpriority Administrative Expense Claims

17

Section 5.33. DIP Liens

17

Section 5.34. DIP Order Modifications

17

Section 5.35. Private Offering by the Company

17

Section 5.36. Use of Proceeds; Margin Regulations

17

SECTION 6.    REPRESENTATIONS OF THE PURCHASERS.

18

Section 6.1. Purchase for Investment

18

Section 6.2. Source of Funds

18

SECTION 7.    [INTENTIONALLY OMITTED]

19

SECTION 8.    PAYMENT AND PREPAYMENT OF THE NOTES.

19

Section 8.1. Maturity

19

Section 8.2. Optional Prepayments

19

Section 8.3. Mandatory Prepayments

20

Section 8.4. Allocation of Partial Prepayments

20

Section 8.5. Maturity; Surrender, Etc.

20

Section 8.6. Purchase of Notes

20

Section 8.7. Payments Due on Non-Business Days

21

SECTION 9.    AFFIRMATIVE COVENANTS.

21

Section 9.1. Financial Statements

21

Section 9.2. Certificates; Other Information

22

Section 9.3. Notices

23

Section 9.4. Preservation of Corporate Existence, Etc.

25

Section 9.5. Maintenance of Property

25

Section 9.6. Insurance.

25

Section 9.7. Payment of Obligations

27

Section 9.8. Compliance with Laws; Pension Plans and Benefit Plans

27

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Section 9.9. Inspection of Property and Books and Records; Audits; Appraisals

27

Section 9.10. Use of Proceeds

28

Section 9.11. Cash Management Systems

28

Section 9.12. Further Assurances

28

Section 9.13. [Reserved]

29

Section 9.14. Environmental Matters

29

Section 9.15. Approved DIP Budget

29

Section 9.16. Case Milestones

29

Section 9.17. DIP Notices, Pleadings and Motions

29

Section 9.18. [Reserved]

30

Section 9.19. Ordinary Course

30

SECTION 10.    NEGATIVE COVENANTS.

30

Section 10.1. Limitation on Liens

30

Section 10.2. Disposition of Assets

33

Section 10.3. Consolidations, Mergers and Amalgamations

34

Section 10.4. Acquisitions; Loans and Investments

34

Section 10.5. Limitation on Indebtedness

35

Section 10.6. Employee Loans and Transactions with Affiliates

36

Section 10.7. Management Fees and Compensation

36

Section 10.8. Margin Stock; Use of Proceeds

37

Section 10.9. Contingent Obligations

37

Section 10.10. Compliance with ERISA, Pension and Benefits Plans

38

Section 10.11. Restricted Payments

38

Section 10.12. Change in Business

39

Section 10.13. Change in Structure

39

Section 10.14. Changes in Accounting, Name or Jurisdiction of Organization

39

Section 10.15. Amendments to Related Agreements

39

Section 10.16. No Negative Pledges

40

Section 10.17. OFAC; Patriot Act; Anti-Money Laundering

41

Section 10.18. Sale-Leasebacks

41

Section 10.19. Hazardous Materials

41

Section 10.20. Prepayments of Other Indebtedness

41

Section 10.21. Use of Proceeds; Compliance with Approved DIP Budget

41

Section 10.22. Ordinary Course

42

Section 10.23. Key Employees

42

Section 10.24. Chief Restructuring Officer

42

Section 10.25. DIP Order

42

SECTION 11.    EVENTS OF DEFAULT.

43

Section 11.1. Events of Default

43

SECTION 12.    REMEDIES ON DEFAULT, ETC.

48

Section 12.1. Acceleration

48

Section 12.2. Other Remedies

49

Section 12.3. Rescission

49

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.

50

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Section 12.5. Default Rate

50

Section 12.6. Application of Mandatory Prepayments and Collateral Proceeds

50

Section 12.7. Hearing on Event of Default

50

SECTION 13.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; ASSIGNMENTS; AND
VOTING.

50

Section 13.1. Registration of Notes

50

Section 13.2. Transfer and Exchange of Notes; Assignment of Commitments

51

Section 13.3. Replacement of Notes

51

Section 13.4. Voting

52

Section 13.5. Collateral Trustee

52

SECTION 14.    PAYMENTS ON NOTES

52

Section 14.1. [Reserved]

52

Section 14.2. Payment by Wire Transfer

52

Section 14.3. FATCA Information

53

SECTION 15.    EXPENSES, ETC.

53

Section 15.1. Transaction Expenses and Indemnities

53

Section 15.2. Certain Taxes

54

Section 15.3. Survival

54

SECTION 16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

54

SECTION 17.    AMENDMENT AND WAIVER

55

Section 17.1. Requirements

55

Section 17.2. Solicitation of Holders of Notes

55

Section 17.3. Binding Effect, Etc.

56

Section 17.4. Notes Held by Company, Etc.

56

SECTION 18.    NOTICES

56

SECTION 19.    REPRODUCTION OF DOCUMENTS

57

SECTION 20.    CONFIDENTIAL INFORMATION

57

SECTION 21.    SUBSTITUTION OF PURCHASER

58

SECTION 22.    MISCELLANEOUS

58

Section 22.1. Successors and Assigns

59

Section 22.2. Accounting Terms

59

Section 22.3. Severability

59

Section 22.4. Construction, Etc.

59

Section 22.5. Counterparts

60

Section 22.6. Governing Law

60

Section 22.7. Jurisdiction and Process; Waiver of Jury Trial

60

Section 22.8. Conflict

61

Section 22.9. Guarantee and Security Grant

61

 

 

 

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SCHEDULES:

Schedule A

—

Defined Terms

 

 

 

Schedule  1

—

Form of Senior Secured Notes

 

 

 

Schedule 4.12

—

Closing Checklist

 

 

 

Schedule 5.5

—

Litigation

 

 

 

Schedule 5.7

—

ERISA Matters

 

 

 

Schedule 5.9

—

Real Estate

 

 

 

Schedule 5.15

—

Labor Relations

 

 

 

Schedule 5.16

—

Intellectual Property

 

 

 

Schedule 5.18

—

Insurance

 

 

 

Schedule 5.19

—

Subsidiaries

 

 

 

Schedule 5.20

—

Jurisdiction of Organization, Etc.

 

 

 

Schedule 5.21

—

Location of Assets

 

 

 

Schedule 5.22

—

Accounts

 

 

 

Schedule 5.23

—

Government Contracts

 

 

 

Schedule 5.24

—

Customer and Trade Relations

 

 

 

Schedule 5.25

—

Bonding

 

 

 

Schedule 9.1(b)

—

Compliance Certificate

 

 

 

Schedule 10.1

—

Permitted Liens

 

 

 

Schedule 10.4

—

Investments

 

 

 

Schedule 10.5

—

Indebtedness

 

 

 

Schedule 10.9

—

Contingent Obligations

 

 

 

Schedule 13.2

—

Form of Joinder Agreement

 

 

 

Purchaser Schedule

—

Information Relating to Purchasers 

 

 

 

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REAL ALLOY HOLDING, INC.

25825 Science Park Drive, Suite 400

Beachwood, Ohio 44122

 

Senior Secured Super-Priority Debtor-in-Possession Senior Notes

 

 

November 21, 2017

 

 

To Each of the Purchasers Listed in

the Purchaser Schedule Hereto:

Ladies and Gentlemen:

Real Alloy Holding, Inc., a Delaware corporation (the “Company”), agrees with
each of the Purchasers as follows:

PRELIMINARY STATEMENTS

The Company, Real Alloy Intermediate Holdings, LLC (“Intermediate Holding”) and
certain direct and indirect subsidiaries of the Company have commenced the
Chapter 11 Cases in the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”), and have retained possession of their
respective assets and are authorized under the Bankruptcy Code to continue the
operation of their businesses as debtors-in-possession.

Subject to the terms and conditions set forth in this Agreement, including
without limitation, the entry by the Bankruptcy Court of the DIP Order, the
Company will issue and sell to each Purchaser and each Purchaser will purchase
from the Company, Notes in accordance with the terms of this Agreement, the
obligations under which are secured by substantially all the assets and
properties of the Company, Intermediate Holdings and certain direct and indirect
subsidiaries of the Company as more fully described in the DIP Order and the
Note Purchase Documents.

Certain capitalized and other terms used in this Agreement are defined in
Schedule A and, for purposes of this Agreement, the rules of construction set
forth in Section 22.4 shall govern.

SECTION 1.AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of up to $85,000,000 aggregate
principal amount of its 11.5% Senior Secured Super-Priority Debtor-in-Possession
Notes due on the Maturity Date (the “Notes”).  The Notes shall be substantially
in the form set out in Schedule 1.  The Notes issued pursuant hereto constitute
the “New Money DIP Notes” (as defined in the Interim DIP Order) and shall be
afforded the rights and protections set forth in the DIP Order.    

SECTION 2.SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, on each Note Purchase
Date specified in a Note Purchase Request made in accordance with Section 4.10,
the Company will

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issue and sell to each Purchaser and each Purchaser will purchase from the
Company, Notes in the principal amount specified in such Note Purchase Request
and each Purchaser shall pay an amount equal to its Commitment Percentage of
such principal amount of Notes in accordance with Section 3 hereof.  Each sale
and purchase by a Purchaser of Notes shall be deemed to have occurred under such
Purchaser’s Commitment reflected in its Purchaser Schedule and shall be further
evidenced by its Note in the amount of its Commitment, without any requirement
that additional Notes be issued.  The Purchasers’ obligations hereunder are
several and not joint obligations, and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.  The initial Note Purchase Request shall be made after
entry of the Interim DIP Order in a principal amount not to exceed $40,000,000;
provided additional Note Purchase Requests up to an aggregate amount not to
exceed an additional $10,000,000 (in minimum amount of $5,000,000) may be made
prior to the entry of the Final DIP Order so long as (a) the Required Holders
have provided their prior written consent to any such increase or increases,
which consent may be provided or withheld in their sole discretion and (b) the
proceeds of such additional $10,000,000 Notes are used solely for the working
capital needs of the Foreign Subsidiaries through intercompany loans from the
Company to the extent provided in the most recent Approved DIP Budget and
otherwise subject to the terms and conditions of the Note Purchase Documents and
the DIP Order.  

Any subsequent Note Purchase Request shall be made after entry of the Final DIP
Order in minimum amount of $5,000,000 and increments over such amount of
$1,000,000; provided, that (a) the Company shall issue not more than nine (9)
separate Note Purchase Requests from and after the closing Date, (b) no such
Note Purchase Request may be issued after the Commitment Termination Date and on
such Commitment Termination Date all unused Commitments of the Purchasers to
purchase Notes hereunder shall be terminated and (c) the aggregate principal
amount of Notes purchased under this Agreement at any time shall not exceed the
sum of (i) lesser of (x) $65,000,000 and (y) the maximum amount permitted by the
DIP Order to be purchased at such time (and except as otherwise expressly
provided in the DIP Order and the Approved DIP Budget, the proceeds of the Notes
issued pursuant this portion of the Final Commitments may only be used by the
Company and the Guarantors who are subject to the Chapter 11 Cases and solely
for the purposes, and subject to the limitations, set forth in the Note Purchase
Documents, the DIP Order and the Approved DIP Budget), and (ii) up to an
additional $20,000,000, so long as (A) the Required Holders have provided their
prior written consent to any such increase or increases, which consent may be
provided or withheld in their sole discretion and (B) the proceeds of such
additional Notes are used solely for the working capital needs of the Foreign
Subsidiaries through intercompany loans from the Company to the extent provided
in the most recent Approved DIP Budget and otherwise subject to the terms and
conditions of the Note Purchase Documents and the DIP Order.  No Purchaser shall
be obligated to make a purchase of Notes if after giving effect thereto, the
aggregate amount of Note purchases made by such Purchaser would exceed its
Commitment then in effect.  To the extent the Final DIP Order provides for
aggregate Commitments under this Agreement of less than $85,000,000, then each
Purchaser’s Commitment shall be ratably reduced and at the request of any
Purchaser, a new Note reflecting such Purchaser’s adjusted Commitment will
promptly be issued by the Company to such Purchaser in replacement for its
existing Note.

As provided in the Interim DIP Orders, Prepetition Notes Holders who do not
execute and deliver this Agreement on the date hereof and who satisfy the
representations and warranties set

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forth in Section 6 will be afforded the opportunity, pursuant to procedures
acceptable to the Required Holders, to become Purchasers hereunder for
Commitments and outstanding Notes up to their respective percentages of the
outstanding principal balance of Prepetition Notes they hold as of November 20,
2017 or the date of the closing of the sale of additional Notes and Commitments
to the Subsequent Purchasers, whichever percentage is lower, and to the extent
any such Prepetition Notes Holder makes such an election (each a “Subsequent
Purchaser”) (provided that, as to any transfers of Prepetition Notes by holders
of Prepetition Notes that are also Backstop Parties between the Petition Date
and November 20, 2017, the right to participate and purchase Notes as part of
such syndication shall be determined by agreement between such purchaser and
such seller), (a) the Company agrees to issue and sell additional amounts under
the Notes and Commitments (without regard to the conditions precedent or minimum
amounts set forth in this Agreement) in such amounts as the Required Holders
shall require, the proceeds of which shall be used to immediately prepay the
Notes of the existing Holders on a ratable basis and (b) the Commitments of the
Purchasers who executed and delivered this Agreement on the date hereof will be
deemed ratably reduced and assigned to the Subsequent Purchasers, in each case
in such manner to ensure that all Purchasers hold Commitments and outstanding
amounts under the Notes ratably (the foregoing, the “DIP Notes Syndication”). 

SECTION 3.CLOSING; PROCEEDS ACCOUNT.

Section 3.1.  Closing.  On each Note Purchase Date, (each, a “Closing”), subject
to the conditions set forth in Section 4, each Purchaser shall make a purchase
in the amount of its Commitment Percentage of the principal amount requested in
the applicable Note Purchase Request by delivery to the Proceeds Account of
immediately available funds in such amount by wire transfer of immediately
available funds to account number ########## at Wintrust Bank, 190 South LaSalle
Street, Chicago, IL 60603, Beneficiary: Real Alloy Recycling, Inc., Transit
Routing Number: ######### (for international wires, include SWIFT Code:
########), subject to the initial proviso in Section 3.2.  If at each Closing,
any of the conditions specified in Section 4 shall not have been fulfilled to
the satisfaction of the Required Holders, such Purchaser shall, at its election,
be relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of any of the conditions
specified in Section 4 not having been fulfilled to the Required Holders’
satisfaction. 

 

Section 3.2.  Proceeds Account.  The purchase price for all Notes shall be
deposited into the Proceeds Account pursuant to Section 3.1; provided, that
$35,000,000 in proceeds from the initial sale of the Notes shall be directed to
the Company’s disbursement account (pursuant to wire instructions provided to
the Purchasers) and/or to pay down the ABL DIP Facility and otherwise used in
accordance with Section 9.10.   The Company may withdraw amounts from the
Proceeds Account in minimum increments of $500,000 solely to pay expenses and
other amounts permitted to be paid pursuant to the Approved DIP Budget for the
next seven (7) days (subject to any permitted variance in the DIP Order) from
the  time of such withdrawal so long as (a) Purchasers have received an
Officer’s Certificate (x) specifying the amount of the requested withdrawal at
least on the later of the date on which the Interim DIP Order is entered and the
second (2nd) Business Day prior to the proposed withdrawal, (y) certifying that
the funds to be withdrawn shall be used only to pay expenses and other amounts
pursuant to a schedule setting forth the disbursements to be funded from the
funds to be withdrawn, which disbursements shall be due or become due during the
seven (7) calendar days following such withdrawal and (z)

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certifying as to the matters in the following clauses (b) through (d), (b) the
ABL DIP Facility is fully drawn as of the date of the withdrawal request, (c)
before and after giving effect to the requested withdrawal, no Default or Event
of Default shall have occurred and be continuing, (d) the representations and
warranties of the Company and the Guarantors in this Agreement and the other
Note Purchase Documents shall be correct in all material respects (or in all
respects in the case of any such representations and warranties qualified by
materiality) as of such date, except for representations and warranties
expressly stated to relate to a specific earlier date, in which case such
representations and warranties were correct in all material respects as of such
earlier date and (e) the Holders have received a schedule setting forth the
disbursements to be funded from the funds to be withdrawn, which disbursements
shall be due or become due during the seven (7) calendar days following such
withdrawal.  Except as permitted by the DIP Order, the Company shall not be
permitted to withdraw amounts from the Proceeds Account after delivery of a
notice from the Required Holders that such withdrawals will not be permitted,
which may only be provided after the occurrence and during the continuation of
an Event of Default.    Upon consummation of a Sale, all amounts in the Proceeds
Account shall be applied against the Obligations in accordance with Section
12.6.

 

Section 3.3.  Interest.  Interest on outstanding Notes will accrue at the rate
of 11.50% per annum.  Interest will be payable monthly in arrears on the last
day of each month, commencing on December 31, 2017 (each, an “Interest Payment
Date”);  provided, that in any event, accrued interest shall be paid on the
Maturity Date.  The Company will make each interest payment to the Holders of
record on each Interest Payment Date pursuant to the payment instructions set
forth in the Purchaser Schedule of each Holder or as otherwise provided by such
Holder to the Company; provided, that such payments shall be made to the
Collateral Trustee, for the benefit of the Holders, to the extent appointed on
terms and condition satisfactory to the Required Holders and the Company. 
Interest on the Notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently
paid.  Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.  If any Interest Payment Date, other than the Maturity
Date, would otherwise be a day that is not a Business Day, the Interest Payment
Date shall be postponed to the immediately succeeding day that is a Business
Day, with the same force and effect as if made on the date such payment was due,
except that if that Business Day is in the immediately succeeding calendar
month, the Interest Payment Date shall be the immediately preceding Business
Day. Notwithstanding the foregoing, the interest rate on the Notes will in no
event be higher than the maximum rate permitted by New York law as the same may
be modified by United States law of general application.    

 

SECTION 4.CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at each Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at such Closing, of the following conditions:

Section 4.1.  Representations and Warranties.  The representations and
warranties of the Company and the Guarantors in this Agreement and the other
Note Purchase Documents shall be correct in all material respects (or in all
respects in the case of any such representations and warranties qualified by
materiality) when made and at each such Closing, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case

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such representations and warranties were true and correct in all material
respects as of such earlier date.

 

Section 4.2.  No Default.    Before and after giving effect to the issue and
sale of the Notes, no Default or Event of Default shall have occurred and be
continuing.

 

Section 4.3.  Compliance Certificates.

(a)Officer’s Certificate.  The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.

(b)Secretary’s Certificate.  The Company shall have delivered to such Purchaser
a certificate of its Secretary or Assistant Secretary, certifying as to (i)
officer incumbency and (ii) the Company’s organizational documents as then in
effect.

Section 4.4.  [Intentionally Deleted].  

Section 4.5.  Purchase Permitted By Applicable Law, Etc.  On the date of each
Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including Regulation T, U or X of the Board of Governors of
the Federal Reserve System) and (c) not subject such Purchaser to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof.

 

Section 4.6.  Sale of Other Notes.  Contemporaneously with each Closing the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at such Closing as specified in the
Note Purchase Request.

 

Section 4.7.  Consent.  The requisite percentage of the Prepetition Note Holders
shall have executed an amendment, consent and/or waiver under the Prepetition
Notes Indenture to permit the transactions contemplated by the Interim DIP Order
and the Note Purchase Documents and to effectuate a “roll-up” of certain
Prepetition Notes as provided in the Interim DIP Order, in each case, in form
and substance satisfactory to the Required Holders. 

 

Section 4.8.  Issuance of Notes.  Each Purchaser shall have received a Note in
the amount of its Commitment then in effect.

 

Section 4.9.  Changes in Corporate Structure.  The Company shall not have
changed its jurisdiction of incorporation or organization, as applicable, or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other entity. 

 

Section 4.10.  Funding Instructions.  Each Purchaser shall have received a Note
Purchase Request prior to 1:00 p.m. (New York time) on the date which is at
least three Business Days (but not more than five Business Days) prior to each
Note Purchase Date (or such shorter

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period as the Purchasers may agree to) signed by a Responsible Officer on
letterhead of the Company confirming the information specified in Section 3
including (i) the name and address of the transferee bank, (ii) such transferee
bank’s ABA number and (iii) the account name and number for the Proceeds Account
into which the purchase price for the Notes is to be deposited; provided, that
the initial Note Purchase Request shall be delivered the day before the initial
sale of Notes. 

 

Section 4.11.  Proceedings and Documents.  All corporate, Bankruptcy Court and
other proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions shall
be satisfactory to such Purchaser and its special counsel, and such Purchaser
and its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as such Purchaser or such special
counsel may reasonably request.

 

Section 4.12.  Closing Documents.   Those Note Purchase Documents and all other
instruments, agreements and actions set forth on Schedule 4.12 that are required
pursuant to Schedule 4.12 to be executed and delivered or completed at the
Closing shall have been executed and/or completed, and all other Note Purchase
Documents and all other instruments, agreements and actions set forth on
Schedule 4.12 shall have been executed and/or completed, in each case, in form
and substance satisfactory to the Required Holders, no later than the fourteenth
(14th) day after the Petition Date (if required to be executed and/or
completed  by such date).

 

Section 4.13.  Chapter 11 Cases.  With respect to the Chapter 11 Cases:  (a) The
interim order of the Bankruptcy Court approving the ABL DIP Facility, which
order may be part of the Interim DIP Order) (the “Interim ABL DIP Order”) in
form and substance satisfactory to the Required Holders shall have been entered
and be in full force and effect and the applicable order of the Bankruptcy Court
approving the ABL DIP Facility, whether on an interim basis or a final basis,
shall be in full force and effect and shall not have been vacated, reversed, or
stayed in any respect or modified or amended, in each case in a manner not
acceptable to the Required Holders; (b) the documentation evidencing or relating
to the ABL DIP Facility shall be in form and substance satisfactory to the
Required Holders; (c) the ABL DIP Facility shall have closed; (d) the undrawn
borrowing availability under ABL DIP Facility shall be at least $2,500,000 as of
the closing date of the ABL DIP Facility; (e) all First Day Orders shall have
been entered by the Bankruptcy Court and shall be reasonably acceptable in form
and substance to the Required Holders; (f) the Chapter 11 Debtors shall have
made no payments after the Petition Date on account of any debt or other claims
arising prior to the Petition Date without the consent of the Required Holders
or pursuant to the First Day Orders; (g) within three business days after the
Petition Date (or such later date as the Required Holders may agree in their
reasonable discretion), the Bankruptcy Court shall have entered the Interim DIP
Order in form and substance satisfactory to the Required Holders; (h) with
respect to any Note Purchase Request made after the initial Note Purchase
Request, within 35 calendar days after the Petition Date (or such later date as
the Required Holders may agree in their respective sole discretion), the
Bankruptcy Court shall have entered the Final DIP Order in form and substance
satisfactory to the Required Holders and such order shall have become a Final
DIP Order; (i)  all motions and other documents filed or to be filed with and
submitted to the Bankruptcy Court in connection with the Note Purchase Documents
and the approval thereof shall be in form and substance satisfactory to the
Required Holders; (j) the entry into the Note Purchase Documents shall not 

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violate any requirement of law in any material respect and shall not be
enjoined, temporarily, preliminarily, or permanently; (k) the Interim DIP Order
and the Final DIP Order, as applicable, shall be in full force and effect and
shall not have been vacated, reversed, or stayed in any respect or modified or
amended in any manner (except, in the case of any such modifications or
amendments, with the consent of the Required Holders), and (l) the Company shall
have borrowed under the ABL DIP Facility at or prior to the applicable Closing
the amount required pursuant to the Interim DIP Order or Final DIP Order, as the
case may be. 

 

Section 4.14.  Budget.  The Purchasers shall have received a 13-week cash flow
projection acceptable to the Required Holders in all respects and otherwise
satisfying the requirements of the definition of Initial Approved Budget (as
defined in the Interim DIP Order) (the “Initial Approved Budget”) and the
Company shall be in compliance with the Approved DIP Budget (subject to
permitted variances in the DIP Order) as of the latest DIP Variance Report.  The
Required Holders agree that the initial 13-week cash flow projection attached to
the Interim DIP Order is acceptable in all respects

 

Section 4.15.  Security.  The Purchasers shall have received evidence that the
Notes and Obligations of the Company and Guarantors under the Note Purchase
Documents are secured by valid and perfected liens on and security interest in
the equity of the Company and the assets of the Company and Guarantors with the
scope and priority set forth in the DIP Order.  The Company and the Guarantors
shall enter into such documents and agreements as the Required Holders may
request from time to time to evidence the grant and perfection of the security
interests and liens related to the Notes.   

 

Section 4.16.  Know Your Customer Requirements.   Each Purchaser shall have
received  “know your customer” and similar information with respect to the
Company and Guarantors requested five Business Days prior to such Closing.

 

General Fees and Expenses.  All fees and expenses (including reasonable and
documented out-of-pocket fees and expenses of counsel) of the Required Holders
and the other Purchasers (with the consent of the Required Holders), the
Prepetition Notes Trustee and the Collateral Trustee relating to the Chapter 11
Cases (with the consent of the Required Holders), the Note Purchase Documents
and/or the Prepetition Notes shall have been paid (whether accrued pre-petition
or post-petition).

 

Section 4.18.  Purchaser Closing Fees.  Each Purchaser shall have received a
closing fee in an amount equal to (a) 1.50% of its Interim Commitment set forth
in the Purchaser Schedule payable in cash on the date the Interim DIP Order is
entered by the Bankruptcy Court and (b) 1.50% of its Final Commitment set forth
in the Purchaser Schedule payable in cash on the date the Final DIP Order is
entered by the Bankruptcy Court.  Each Purchaser is authorized to net fund the
purchase price to be paid by such Purchaser under its Note on such dates in
order to effectuate the payment of such fees.  

 

Section 4.19.  Backstop Fee.  Each Purchaser executing this Agreement on the
date hereof (each, a “Backstop Party” and collectively, the “Backstop Parties”)
 shall have received a backstop fee in an amount equal to 3.50% of such
Purchaser’s Commitment payable in cash on the date the Interim DIP Order is
entered by the Bankruptcy Court.  Each Purchaser is authorized

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to net fund the purchase price to be paid by such Purchaser under its Note on
such date in order to effectuate the payment of such fees.  

 

SECTION 5.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

Section 5.1.  Corporate Existence and Power.  Each Credit Party:

 

(a)is a corporation, unlimited liability company, limited liability company,
general partnership or limited partnership, as applicable, duly organized,
validly existing and in good standing (to the extent such concept exists) under
the laws of the jurisdiction of its incorporation, organization or formation, as
applicable;

(b)upon entry of the DIP Order, has the corporate or other organizational power
and authority and all governmental licenses, authorizations, Permits, consents
and approvals to (i) own its assets, (ii) carry on its business and
(iii) execute, deliver, and perform its obligations under, the Note Purchase
Documents and the Related Agreements to which it is a party;

(c)is duly qualified as a foreign corporation, extra provincial corporation,
unlimited liability company, limited liability company or limited partnership,
as applicable, and licensed and in good standing, under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification or license; and

(d)is in compliance with all Requirements of Law;

except, in each case referred to in clause (b)(i), clause (b)(ii), clause (c) or
clause (d), to the extent that the failure to do so would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.  No Credit Party is an EEA Financial Institution.

Section 5.2.  Corporate Authorization; No Contravention.  The execution,
delivery and performance by each Credit Party of the Note Purchase Documents and
Related Agreements to which it is a party have been duly authorized by all
necessary corporate or other organizational action, and do not and will not:  
 (a) contravene the terms of any of that Person’s Organization
Documents; (b) conflict with or result in any material breach or contravention
of, or result in the creation of any Lien (other than Liens granted under the
Related Agreements and approved by the DIP Order) under, any document evidencing
any material Contractual Obligation to which such Person is a party or any
order, injunction, writ or decree of any Governmental Authority to which such
Person or its Property is subject (other than breaches resulting from the filing
of the Chapter 11 Cases); or (c) violate any Requirement of Law in any material
respect.

 

Section 5.3.  Governmental Authorization.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Credit
Parties of the Related Agreement (in each case, to which such Person is a party)
except (a) for recordings and filings in connection with the Liens granted to
Collateral Trustee under the Related Agreements, (b) the DIP Order and any
others obtained or made on or prior to the Closing Date and (c) , those which,
if not obtained or made, would not

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reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

Section 5.4.  Binding Effect.  This Agreement and each other Note Purchase
Document and Related Agreement to which any Credit Party is a party constitute
the legal, valid and binding obligations of each such Person which is a party
thereto, enforceable against such Person in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.

 

Section 5.5.  Litigation.  Other than the Chapter 11 Cases, there are no
actions, suits, proceedings, claims or disputes pending, or to the knowledge of
the Company, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against any Credit Party or any Subsidiary of
any Credit Party or any of their respective Properties which:

 

(a)purport to affect or pertain to this Agreement, any other Note Purchase
Document or Related Agreement, or any of the transactions contemplated hereby or
thereby; or

(b)except as disclosed on Schedule 5.5, would reasonably be expected to result
in monetary judgment(s) or relief, individually or in the aggregate, in excess
of $1,000,000; or

(c)seek an injunction or other equitable relief which would reasonably be
expected to have a Material Adverse Effect.

No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Note Purchase Document or any Related Agreement, or directing that the
transactions provided for herein or therein not be consummated as herein or
therein provided. As of the Closing Date, neither the Company nor any of its
Subsidiaries is the subject of an audit or, to the Company’s knowledge, any
review or investigation by any Governmental Authority (excluding the IRS, CRA
and other taxing authorities) concerning the violation or possible violation of
any Requirement of Law that could reasonably be expected to result in
Liabilities, individually or in the aggregate, in excess of $1,000,000.

Section 5.6.  No Default.  No Default or Event of Default exists or would result
from the incurring of any Obligations by any Credit Party or the grant or
perfection of Collateral Trustee’s Liens on the Collateral. Neither the Company
nor any of its Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, would reasonably be expected to have a Material Adverse Effect,
expect such defaults resulting from the filing of the Chapter 11 Cases.

 

Section 5.7.  Pension Plan; ERISA Compliance.

 

(a)Schedule 5.7 sets forth, as of the Closing Date, a complete and correct list
of, and separately identifies, (a) all Title IV Plans, (b) all Multiemployer
Plans and (c) all material Benefit Plans. Each Benefit Plan, and each trust
thereunder, intended to qualify for tax exempt status under Section 401 or 501
of the Code so qualifies. Except for those that would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, (x) each Benefit Plan
is in compliance

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with applicable provisions of ERISA, the Code, other Requirements of Law and the
terms of such plan, (y) there are no existing or pending (or to the knowledge of
the Company, threatened) claims (other than routine claims for benefits in the
normal course), sanctions, actions, lawsuits or other proceedings or
investigation involving any Benefit Plan to which any Credit Party incurs or
otherwise has or could have an obligation or any Liability and (z) no ERISA
Event is reasonably expected to occur. On the Closing Date, no ERISA Event has
occurred in connection with which obligations and liabilities (contingent or
otherwise) remain outstanding.

(b)Schedule 5.7 sets forth, as of the Closing Date, a complete and correct list
of, and separately identifies, all Canadian Pension Plans and Canadian Benefit
Plans maintained or contributed to by the Company and each of its Subsidiaries.
Except for those that would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect, no Canadian Benefit Plan provides for medical,
life or other welfare benefits (through insurance or otherwise), with respect to
any current or former employee of any Subsidiary organized in Canada or any
Affiliate thereof after retirement or other termination of service (other than
coverage mandated by Requirements of Law or coverage provided through the end of
the month containing the date of termination from service or otherwise where
part of a severance package or with respect to injured or disabled employees).
No Canadian Pension Plan is a Canadian Defined Benefit Pension Plan. The
Canadian Pension Plans are duly registered under the Income Tax Act (Canada) and
all other applicable laws which require registration. Each Credit Party and its
Subsidiaries has complied with and performed all of its obligations under and in
respect of the Canadian Benefit Plans and the Canadian Pension Plans under the
terms thereof, any funding agreements and all applicable laws (including any
fiduciary, funding, investment and administration obligations), except to the
extent it would not reasonably be expected to result in a Material Adverse
Effect. All employer and employee payments, contributions or premiums to be
remitted, paid to or in respect of each Canadian Benefit Plan and Canadian
Pension Plan have been paid in a timely fashion in accordance with the terms
thereof, any funding agreement and all applicable laws, except to the extent it
would not reasonably be expected to result in a Material Adverse Effect. No
Canadian Pension Event has occurred.  No Lien has arisen, choate or inchoate, in
respect of any Credit Party or their property in connection with any Canadian
Pension Plan (save for contribution amounts not yet due).

(c)Schedule 5.7 sets forth a complete and correct list of, and that separately
identifies, all Mexican Employee Benefit Plans.  Except for non-compliance that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, each Mexican Employee Benefit Plan is being maintained, operated and
administered in compliance with its terms and the provisions of applicable law,
and comply with all legal requirements defined and required under the Mexican
tax and social welfare laws, including the Income Tax Law  (Ley del Impuesto
Sobre la Renta) and Social Welfare Law (Ley del Seguro Social).

Section 5.8.   [Reserved]. 

 

Section 5.9.  Ownership of Property; Liens.  As of the Closing Date, the Real
Estate listed on Schedule 5.9 constitutes all of the Real Estate of the Company
and each of its Subsidiaries. Each of the Company and its Subsidiaries has good
record and marketable title in fee simple to, or valid leasehold interests in,
all Real Estate, and good and valid title to all owned personal property and
valid leasehold interests in all leased personal property, in each instance,
necessary or used in the ordinary conduct of their respective businesses, except
for defects in title

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that, individually or in the aggregate, do not materially interfere with its
ability to conduct its business as currently conducted and to utilize such Real
Estate or such property, as applicable, for its intended purposes. None of the
Real Estate of the Company or any of its Subsidiaries is subject to any Liens
other than Permitted Liens. As of the Closing Date, Schedule 5.9 also describes
any purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate (in the case of leased Real Estate, solely
to the extent any such purchase option, right of first refusal or similar
contractual right relates to the leasehold interest of the Company or its
applicable Subsidiary thereof). All material Permits required to have been
issued or appropriate to enable the Real Estate to be lawfully occupied and used
for all of the purposes for which it is currently occupied and used have been
lawfully issued and are in full force and effect.

 

Section 5.10.  Taxes.  All material United States federal, Canadian federal,
Mexican federal, state, foreign, provincial and local income and franchise and
other material Tax returns, reports and statements (collectively, the “Tax
Returns”) required to be filed by any Tax Affiliate have been filed with the
appropriate Governmental Authorities, all such Tax Returns are true and correct
in all material respects, and all material Taxes reflected therein or otherwise
due and payable have been paid prior to the date on which any Liability may be
added thereto for non-payment thereof except for (a) those contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves are maintained on the books of the appropriate Tax Affiliate in
accordance with GAAP or the accounting rules applicable to such Tax Affiliate
and (b) state, foreign, provincial or other local sales, property or use tax
returns and taxes owing thereunder that, collectively, do not exceed
$1,000,000 (or $100,000 to the extent secured by a Lien) at any one time.  No
material Tax Return is under audit or examination by any Governmental Authority,
and no notice of any audit or examination has been received from any
Governmental Authority, except to the extent that any such audit or examination
could not reasonably be expected in the good faith determination of the Company
to result in Liabilities, individually or in the aggregate, in excess of
$1,000,000 (or $100,000 to the extent secured by a Lien).

 

Section 5.11.  Financial Condition.

 

(a)The most recent financial statement delivered under the Prepetition Notes
Indenture:

(x)were, to the knowledge of the Company, prepared in accordance with GAAP
consistently applied throughout the respective periods covered thereby, except
as otherwise expressly noted therein, subject to normal year-end adjustments and
the lack of footnote disclosures; and

(y)to the knowledge of the Company, present fairly in all material respects the
consolidated and consolidating financial condition of the Credit Parties and
their Subsidiaries as of the dates thereof and results of operations for the
periods covered thereby.

(b)Since December 31, 2016, other than the filing of the Chapter 11 Cases, there
has been no Material Adverse Effect.

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(c)Neither the Company nor any of its Subsidiaries has any Indebtedness or
Contingent Obligations other than outstanding Indebtedness and Contingent
Obligations expressly permitted pursuant to this Agreement.

Section 5.12.  Environmental Matters.  Except as would not reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect, (a) the operations of each of the Company and its Subsidiaries
are and have been in compliance with all applicable Environmental Laws,
including obtaining, maintaining and complying with all Permits required by any
applicable Environmental Law, (b) no Lien in favor of any Governmental Authority
securing, in whole or in part, Environmental Liabilities has attached to any
Property of the Company or any of its Subsidiaries and, to the knowledge of the
Company, no facts, circumstances or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such Property, (c) neither
the Company nor any of its Subsidiaries has caused or suffered to occur a
Release of Hazardous Materials at, to or from any Real Estate, (d) all Real
Estate currently (or to the knowledge of the Company previously) owned, leased,
subleased, operated or otherwise occupied by or for the Company or any of its
Subsidiaries is free of contamination by any Hazardous Materials, and
(e) neither the Company nor any of its Subsidiaries (i) is or has been engaged
in, or has permitted any current or former tenant to engage in, operations in
violation of any Environmental Law or (ii) has received any written information
request or notice of potential responsibility under the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et
seq.) or similar Environmental Laws. The Company has made available to the
Collateral Trustee and the Holders copies of all environmental reports, reviews
and audits and all documents pertaining to actual or potential Environmental
Liabilities, in each case to the extent existing as of the Closing Date and such
reports, reviews, audits and documents are in the possession, custody, control
or otherwise available to the Company and its Subsidiaries.

 

Section 5.13.  Regulated Entities.  None of the Credit Parties and the Persons
controlling the Credit Parties is (a) an “investment company” within the meaning
of the Investment Company Act of 1940 or (b) subject to regulation under the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other federal, state, provincial, territorial, local or foreign statute,
rule or regulation limiting its ability to incur Indebtedness, pledge its assets
or perform its obligations under the Note Purchase Documents to which it is
party.

 

Section 5.14.   [Reserved].

 

Section 5.15.  Labor Relations.  There are no strikes, work stoppages, slowdowns
or lockouts existing, pending (or, to the knowledge of the Company,
threatened) against or involving the Company or any of its Subsidiaries, except
for those that would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.  Except as set forth on Schedule 5.15 as of the Closing
Date, there is (a) no collective bargaining or similar agreement with any union,
labor organization, works council or similar representative covering any
employee of the Company or any of its Subsidiaries, (b) no petition for
certification or election of any such representative is existing or pending with
respect to any employee of the Company or any of its Subsidiaries and (c) no
such representative has sought certification or recognition with respect to any
employee of the Company or any of its Subsidiaries.

 

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Section 5.16.  Intellectual Property.  Schedule 5.16 sets forth as of the
Closing Date a true and complete list of all Intellectual Property owned by each
Credit Party, and any and all Intellectual Property with respect to which such
Credit Party has an interest and the valid right to use, and includes with
respect thereto the following items: (1) the owner; (2) the title; (3) as
applicable, the jurisdiction in which such item has been registered or otherwise
arises or in which an application for registration has been filed; (4) as
applicable, the registration or application number and registration or
application date; and (5) any material inbound or outbound IP Licenses or other
rights (including franchises) granted by or to such Credit Party.  The Company
and each of its Subsidiaries owns, or is licensed to use, all Intellectual
Property necessary to conduct its business as currently conducted except for
such Intellectual Property the failure of which to own or license would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. To the knowledge of the Company, (a) the conduct and
operations of the businesses of the Company and each of its Subsidiaries does
not infringe, misappropriate, dilute, violate or otherwise impair any
Intellectual Property owned by any other Person and (b) no other Person has
notified any the Company or any of its Subsidiaries that it is contesting or
intends to contest any right, title or interest of the Company or any of its
Subsidiaries in, or relating to, any Intellectual Property, other than, in each
case, as cannot reasonably be expected to affect the Note Purchase Documents and
the transactions contemplated therein and would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Section 5.17.  Brokers’ Fees; Transaction Fees.  Except for fees payable to
Collateral Trustee and the Holders, the lenders and agent under the ABL DIP
Facility, and to the Company’s financial advisor (Jefferies LLC, or its
affiliates), neither the Company nor any of its Subsidiaries has any obligation
to any Person in respect of any finder’s, broker’s or investment banker’s fee in
connection with the transactions contemplated hereby.

 

 

Section 5.18.  Insurance.  Schedule 5.18 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, including issuers, coverages and deductibles. Each of the Company,
its Subsidiaries and their respective Properties are insured with financially
sound and reputable insurance companies which are not Affiliates of the Company,
in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses of the same size
and character as the business of the Credit Parties and, to the extent relevant,
owning similar Properties in localities where such Person operates.

 

Section 5.19.  Ventures, Subsidiaries and Affiliates; Outstanding Stock.  Except
as set forth on Schedule 5.19, as of the Closing Date, neither Intermediate
Holdings, the Company nor any of its Subsidiaries (a) has any Subsidiaries, or
(b) is engaged in any joint venture or partnership with any other Person.  All
issued and outstanding Shares and Share Equivalents of each of the Company and
its Subsidiaries are duly authorized and validly issued, fully paid,
non-assessable, and free and clear of all Liens other than, with respect to the
Shares and Share Equivalents of the Company and its Subsidiaries, those in favor
of Collateral Trustee, for the benefit of the Holders, those in favor of the
Prepetition Notes Trustee and those in favor of the ABL Agent. All such
securities were issued in compliance in all material respects with all
applicable state, provincial, territorial and federal laws concerning the
issuance of securities. All of the issued and outstanding Shares of the Company
and each of its Subsidiaries are owned, as

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of the Closing Date, by each of the Persons and in the amounts set forth in
Schedule 5.19.  Except as set forth on Schedule 5.19, as of the Closing Date
there are no pre-emptive or other outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which any Credit Party may
be required to issue, sell, repurchase or redeem any of its Shares or Share
Equivalents or any Shares or Share Equivalents of its Subsidiaries. Set forth in
Schedule 5.19 is, as of the Closing Date, a true and complete organizational
chart of Intermediate Holdings and all of its Subsidiaries.

 

Section 5.20.  Jurisdiction of Organization; Chief Executive Office.  Schedule
5.20 lists each Credit Party’s jurisdiction of organization, legal name and
organizational identification number, if any, and the location of such Credit
Party’s registered office, chief executive office or sole place of business or
domicile (within the meaning of the Civil Code of Quebec), in each case as of
the Closing Date, and such Schedule 5.20 also lists all jurisdictions of
organization and legal names of such Credit Party for the five years preceding
the Closing Date. In relation to each Credit Party and any Subsidiary of a
Credit Party, in each case incorporated in a member state of the European Union,
for the purposes of The Council of the European Union Regulation No. 1346/2000
on Insolvency Proceedings (the “Regulation”), its center of main interest (as
that term is used in Article 3(1) of the Regulation) is situated in its
jurisdiction of incorporation and it has no “establishment” (as that term is
used in Article 2(h) of the Regulations) in any other jurisdiction.   

 

Section 5.21.  Locations of Inventory, Equipment and Books and Records.  Each
Credit Party’s inventory and equipment (other than inventory or equipment in
transit) and books and records concerning the Collateral are kept, as of the
Closing Date, at the locations listed on Schedule 5.21 (which Schedule 5.21
shall be promptly updated by the Company upon notice to Collateral Trustee and
Holders as permanent Collateral locations change). Each Credit Party that keeps
records in the Province of Quebec relating to Collateral keeps a duplicate copy
thereof at a location outside the Province of Quebec, as listed on Schedule
5.21.  

 

Section 5.22.  Deposit Accounts and Other Accounts.  Schedule 5.22 lists all
banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Closing Date, and such Schedule correctly
identifies the name, address and any other relevant contact information
reasonably requested by Collateral Trustee or the Required Holders with respect
to each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.

 

Section 5.23.  Government Contracts.  Except as set forth on Schedule 5.23, as
of the Closing Date, no Credit Party is a party to any contract or agreement
with any Governmental Authority and no Credit Party’s Accounts are subject to
the Federal Assignment of Claims Act (31 U.S.C. Section 3727), the Financial
Administration Act (Canada) or any similar state, provincial or local law.

 

Section 5.24.  Customer and Trade Relations.  Except as set forth on Schedule
5.24, As of the Closing Date, there exists no actual or, to the knowledge of any
Credit Party, threatened termination or cancellation of, or any material adverse
modification or change in (a) the business relationship of any Credit Party with
any customer or group of affiliated customers whose purchases during the
preceding twelve (12) calendar months caused them to be ranked among the

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ten largest customers of such Credit Party or (b) the business relationship of
any Credit Party with any supplier essential to its operations.

 

Section 5.25.  Bonding.  Except as set forth on Schedule 5.25, as of the Closing
Date, no Credit Party is a party to or bound by any surety bond agreement,
indemnification agreement therefor or bonding requirement with respect to
products or services sold by it.

 

Section 5.26.  Full Disclosure.  None of the written representations or
warranties made by any of the Credit Parties in the Note Purchase Documents to
which it is party as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of such Credit Party in
connection with the Note Purchase Documents (including the written disclosure
materials, if any, delivered by or on behalf of the Company to Collateral
Trustee or any Holder prior to the Closing Date), when taken as a whole,
contains any untrue statement of a material fact or omits any material fact
necessary to make the statements made therein, in light of the circumstances
under which they are made, not materially misleading as of the time when made or
delivered (after giving effect to all supplements and updates thereto).

 

Section 5.27.  Foreign Assets Control Regulations and Anti-Money
Laundering.  Each Credit Party and its Subsidiaries is in compliance in all
material respects with all economic sanctions laws of any applicable
Governmental Authority, executive orders and implementing regulations as
promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”), and all applicable anti-money laundering and counter-terrorism
financing provisions of the Bank Secrecy Act and all regulations issued pursuant
to it and all regulations issued pursuant to the Canadian AML Legislation and
all other related laws of any applicable Governmental Authority. No Credit Party
nor any Subsidiary or Affiliate of any Credit Party (i) is a Person designated
by the U.S. government on the list of the Specially Designated Nationals and
Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal with or
otherwise engage in business transactions, (ii) is a Person who is otherwise the
target of U.S. economic sanctions laws such that a U.S. Person cannot deal or
otherwise engage in business transactions with such Person, (iii) is controlled
by (including by virtue of such person being a director or owning voting Shares
or interests), or acts, directly or indirectly, for or on behalf of, any person
or entity on the SDN List or a foreign government that is the target of U.S.
economic sanctions prohibitions such that the entry into, or performance under,
this Agreement or any other Note Purchase Document would be prohibited under
U.S. law, (iv) is a Person designated by the Canadian government on any list set
out in the United Nations Al-Qaida and Taliban Regulations, the Regulations
Implementing the United Nations Resolutions on the Suppression of Terrorism, the
Criminal Code or other similar applicable law (collectively, the “Terrorist
Lists”) with which a Credit Party cannot deal with or otherwise engage in
business transactions, (v) is a Person who is otherwise the target of Canadian
or U.K. economic sanctions laws such that a Credit Party cannot deal or
otherwise engage in business transactions with such Person or (vi) is controlled
by (including by virtue of such Person being a director or owning voting Shares
or interests), or acts, directly or indirectly, for or on behalf of, any Person
on any Terrorist List or a foreign government that is the target of Canadian or
U.K. economic sanctions prohibitions such that the entry into, or performance
under, this Agreement or any other Note Purchase Document would be prohibited
under Canadian or English law.

 

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Section 5.28.  Patriot Act; Counter-Terrorism Regulations.  The Company, its
Subsidiaries and, to the Company’s knowledge, its Affiliates are each in
compliance with (a) the Trading with the Enemy Act (in the case of the Canadian
Subsidiaries, subject to applicable Canadian Requirements of Law), and each of
the foreign assets control regulations of the United States Treasury Department
and any other enabling legislation or executive order relating thereto, (b) the
Patriot Act, (c) Canadian AML Legislation, and (d) all laws of any applicable
jurisdiction relating to “know your customer” and anti-money laundering and all
rules and regulations. No part of the proceeds of any Note will be used directly
or indirectly for any payments to any government official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977 or the Corruption of Foreign Public
Officials Act (Canada) or the U.K. Bribery Act 2010.

 

Section 5.29.  Physical Condition of Owned Properties. (a) Each of the Owned
Properties, including all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, is, to
the Company’s knowledge, in good condition, order and repair in all material
respects (ordinary wear and tear excepted), and (b) to the Company’s knowledge,
there exists no structural or other material defects or damages in any of the
Owned Properties, whether latent or otherwise, other than ordinary wear and
tear. Neither the Company nor any other Credit Party has received written notice
from any insurance company or bonding company of any defects or inadequacies in
any of the Owned Properties, or any part thereof, which would adversely affect
the insurability of the same or cause the imposition of extraordinary premiums
or charges thereon or of any termination or threatened termination of any policy
of insurance or bond.

 

Section 5.30.  Access.  To the extent that any of the Owned Properties contain
operating facilities, each of the Owned Properties has adequate rights of access
to public ways and is served by adequate water, sewer, sanitary sewer and storm
drain facilities. All public utilities necessary or convenient to the use and
enjoyment of each of the Owned Properties in all material respects are located
in the public right-of-way abutting each Owned Property, and all such utilities
are connected so as to serve each Owned Property without passing over other
property, except to the extent such other property is subject to a perpetual
easement for such utility benefiting such Owned Property. All roads necessary
for the utilization of each Owned Property in all material respects for its
current purpose have been completed and dedicated to public use and accepted by
all Governmental Authorities.

 

Section 5.31.  DIP Order Notices.  The Chapter 11 Cases were commenced on the
Petition Date in accordance with applicable law and proper notice thereof, and
the proper notice appropriate under the circumstances, as reflected in the
Interim DIP Order, for (x) the motion seeking approval of the Note Purchase
Documents and the Interim DIP Order and Final DIP Order, (y) the hearing for the
approval of the Interim DIP Order, and (z) the hearing for the approval of the
Final DIP Order has been or will be given.

 

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Section 5.32.  Superpriority Administrative Expense Claims.  After the entry of
the Interim DIP Order, and pursuant to and to the extent permitted in the
Interim DIP Order and the Final DIP Order, the Obligations will constitute
allowed superpriority administrative expense claims (the “Superpriority
Administrative Claim”) in the Chapter 11 Cases having priority over all
administrative expense claims and unsecured claims against the debtors in the
Chapter 11 Cases now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expense claims of the kind
specified in sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b),
546(c), 726, 1113, 1114, or any other provision of the Bankruptcy Code or
otherwise, as provided under section 364(c)(l) of the Bankruptcy Code, except as
provided by the DIP Order and subject in all respects to the Carve-Out. 

 

Section 5.33.  DIP Liens.  After the entry of the Interim DIP Order and pursuant
to and to the extent provided in the DIP Order, the Obligations will be secured
by a valid and perfected first priority Lien on all of the Collateral, subject
to the Liens and priorities of other claims provided by the DIP Order

 

Section 5.34.  DIP Order Modifications.  The Interim DIP Order (with respect to
the period prior to entry of the Final DIP Order) or the Final DIP Order (with
respect to the period on and after entry of the Final DIP Order), as the case
may be, is in full force and effect and has not been reversed, stayed, modified
or amended without the consent of the Required Holders.

 

Section 5.35.  Private Offering by the Company.  Neither the Company nor anyone
acting on its behalf has knowingly taken, or will knowingly take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of section 5 of the Securities Act or to the registration
requirements of any Securities or blue sky laws of any applicable jurisdiction.

 

Section 5.36.  Use of Proceeds; Margin Regulations.  The proceeds of the sale of
the Notes hereunder have been deposited into the Proceeds Account and will be
used in accordance with Section 9.10.  No part of the proceeds from the sale of
the Notes or from the Proceeds Account will be used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any Securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). 

 

 

SECTION 6.REPRESENTATIONS OF THE PURCHASERS.

Section 6.1.  Purchase for Investment.  Each Purchaser severally represents that
it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension,
mutual or trust funds and not with a view to the distribution thereof, provided
that the disposition of such Purchaser’s or their property shall at all times be
within such Purchaser’s or their control.  Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from

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registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.

 

Section 6.2.  Source of Funds.  Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser hereunder:

 

(a)the Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction Exemption
(“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the NAIC (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on
behalf of any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

(b)the Source is a separate account that is maintained solely in connection with
such Purchaser’s fixed contractual obligations under which the amounts payable,
or credited, to any employee benefit plan (or its related trust) that has any
interest in such separate account (or to any participant or beneficiary of such
plan (including any annuitant)) are not affected in any manner by the investment
performance of the separate account; or

(c)the Source is either (i) an insurance company pooled separate account, within
the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the
meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

(d)the Source constitutes assets of an “investment fund” (within the meaning of
Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are managed by the QPAM in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or
by the same employee organization and managed by such QPAM, represent more than
20% of the total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM
and (ii) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate (within the
meaning of Part VI(c)(1) of the QPAM Exemption)

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of such employer or by the same employee organization, represent 10% or more of
the assets of such investment fund, have been disclosed to the Company in
writing pursuant to this clause (d);or

(e)the Source constitutes assets of a “plan(s)” (within the meaning of Part
IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption),
the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or

(f)the Source is a governmental plan; or

(g)the Source is an investment company registered under the Investment Company
Act of 1940; or

(h)the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or

(i)the Source does not include assets of any employee benefit plan, other than a
plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

SECTION 7.[INTENTIONALLY OMITTED]

SECTION 8.PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1.  Maturity.  The entire unpaid principal balance of each Note shall
be due and payable on the Maturity Date thereof.

 

Section 8.2.  Optional Prepayments.  The Company may, at its option, upon notice
as provided below, prepay at any time all, or from time to time any part of, the
Notes then outstanding in the case of a partial prepayment, at 100% of the
principal amount so prepaid.  The Company will give each Holder of Notes written
notice of each optional prepayment under this Section 8.2 not less than 10 days
and not more than 30 days prior to the date fixed for such prepayment unless the
Company and the Required Holders agree to another time period pursuant to
Section 17 except in the case of a full payoff of the Notes, in which case such
written notice will be delivered not less than 5 days prior to such date.  Each
such notice shall specify such date (which shall be a Business Day), the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such Holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid. 

 

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Section 8.3.  Mandatory Prepayments.If the Company or any Guarantor makes a
Disposition of any Collateral outside the Ordinary Course of Business (other
than any Disposition pursuant to Sections 10.02(a)(i), (a)(iii), (c), (d), (e),
(f) and (g) herein) or does not reinvest proceeds from a Disposition of
Equipment in accordance with Section 10.02(a), incurs a Casualty Event, incurs
Indebtedness not expressly permitted to be incurred under this Agreement,
receives proceeds from equity issuances or otherwise receives Extraordinary
Receipts, then, subject to the DIP Order (including with respect to the
Carve-Out), the Intercreditor Agreement and the Collateral Trust Agreement, the
Company shall make a prepayment of the Obligations in an amount equal to the net
cash proceeds received from any such event within two Business Days of such
receipt.  Subject to the DIP Order, the Intercreditor Agreement and the
Collateral Trust Agreement, such prepayment shall be allocated to the
Obligations in accordance with Section 12.6.

 

Section 8.4.  Allocation of Partial Prepayments.  Except as set forth in Section
2 with respect to DIP Notes Syndication, in the case of each partial prepayment
of the Notes pursuant to Sections 8.2, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment.  Proceeds received pursuant to
Section 8.3 shall be applied by the Company and Guarantors in accordance with
the Intercreditor Agreement and Collateral Trust Agreement subject to the terms
of the DIP Order (including with respect to the Carve-Out).   

 

Section 8.5.  Maturity; Surrender, Etc.  In the case of each prepayment of Notes
pursuant to this Section 8, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such prepayment,
together with interest on such principal amount accrued to such date.  From and
after such date, unless the Company shall fail to pay such principal amount when
so due and payable, together with the interest, as aforesaid, interest on such
principal amount shall cease to accrue.  Any Note paid or prepaid in full shall
be surrendered to the Company and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.

 

Section 8.6.  Purchase of Notes.  The Company will not and will not permit any
Credit Party or Subsidiary thereof to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the Note Purchase
Documents.  The Company will promptly cancel all Notes acquired by it or any
Credit Party or Subsidiary thereof pursuant to any payment or prepayment of
Notes pursuant to this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.

 

Section 8.7.  Payments Due on Non-Business Days.  Anything in this Agreement or
the Notes to the contrary notwithstanding, (x) except as set forth in clause
(y), any payment of interest on any Note that is due on a date that is not a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; and (y) any payment of principal of any Note
(including principal due on the Maturity Date of such Note) that is due on a
date that is not a Business Day shall be made on the next succeeding Business
Day and shall include the

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additional days elapsed in the computation of interest payable on such next
succeeding Business Day.

 

SECTION 9.AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 9.1.  Financial Statements.  The Company shall maintain, and shall cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
unaudited interim financial statements shall not be required to have footnote
disclosures and are subject to normal year-end adjustments). The Company shall
deliver to each Holder (in detail reasonably satisfactory to the Required
Holders):

 

(a)as soon as available, but not later than ninety (90) days after the end of
each Fiscal Year, a copy of the audited consolidated balance sheets of Parent
and its Subsidiaries as at the end of such year and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, and accompanied by the report of any “Big Four” or other
independent certified public accounting firm reasonably acceptable to the
Required Holders which report shall (i) contain an unqualified opinion, stating
that such consolidated financial statements present fairly in all material
respects the financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years and (ii) which may include a
qualified or explanatory paragraph expressing substantial doubt as to going
concern status or similar qualification; provided that, the audited financial
statements, information and other documents required to be provided as described
in the preceding sentence shall be accompanied by an unaudited schedule of
consolidating financial information relating to the North American and non-North
American business entities in detail reasonably acceptable to the Required
Holders;

(b)as soon as available, but not later than one hundred twenty (120) days after
the end of each Fiscal Year, a copy of the unaudited consolidated and
consolidating balance sheets of Intermediate Holding and each of its
Subsidiaries, and the related consolidated and consolidating statements of
income and shareholders’ equity, and on a consolidated basis only, cash flows,
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year; and

(c)as soon as available, but not later than (i) thirty (30) days after the end
of each fiscal month of each year, a copy of the unaudited consolidated and
consolidating balance sheets of Intermediate Holding each of its Subsidiaries,
and the related consolidated and consolidating statements of income and
shareholders’ equity and (ii) forty-five (45) days after the end of each Fiscal
Quarter, a copy of the unaudited consolidated and consolidating statement of
cash flows of Intermediate Holding and each of its Subsidiaries, as of the end
of such fiscal month or Fiscal Quarter, as applicable, and for the portion of
the Fiscal Year then ended, each of which shall be complete and correct and
fairly present, in all material respects, in accordance with GAAP, the financial
position and the results of operations of Intermediate Holding and each of its
Subsidiaries, subject to normal year-end adjustments and absence of footnote
disclosures.

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Section 9.2.  Certificates; Other Information.  The Company shall furnish to
each Holder:    

 

(a)as soon as available, but not later than forty-five (45) days after the end
of each Fiscal Quarter, (i) a management discussion and analysis report, in
reasonable detail, signed by the chief financial officer of the Company,
describing the operations and financial condition of the Company and each of its
Subsidiaries for the Fiscal Quarter and the portion of the Fiscal Year then
ended, and (ii) a report setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the most recent projections for the current Fiscal
Year provided to Holders and discussing the reasons for any significant
variations;

(b)concurrently with the delivery of the financial statements referred to in
Sections 9.1(a),  9.1(b) and 9.1(c), a fully and properly completed certificate
in the form of Schedule 9.1(b) (a “Compliance Certificate”), certified on behalf
of the Company by a Responsible Officer of the Company;

(c)promptly after the same are sent, copies of all financial statements and
reports which the Company or any Affiliate of the Company (to the Company’s
knowledge) sends to its shareholders or other equity holders, as applicable,
generally and promptly after the same are filed, copies of all financial
statements and regular, periodic or special reports which such Person may make
to, or file with, the Securities and Exchange Commission or any successor or
similar Governmental Authority;

(d)at the time of delivery of each of the financial statements delivered
pursuant to Section 9.1, (i) a listing of government contracts of the Company
subject to the Federal Assignment of Claims Act of 1940 or the Financial
Administration Act (Canada) or any similar state, provincial or municipal law or
foreign law; and (ii) a list of any applications for the registration of any
Patent, Trademark or Copyright filed by any Credit Party with the United States
Patent and Trademark Office, the United States Copyright Office, the Canadian
Intellectual Property Office or any similar office or agency in each case
entered into or filed in the prior Fiscal Quarter;

(e)promptly following the execution of any Permitted Supplier Financing
Arrangement, executed copies of all documentation regarding such Permitted
Supplier Financing Arrangement;

(f)promptly upon receipt thereof, copies of any reports submitted by the
Company’s certified public accountants in connection with each annual, interim
or special audit or review of any type of the financial statements or internal
control systems of any Credit Party made by such accountants;

(g)at the times specified in the DIP Order, the Company shall provide to each
Holder a proposed rolling 13-week cash flow projection (a “DIP Proposed
Budget”), which shall contain a line item breakdown of projected disbursements
and shall otherwise be in a form acceptable to the Required Holders, and, for
the avoidance of doubt, shall include any and all adequate protection payments
and professional fees

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(h)in accordance with the DIP Order, the Company shall provide a weekly DIP
Variance Report;

(i)promptly, such additional business, financial, collateral, corporate affairs,
perfection certificates and other information as the Collateral Trustee or
Required Holders may from time to time reasonably request.

Section 9.3.  Notices.  The Company shall notify promptly (and in no event later
than five (5) Business Days after a Responsible Officer becomes aware thereof)
each Holder of each of the following: 

 

(a)the occurrence or existence of any Default or Event of Default or any event
or circumstance that foreseeably will become a Default or Event of Default;

(b)any breach or non-performance of, or any default under, any Contractual
Obligation of the Company or any of its Subsidiaries, or any violation of, or
non-compliance with, any Requirement of Law, in each case, which would
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect, including a description of such breach,
non-performance, default, violation or non-compliance and the steps, if any,
such Person has taken, is taking or proposes to take in respect thereof;

(c)any dispute, litigation, investigation, proceeding or suspension which may
exist at any time between the Company or any of its Subsidiaries and any
Governmental Authority which would reasonably be expected to result, either
individually or in the aggregate, in Liabilities in excess of $500,000;

(d)the commencement of, or any material development in, any litigation or
proceeding affecting the Company or any of its Subsidiaries or any of their
respective property (i) in which the amount of damages claimed is $1,000,000 or
more, (ii) in which injunctive or similar relief is sought and which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect, or (iii) in which the relief sought is an injunction or other stay of
the performance of this Agreement, any other Note Purchase Document or any
Related Agreement;

(e) (i) the receipt by any Credit Party of any written notice of violation of or
potential liability or similar written notice under Environmental Law that would
reasonably be expected to result in Environmental Liabilities in excess of
$1,000,000, (ii)(A) unpermitted Releases, (B) the existence of any condition
that could reasonably be expected to result in violations of or Liabilities
under, any Environmental Law or (C) the commencement of, or any material change
to, any action, investigation, suit, proceeding, audit, claim, demand, dispute
alleging a violation of or Liability under any Environmental Law which in the
case of clauses (A), (B) and (C) above, in the aggregate for all such clauses,
would reasonably be expected to result in a Material Adverse Effect, (iii) the
receipt by any Credit Party of notification that any Property of any Credit
Party is subject to any Lien in favor of any Governmental Authority securing, in
whole or in part, Environmental Liabilities and (iv) any proposed acquisition or
lease of Real Estate, if such acquisition or lease would have a reasonable
likelihood of resulting in a Material Adverse Effect as a result of any
potential Environmental Liabilities;

(f)(i) on or prior to any filing by any ERISA Affiliate of any notice of any
reportable event under Section 4043 of ERISA, or intent to terminate any Title
IV Plan, a copy of such notice

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(ii) promptly, and in any event within ten (10) days, after any officer of any
ERISA Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a notice describing such waiver request and any
action that any ERISA Affiliate proposes to take with respect thereto, together
with a copy of any notice filed with the PBGC or the IRS pertaining thereto,
(iii) promptly, and in any event within ten (10) days after any officer of any
ERISA Affiliate knows or has reason to know that an ERISA Event has occurred, a
notice describing such ERISA Event, and any action that any ERISA Affiliate
proposes to take with respect thereto, together with a copy of any notices
received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit
Plan pertaining thereto; and (iv) promptly after the sending or filing thereof,
copies of any annual information report (including all actuarial reports and
other schedules and attachments thereto) required to be filed with a
Governmental Authority in connection with each Canadian Pension Plan that is
required by applicable law to be funded; promptly upon receipt, copies of any
notice, demand, inquiry or subpoena received in connection with any Canadian
Pension Plan from a Governmental Authority;

(g)any Material Adverse Effect subsequent to the date of the most recent audited
financial statements delivered to Collateral Trustee and Holders pursuant to
this Agreement;

(h)any material change in accounting policies or financial reporting practices
by the Company or any of its Subsidiaries, except as required by GAAP;

(i)any labor controversy resulting in or threatening to result in any strike,
work stoppage, boycott, shutdown or other labor disruption against or involving
Company or any of its Subsidiaries if the same would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(j)the creation, establishment or acquisition of any Subsidiary or the issuance
by or to any Credit Party of any Shares or Share Equivalents;

(k)any material notification, amendment, waiver, supplement or other
modification of any of the Prepetition Notes Documents, ABL Documents, the ABL
DIP Facility or the Factoring Facility Documents (accompanied by a true, correct
and complete copy thereof);

(l)if any Credit Party acquires any Margin Stock; and

(m)any event that results or could be reasonably expected to result in a
mandatory prepayment of the Obligations pursuant to Section 8.3.

Each notice pursuant to this Section 9.3 shall be in electronic form accompanied
by a statement by a Responsible Officer of the Company setting forth details of
the occurrence referred to therein, and stating what action the Company or other
Person proposes to take with respect thereto and at what time. Each notice under
Section 9.3 shall describe with particularity any and all clauses or provisions
of any Related Agreement that have been breached or violated.

Section 9.4.  Preservation of Corporate Existence, Etc.  The Company shall, and
shall cause each of its Subsidiaries to: 

 

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(a)preserve and maintain in full force and effect its organizational existence
and good standing under the laws of its jurisdiction of incorporation,
organization or formation, as applicable, except as permitted by Section 9.16;

(b)preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary in the normal conduct
of its business except in connection with any sale of assets permitted by
Section 9.16 and except as would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;

(c)preserve or renew all of its registered Trademarks, the non-preservation of
which would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect; and

(d)(i) conduct its business and affairs without the knowing infringement of or
knowing interference with any Intellectual Property of any other Person in any
material respect and (ii) shall comply in all material respects with the terms
of its IP Licenses.

Section 9.5.  Maintenance of Property.  The Company shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its Property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted and shall make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

Section 9.6.  Insurance.

(a)The Company shall, and shall cause each of its Subsidiaries to, (i) procure,
maintain or cause to be maintained in full force and effect all policies of
insurance of any kind with respect to the Property and businesses of the Company
and such Subsidiaries (including, without limitation, policies of fire, theft,
product liability, public liability, Flood Insurance, property damage, other
casualty, employee fidelity, workers’ compensation, business interruption,
director and officer liability (including tail coverage) and employee health and
welfare insurance) with financially sound and reputable insurance companies or
associations (in each case that are not Affiliates of the Company) of a nature
and providing such coverage as is sufficient and as is customarily carried by
businesses of the size and character of the business of the Credit Parties,
(ii) with respect to each of the Owned Properties, maintain or cause to be
maintained in full force and effect, in addition to the policies required under
clause (i)  above, the insurance policies and coverages described on Schedule
5.18, subject to changes in policies and coverages based upon the availability
of insurance for Persons engaged in ownership and operation of properties
similar to each of the Owned Properties and (iii) cause all such insurance
relating to any Property or business of any Credit Party to name Collateral
Trustee as additional insured or lenders loss payee as agent for the Holders, as
appropriate. All policies of insurance on real and personal Property of the
Credit Parties will contain an endorsement, in form and substance acceptable to
Collateral Trustee, showing loss payable to Collateral Trustee  (Form CP 1218 or
equivalent and naming Collateral Trustee as lenders loss payee as agent for the
Holders) and extra expense and business interruption endorsements. Such
endorsement, or an independent instrument furnished to Collateral Trustee, will
provide that the insurance companies will give Collateral Trustee at least

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thirty (30) days’ prior written notice before any such policy or policies of
insurance shall be altered or canceled and that no act or default of the Credit
Parties or any other Person shall affect the right of Collateral Trustee to
recover under such policy or policies of insurance in case of loss or damage.
 The Company shall deliver to Collateral Trustee and each Holder within ten
(10) days of receipt of notice from any insurer, a copy of any notice of
cancellation or material change in coverage with respect to the affected Owned
Property. The Company shall direct, and shall cause each Credit Party to direct,
all present and future insurers under its “All Risk” policies of property
insurance to pay all proceeds payable thereunder directly to the Collateral
Trustee.  If any insurance proceeds are paid by check, draft or other instrument
payable to any Credit Party and Collateral Trustee jointly, Collateral Trustee
may endorse such Credit Party’s name thereon and do such other things as
Collateral Trustee may deem advisable to reduce the same to cash. Collateral
Trustee reserves the right at any time, upon its determination that any Credit
Party’s risk profile has changed following the Closing Date, to require
additional forms or categories and limits of insurance (it being acknowledged
and agreed that, so long as the Credit Parties do not engage in any line of
business substantially different from those lines of business carried on by it
on the Closing Date, Collateral Trustee will not require policies of insurance
of a form or category materially different from those required by Collateral
Trustee as of the Closing Date). Notwithstanding the requirement in clause
(i) above, Flood Insurance shall not be required for (x) Real Estate not located
in a Special Flood Hazard Area, or (y) Real Estate located in a Special Flood
Hazard Area in a community that does not participate in the National Flood
Insurance Program.

(b)Unless the Company provides Collateral Trustee with evidence of the insurance
coverage required by this Agreement (including, Flood Insurance), Holders may
purchase insurance (including, Flood Insurance) at the Company’s expense to
protect Collateral Trustee’s and the Holders’ interests in the Company and its
Subsidiaries’ properties.  This insurance may, but need not, protect the Company
and its Subsidiaries’ interests. The coverage that Holders purchase may not pay
any claim that the Company or any of its Subsidiaries makes or any claim that is
made against the Company or such Subsidiary, as applicable, in connection with
said Property. The Credit Parties may later cancel any insurance purchased by
Holders, but only after providing Holders with evidence that there has been
obtained insurance as required by this Agreement. If Holders purchase insurance,
the Credit Parties will be responsible for the costs of that insurance,
including interest and any other expenses Holders may incur in connection with
the placement of insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance shall be added to the
Obligations. The costs of the insurance may be more than the cost of insurance
the Credit Parties may be able to obtain on their own.

Section 9.7.  Payment of Obligations.  Unless otherwise prohibited or excused by
the Bankruptcy Court or the Bankruptcy Code, the Company shall, and shall cause
each of its Subsidiaries to, pay, discharge and perform as the same shall become
due and payable or required to be performed:

 

(a)all material Tax liabilities, assessments and governmental charges or levies
upon it or its Property, unless (i) the same are being contested in good faith
by appropriate proceedings diligently prosecuted and for which adequate reserves
in accordance with GAAP or the accounting rules applicable to the Company or
such Subsidiary are being maintained by such Person; and (ii) the aggregate
amount of such liabilities secured by such Lien do not exceed $100,000;

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(b)all other lawful claims which, if unpaid, would by law become a Lien upon its
Property unless the same are being contested in good faith by appropriate
proceedings diligently prosecuted which stay the imposition or enforcement of
any Lien and for which adequate reserves in accordance with GAAP or the
accounting rules applicable to the Company or such Subsidiary are being
maintained by such Person;

(c)the performance of all obligations under any Contractual Obligation to which
the Company or any of its Subsidiaries is bound, or to which it or any of its
Property is subject, including the Related Agreements, except where the failure
to perform would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect; and

(d)payments to the extent necessary to avoid the imposition of a Lien with
respect to, (1) the involuntary termination of any underfunded Benefit Plan or
(2) any Canadian Pension Plan other than inchoate Liens for amounts required to
be remitted but not yet due pursuant to applicable Canadian federal or
provincial pension benefits standards legislation.

Section 9.8.  Compliance with Laws; Pension Plans and Benefit Plans.

 

(a)The Company shall, and shall cause each of its Subsidiaries to, comply with
all Requirements of Law of any Governmental Authority having jurisdiction over
it or its business, including all Requirements of Law applicable to the
ownership, use and operation of each of the Owned Properties and the Benefit
Plans, except where the failure to comply would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

(b)For each existing, or hereafter adopted, Canadian Benefit Plan and Canadian
Pension Plan, the Company shall ensure, and shall cause each Credit Party to
ensure, that all contributions are remitted in a timely fashion in accordance
with the terms thereof, any funding agreements and all applicable laws, except
as would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

Section 9.9.  Inspection of Property and Books and Records; Audits; Appraisals.

 

(a)The Company shall maintain, and shall cause each of its Subsidiaries to
maintain, books of record and account entries in conformity with GAAP
consistently applied.

(b)The Company shall, and shall cause each of its Subsidiaries to, with respect
to each owned, leased, or controlled property, during normal business hours and
upon reasonable advance notice (unless an Event of Default shall have occurred
and be continuing, in which event no notice shall be required and the Collateral
Trustee shall have access at any and all times during the continuance thereof):
(i) provide access to such property to the Collateral Trustee (who may be
accompanied by Holders and any of their Related Persons), as frequently as the
Required Holders determine to be appropriate; and (ii) permit the Collateral
Trustee (who may be accompanied by Holders and any of their Related Persons) to
conduct inspections and make extracts and copies (or take originals if
reasonably necessary) from all of the Company’s or such Subsidiary’s books and
records, and evaluate and make physical verifications of the Collateral in any
manner and through any medium that the Required Holders consider advisable, in
each instance, the expenses of the Collateral Trustee shall be paid by the
Company.   Each Credit Party which keeps records relating to Collateral in the
Province of Quebec shall at all times keep a duplicate copy thereof at a
location

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outside the Province of Quebec, as listed on Schedule 5.21.  Each Credit Party
which keeps records relating to Collateral in the Province of Quebec shall at
all times keep a duplicate copy thereof at a location outside the Province of
Quebec, as listed on Schedule 5.21

Section 9.10.  Use of Proceeds.  The Company shall use the proceeds of the Notes
(and proceeds in the Proceeds Account) solely as follows: (a) to pay the costs
of the administration of the Chapter 11 Cases, (b) to make payments required or
permitted under DIP Order and the Approved DIP Budget subject to the variance
permitted in the DIP Order (including with respect to the Carve-Out), (c) to
make payments required under the Note Purchase Documents, and with respect to a
portion of the proceeds from the initial issuance of the Notes, to make payments
under the Prepetition ABL Facility (as defined in the Interim DIP Order), and
(d) for working capital, capital expenditures and other general corporate
purposes not in contravention of any Requirement of Law and not in violation of
this Agreement or the other Note Purchase Documents. 

 

Section 9.11.  Cash Management Systems.    The Company shall, and shall cause
its Subsidiaries to, use commercially reasonable efforts to deliver a deposit
account and securities control agreement to the Collateral Trustee in form and
substance reasonably satisfactory to the Required Holders prior to entry of the
Final DIP Order with respect to the Proceeds Account and any other deposit or
securities accounts constituting Collateral;  provided that upon receipt of a
written request from the Required Holders,  the Company shall, and shall cause
its Subsidiaries to, deliver such control agreement to the Collateral Trustee
within 30 days after the receipt of such notice (as such time period may be
extended in the reasonable discretion of the Required Holders).

 

Section 9.12.  Further Assurances.    Promptly upon reasonable request by the
Collateral Trustee or Required Holders, the Company shall, and shall cause the
Guarantors to: (a) correct any material defect or error that may be discovered
in the execution, acknowledgment, filing or recordation of any Security Document
or other document or instrument relating to any Collateral, and (ii) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, agreements, deeds, certificates,
assurances and other instruments as the Collateral Trustee or Required Holders
may reasonably request from time to time in order to carry out more effectively
the purposes of the Note Purchase Documents, including without limitation, such
guaranty agreements, security agreement, mortgages, pledge agreements,
intercreditor agreements and collateral trust agreements in the forms requested
by Required Holders.   Notwithstanding the foregoing, the Company shall, and
shall cause the Guarantors to, (a) execute such documents and take such actions
as set forth on Schedule 4.12 (indicated therein as “post-closing”) within 14
days after the Closing Date (as may be extended by the Required Holders in their
sole discretion), (b) execute such amendments to this Agreement as the Required
Holders shall require prior to the entry of the Final DIP Order to add customary
terms relating to the addition of an agent or trustee for the benefit of the
Holders, including, without limitation, customary expense and indemnification
provisions from the Credit Parties and (c) take all customary actions to assist
the Purchasers with the syndication of their Commitments and Notes, including,
without limitation, retaining at the Company’s expense such agents and service
providers customarily used to manage syndications and solicitations, all prior
to the entry of the Final DIP Order or within such other time periods determined
by the Required Holders, which expenses shall be reasonable.  

 

Section 9.13.  [Reserved].

 

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Section 9.14.  Environmental Matters.  The Company shall, and shall cause each
of its Subsidiaries to, comply with, and maintain its Real Estate, whether
owned, leased, subleased or otherwise operated or occupied, in compliance with,
all applicable Environmental Laws (including by implementing any Remedial Action
necessary to achieve such compliance) or that is required by orders and
directives of any Governmental Authority except where the failure to comply
would not reasonably be expected to, individually or in the aggregate, result in
a Material Adverse Effect. Without limiting the foregoing, if an Event of
Default is continuing or if any Required Holders at any time has a reasonable
basis to believe that there exist violations of Environmental Laws by the
Company or any of its Subsidiaries or that there exist any Environmental
Liabilities, then the Company shall, and shall cause each Subsidiary to,
promptly upon receipt of request from Required Holders, cause the performance
of, and allow any designee of the Required Holders access to such Real Estate
for the purpose of conducting, such environmental audits and assessments,
including any necessary subsurface sampling of soil and groundwater, and cause
the preparation of such reports, in each case as Required Holders may from time
to time reasonably request. Such audits, assessments and reports, shall be
conducted and prepared by reputable environmental consulting firms reasonably
acceptable to Required Holders and shall be in form and substance reasonably
acceptable to Required Holders, all under procedures and protocol reasonably
designed to maintain the attorney/client privilege applicable to the results of
such audits and assessments.

 

Section 9.15.  Approved DIP Budget.  Subject to the variances permitted in the
DIP Order, the Company shall comply, and shall cause its Subsidiaries to comply,
with the Approved DIP Budget.

 

Section 9.16.  Case Milestones.  The Company shall, and shall cause its
Subsidiaries to, comply with the “Sale/Chapter 11 Milestones” set forth in
Paragraph 14(c) of the Interim DIP Order or the corresponding provision of the
Final DIP Order to occur within the timeframes specified therein.

 

Section 9.17.  DIP Notices, Pleadings and Motions.  The Company will, promptly
following the receipt thereof, deliver to the Collateral Trustee copies of all
letters of intent, expressions of interest, offers to purchase or draft purchase
agreements (together with subsequent drafts with material substantive changes)
with respect to a sale of substantially all of the Credit Parties’ Property.

 

Section 9.18.  [Reserved].  

 

Section 9.19.  Ordinary Course.  Notwithstanding anything herein to the
contrary, the Company shall act, and the Company shall ensure that each of its
Subsidiaries acts, only in the Ordinary Course of Business in all material
respects, except to the extent that deviation from the Ordinary Course of
Business in all material respects (a) is expressly required under the DIP Order,
(b) has been provided for in the Approved DIP Budget or (c) has been approved by
the Required Holders.

 

SECTION 10.NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

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Section 10.1.  Limitation on Liens.  The Company shall not, and the Company
shall not suffer or permit any of its Subsidiaries to, directly or indirectly,
make, create, incur, assume or suffer to exist any Lien upon or with respect to
any part of its Property, whether now owned or hereafter acquired, other than
the following (“Permitted Liens”):

 

(a)any Lien existing on the Property of the Company or any of its Subsidiaries
on the Petition Date and set forth in Schedule 10.1 securing Indebtedness
outstanding on such date and permitted by Section 10.5, including replacement
Liens on the Property currently subject to such Liens securing Indebtedness
permitted by Section 10.5;

(b)any Lien securing the Obligations created under any Note Purchase Document;

(c)Liens for Taxes (including real property Taxes) (i) which are not past due or
remain payable without penalty, or (ii) the non-payment of which is permitted by
Section 9.7;

(d)carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s
or other similar Liens arising in the Ordinary Course of Business which are not
past due or remain payable without penalty or which are being contested in good
faith and by appropriate proceedings diligently prosecuted, which proceedings
have the effect of preventing the forfeiture or sale of the Property subject
thereto and for which adequate reserves in accordance with GAAP are being
maintained;

(e)Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers’
compensation, unemployment insurance and other social security legislation
(including inchoate Liens for amounts required to be remitted but not yet due
pursuant to applicable Canadian federal or provincial pension standards
legislation) or to secure the performance of tenders, statutory obligations,
surety, stay, customs and appeals bonds, bids, leases, governmental contract,
trade contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money) or to
secure liability to insurance carriers;

(f)Liens consisting of judgment or judicial attachment liens with respect to
judgments the existence of which do not constitute an Event of Default;

(g)Survey exceptions, easements, rights-of-way, servitudes, sewers, electric
lines, telegraph and telephone lines, zoning and other recorded covenants,
conditions, restrictions, reservations, licenses, minor defects or other
irregularities in title, and other similar encumbrances incurred in the Ordinary
Course of Business which, either individually or in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere in any material respect with
the ordinary conduct of the businesses of the Company or any of its
Subsidiaries;

(h)Liens on any Equipment, Real Estate or other fixed assets acquired or held by
the Company or any of its Subsidiaries securing Indebtedness incurred or assumed
for the purpose of financing (or refinancing) all or any part of the cost of
acquiring, constructing or improving such Property and permitted under
Section 10.5; provided that (i) any such Lien attaches to such Property
concurrently with or within ninety (90) days after the acquisition thereof,
(ii) such Lien attaches solely to the Property so acquired, constructed or
improved in such transaction and the

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proceeds thereof, and (iii) the principal amount of the debt secured thereby
does not exceed 100% of the cost of such Property;

(i)Liens securing Capital Lease Obligations permitted under Section 10.5(d);

(j)any interest or title of a lessor or sublessor under any lease permitted by
this Agreement;

(k)Liens arising from the filing of precautionary UCC or PPSA financing
statements (or equivalents) with respect to any lease permitted by this
Agreement;

(l)non-exclusive licenses and sublicenses of Intellectual Property granted by a
Credit Party and leases or subleases (by a Credit Party as lessor or
sublessor) to third parties in the Ordinary Course of Business not interfering
with the business of the Company or any of its Subsidiaries;

(m)Liens in favor of collecting banks arising by operation of law under
Section 4-210 of the UCC or, with respect to collecting banks located in the
State of New York, under Section 4-208 of the UCC;

(n)Liens (including the right of set-off) in favor of a bank or other depository
institution arising as a matter of law encumbering deposits;

(o)Liens in favor of customs and revenue authorities arising as a matter of law
which secure payment of customs duties in connection with the importation of
goods in the Ordinary Course of Business;

(p)Liens securing the Prepetition Notes Obligations (including the Roll-Up
Obligations) subject to the Intercreditor Agreement, the Collateral Trust
Agreement and the DIP Order;

(q)with respect to any Owned Property, any Lien or other encumbrance existing on
the Closing Date covering such Owned Property and acceptable to Collateral
Trustee;

(r)Liens securing Real Alloy Germany’s obligations under the German Factoring
Facility;

(s)Liens on Property of any Foreign Subsidiary that is not a Credit Party
securing Indebtedness of such Foreign Subsidiary permitted under
Section 10.5(m);

(t)[reserved];

(u)the reservations, limitations, provisos and conditions expressed in any
original grants from the Crown of real or immovable property located in Canada,
which do not materially interfere with (i) the ordinary conduct of the business
of the applicable Person or (ii) the use and enjoyment of such real or immovable
property;

(v)[reserved];

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(w)Liens on cash and Cash Equivalents securing obligations arising under Hedging
Agreements entered into in the Ordinary Course of Business for bona fide hedging
purposes and not for speculative purposes; provided that the aggregate amount of
cash and Cash Equivalents subject to such Liens does not exceed $100,000 in the
aggregate at any time outstanding;

(x)Liens on unearned insurance premiums securing the financing thereof to the
extent permitted under Section 10.5(l) to the extent such Liens are in favor of
the applicable insurance carrier;

(y)Liens on Inventory and the proceeds thereof arising out of consignment,
bailment, title retention or similar arrangements for the sale of goods entered
into by the Company in the Ordinary Course of Business solely to the extent that
any such Inventory or proceeds subject to such Liens can be reasonably
identified by Collateral Trustee;

(z)[reserved];

(aa)customary options, put and call arrangements, rights of first refusal and
similar rights relating to Investments in joint ventures and partnerships so
long as such options, arrangements or rights relate solely to such joint
ventures and partnerships and the assets thereof;

(bb)Liens arising from precautionary UCC or PPSA financing statement filings on
Accounts sold pursuant to Permitted Supplier Financing Arrangements;

(cc)Liens securing the ABL Obligations subject to the Intercreditor Agreement; 

(dd)Liens securing the obligations under the ABL DIP Facility subject to the
Intercreditor Agreement and the DIP Order; and

(ee)Liens permitted by or granted pursuant to authority provided by the DIP
Order including, without limitation, the Carve-Out.

Section 10.2.  Disposition of Assets.  The Company shall not, and the Company
shall not suffer or permit any of its Subsidiaries to, directly or indirectly,
sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or
a series of transactions) any Property (including the assets or Shares of any
Subsidiary of the Company, whether in a public or a private offering or
otherwise, and accounts and notes receivable, with or without recourse) or enter
into any agreement to do any of the foregoing, except dispositions that fall
within at least one of the following exceptions:

 

(a)Dispositions in the Ordinary Course of Business to any Person, of
(i) Inventory, (ii) worn-out or surplus Equipment having a book value not
exceeding $2,500,000 in the aggregate in any Fiscal Year or (iii) any other
Equipment solely to the extent that such Equipment of a Credit Party is
exchanged for credit against the purchase price of replacement or other
Equipment for such Credit Party; provided, that in the case of clause (ii), the
proceeds of such Disposition are promptly (but, in any event, within thirty (30)
days of such Disposition) applied to the purchase price of replacement or other
Equipment or, if not so applied, then to the extent of any net cash proceeds
they shall be applied against the Obligations in accordance with Section 8.3;

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(b) [reserved];

(c)dispositions of Cash Equivalents in the Ordinary Course of Business and
(ii) conversions of Cash Equivalents into cash or other Cash Equivalents;

(d)dispositions of accounts receivable and related assets by (i) Real Alloy
Germany to the German Factoring Facility Purchaser in accordance with the German
Factoring Facility Documents and (ii) Mexican Subsidiaries to RA Canada pursuant
to the terms of the Mexican Receivables Purchase Documents;

(e)transfers of Property to a Credit Party by another Credit Party or by any
Subsidiary of a Credit Party and transfers of Property to a Subsidiary that is
not a Credit Party by a Subsidiary that is not a Credit Party;

(f)the lease or sublease in the Ordinary Course of Business of Real Estate;

(g)the sale in the Ordinary Course of Business of Accounts pursuant to any
Permitted Supplier Financing Arrangement; 

(h)a Sale to which the Required Holders have consented and which is consummated
in accordance with the terms of Section 9.16 and subject to the other terms and
conditions of the DIP Order;

(i)Liens permitted under Section 10.1 (to the extent constituting a transfer of
Property); and (ii) Restricted Payments made in compliance with Section 10.11;
and

(j)any other sale to which the Required Holders have consented and which is
approved by the Bankruptcy Court pursuant to orders in form and substance
reasonably acceptable to the Required Holders.

Section 10.3.  Consolidations, Mergers and Amalgamations.  The Company shall
not, and the Company shall not suffer or permit any of its Subsidiaries to
merge, amalgamate, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person except with the consent of the
Required Holders and in accordance with the “Sale/Chapter 11 Milestones” set
forth in Paragraph 14(c) of the Interim DIP Order or the corresponding provision
of the Final DIP Order.

 

Section 10.4.  Acquisitions; Loans and Investments.  The Company shall not, and
the Company shall not suffer or permit any of its Subsidiaries to, (i) purchase
or acquire any Shares or Share Equivalents, or any obligations or other
securities of, or any interest in, any Person, including the establishment or
creation of a Subsidiary, (ii)  make any Acquisitions, or any other acquisition
of all or substantially all of the assets of another Person, or of any business
or division of any Person, including by way of merger, consolidation or other
combination, or (iii)  make, purchase or acquire any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including the Company, any Affiliate of the Company or any Subsidiary of the
Company (the items described in clauses (i), (ii) and (iii) are referred to as
“Investments”), except for:

 

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(a)Investments in cash and Cash Equivalents;

(b)(i) Investments consisting of extensions of credit between the Credit Parties
and, subject to the approval by the Required Holders in their sole discretion,
by any Credit Party to any other Subsidiary of the Company that is not a Credit
Party;  provided, that (A) if any Person executes and delivers to any Credit
Party a note (collectively, the “Intercompany Notes”) to evidence any
Investments described in this clause (b), that Intercompany Note shall be
pledged and delivered to Collateral Trustee pursuant to the DIP Order and
the Security Documents as additional collateral security for the Obligations;
and (B) each Credit Party shall accurately record all intercompany transactions
on its books and records; and (ii) Investments consisting of intercompany loans
made by Real Alloy Canada Ltd (“RAC”) to the Company which are deemed made each
time RAC’s blocked deposit account is swept in connection with the ABL DIP
Facility to prepay obligations under the ABL DIP Facility or other ABL
Obligations (such intercompany loan being in the amount of such sweep and
repayment) which intercompany loans may be repaid by the Company with proceeds
of loans from the ABL DIP Facility in amounts not to exceed the amount of such
sweep and repayment; provided, that payments under such intercompany loans shall
be evidenced by a note pledged to the Holders under the Note Purchase Documents
and expressly subordinated to payments of the Obligations and the Prepetition
Notes Obligations on terms and conditions satisfactory to the Required
Holders.   

(c)extensions of credit to Real Industry, Inc. as expressly set forth in the
Approved DIP Budget for purposes of funding the Chapter 11 Debtors’ share of
certain shared services;

(d)Investments acquired in connection with the settlement of delinquent Accounts
in the Ordinary Course of Business or in connection with the bankruptcy or
reorganization of suppliers or customers;

(e)Investments existing on the Petition Date and set forth in Schedule 10.4;

(f)loans or advances to employees permitted under Section 10.6;

(g)Investments arising under Rate Contracts and Commodity Hedging Agreements
permitted under Section 10.5; and

(h)other Investments not described above in an aggregate amount not to exceed at
any time $100,000.

Section 10.5.  Limitation on Indebtedness.  The Company shall not, and the
Company shall not suffer or permit any of its Subsidiaries to, create, incur,
assume, permit to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except:

 

(a)the Obligations;

(b)Indebtedness consisting of Contingent Obligations (to the extent the same
constitute Indebtedness) permitted pursuant to Section 10.9;

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(c)Indebtedness existing on the Petition Date and set forth in Schedule 10.5
including Permitted Refinancings thereof;

(d)Indebtedness not to exceed an aggregate principal amount at any time
outstanding of $10,000,000, consisting of Capital Lease Obligations and
Permitted Refinancings thereof;

(e)intercompany Indebtedness permitted pursuant to Section 10.4(b);

(f)Indebtedness (1) existing on the Prepetition Date under the Prepetition Notes
Documents (including any such Indebtedness that becomes Roll-Up Obligations),
(2) existing on the Petition Date under the ABL Documents in an original
aggregate principal amount not to exceed $110,000,000.00, and (3) under the ABL
DIP Facility in an aggregate principal amount outstanding at any time after the
Petition Date not to exceed the excess of $110,000,000.00 over the principal
balance of the Prepetition ABL Obligations (as defined in the Interim DIP Order)
outstanding as of the applicable date of determination;

(g)Indebtedness under the Factoring Facility Documents as in effect on the date
hereof or as otherwise modified with the prior written consent of the Required
Holders and Permitted Refinancings thereof;

(h)Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits (including contractual and statutory
benefits) or property, casualty, liability or credit insurance, pursuant to
reimbursement or indemnification obligations to such Person, in each case
incurred in the Ordinary Course of Business; provided that upon the incurrence
of Indebtedness with respect to any such reimbursement obligations, such
obligations are reimbursed not later than thirty (30) days following such
incurrence;

(i)[reserved];

(j)Indebtedness incurred in the Ordinary Course of Business with respect to
surety and appeal bonds, performance bonds and other similar obligations, and in
the case of the Credit Parties, not to exceed $1,000,000 in the aggregate at any
time outstanding;

(k)Indebtedness arising from the honoring by a bank or other depository
institution of a check, draft or similar instrument drawn against insufficient
funds in the Ordinary Course of Business; provided that such Indebtedness is
extinguished within five (5) Business Days of its incurrence;

(l)Indebtedness consisting of the financing of insurance premiums in the
Ordinary Course of Business; provided that the aggregate principal amount
thereof does not exceed the annual premium amount and shall be secured only by
Liens permitted under Section 10.1(x); and

(m)Any prepetition Indebtedness of Foreign Subsidiaries of the Company that are
not Credit Parties that is outstanding as of the Petition Date and Permitted
Refinancings thereof. 

Section 10.6.  Employee Loans and Transactions with Affiliates.  The Company
shall not, and the Company shall not suffer or permit any of its Subsidiaries
to, enter into any transaction with any Affiliate of the Company or of any such
Subsidiary, except:

 

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(a)as expressly permitted by this Agreement, including Investments and
Restricted Payments expressly permitted by this Agreement;

(b)upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would be obtained in a comparable arm’s length transaction with
a Person not an Affiliate of the Company or such Subsidiary and, with respect to
any such transaction exceeding $100,000, which are disclosed in writing to
Collateral Trustee and each Holder;

(c)loans or advances to employees of Credit Parties for travel, entertainment
and relocation expenses and other ordinary business purposes in the Ordinary
Course of Business not to exceed $250,000 in the aggregate outstanding at any
time;

(d)employment agreements entered into in the Ordinary Course of Business, which
agreements shall provide for the payment of reasonable compensation for actual
services rendered and be approved by the board of directors of the Company or
applicable Subsidiary thereof, as appropriate, in good faith; and

(e)transactions permitted by Section 10.7. 

Section 10.7.  Management Fees and Compensation.  The Company shall not pay, and
the Company shall not permit any of its Subsidiaries to pay, any management,
consulting or similar fees to any Affiliate of any Credit Party or to any
officer, director or employee of any Credit Party or any Affiliate of any Credit
Party or pay or reimburse Parent or any of its Affiliates (other than a Credit
Party) for any costs, expenses and similar items except: 

 

(a)payment of reasonable compensation to officers and employees of any Credit
Party for actual services rendered to the Credit Parties and their Subsidiaries
in the Ordinary Course of Business;  

(b)payment of directors’ fees and reimbursement of actual out-of-pocket expenses
incurred in connection with attending board of director meetings not to exceed
with respect to all such items, $30,000 per Fiscal Quarter of the Company to the
extent set forth in the Approved DIP Budget; and

(c)payment to Parent of reasonable and ordinary out-of-pocket overhead,
insurance and other similar expenses incurred and actually paid by Parent to the
extent such expenses are allocated to the Credit Parties and their Subsidiaries
in the Ordinary Course of Business and pursuant to methodology reasonably
acceptable to Required Holders and reflected in the Approved DIP Budget.

Section 10.8.  Margin Stock; Use of Proceeds.  No Credit Party shall, and no
Credit Party shall suffer or permit any of its Subsidiaries to, use any portion
of the Notes proceeds and any proceeds in the Proceeds Account, directly or
indirectly, to (a) purchase or carry Margin Stock or repay or otherwise
refinance Indebtedness of any Credit Party or others incurred to purchase or
carry Margin Stock, or otherwise in any manner which is in contravention of any
Requirement of Law or in violation of this Agreement or (b) repay any ABL
Obligations except as provided in the Approved DIP Budget and except with
proceeds of the initial sale of the Notes in accordance with Section 2.

 

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Section 10.9.  Contingent Obligations.  The Company shall not, and the Company
shall not suffer or permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Contingent Obligations except in respect of the Obligations
and except:

 

(a)endorsements for collection or deposit in the Ordinary Course of Business;

(b)Rate Contracts and Commodity Hedging Agreements entered into in the Ordinary
Course of Business for bona fide hedging purposes and not for speculation;

(c)Contingent Obligations of the Company and its Subsidiaries existing as of the
Petition Date and listed on Schedule 10.9, including extension and renewals
thereof which do not increase the amount of such Contingent Obligations or
impose materially more restrictive or adverse terms on the Company or its
Subsidiaries as compared to the terms of the Contingent Obligation being renewed
or extended;

(d)Contingent Obligations arising under indemnity agreements to title insurers
to cause such title insurers to issue to Collateral Trustee title insurance
policies;

(e)Contingent Obligations arising with respect to customary indemnification,
adjustment or purchase or acquisition price or similar obligations in favor of
purchasers in connection with dispositions permitted under Section 10.2(g);

(f)[reserved];

(g)[reserved];

(h)Contingent Obligations arising under guaranties made in the Ordinary Course
of Business of obligations of any Subsidiary of the Company, which obligations
are otherwise permitted hereunder; provided that if such obligation is
subordinated to the Obligations, such guaranty shall be subordinated to the same
extent;

(i)Contingent Obligations arising under the Prepetition Notes Documents
(including, for the avoidance of doubt, the Collateral Trust Hedging
Obligations), the ABL Documents, the ABL DIP Facility or the Factoring Facility
Documents, in each case to the extent such Indebtedness or obligations are
permitted to be incurred in accordance under Section 10.5;

(j)intercompany guarantees, support agreements, keep-well agreements and other
similar Contingent Obligations made, entered into or incurred in connection with
a transaction subject to the Commodity Exchange Act by the Company or any of its
Subsidiaries that is an eligible contract participant (as defined in the
Commodity Exchange Act) for the benefit of the Company or any of its
Subsidiaries by virtue of such Person’s failure for any reason to constitute an
eligible contract participant; and

(k)other Contingent Obligations not exceeding $250,000 in the aggregate at any
time outstanding.

Section 10.10.  Compliance with ERISA, Pension and Benefits Plans.

 

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(a)The Company shall not cause or suffer to exist, with respect to any ERISA
Affiliate, (a) any event that could result in the imposition of a Lien on any
asset of the Company or any of its Subsidiaries with respect to any Title IV
Plan or Multiemployer Plan or (b) any other ERISA Event, that would, in the
aggregate, have a Material Adverse Effect.  The Company shall cause or suffer to
exist any event that could result in the imposition of a Lien with respect to
any Benefit Plan.

(b)The Company shall not cause or suffer to exist any event that could result in
the imposition of a Lien on any asset of the Company or any of its Subsidiaries
with respect to any Canadian Pension Plan that would have a Material Adverse
Effect. The Company shall ensure that no Credit Party establishes, contributes
to, or becomes liable under any Canadian Defined Benefit Pension Plan.

Section 10.11.  Restricted Payments.  The Company shall not, and the Company
shall not suffer or permit any of its Subsidiaries to, (i) declare or make any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any Share or Share Equivalent or
(ii) purchase, redeem or otherwise acquire for value any Share or Share
Equivalent now or hereafter outstanding (the items described in clauses (i)  and
(ii) above are referred to as “Restricted Payments”); except that:

 

(a)any Subsidiary or any Mexican Subsidiary may declare and pay dividends to any
U.S. Credit Party;

(b)any Canadian Subsidiary may declare and pay dividends or make trust
distributions to any Credit Party; 

(c)each Subsidiary of the Company may make direct and indirect distributions to
the Company; and

(d)for any taxable period in which the Company and/or any of its Subsidiaries is
a member of a consolidated, combined, unitary or similar type income tax group
of which Parent is the common parent (a “Tax Group”), the Company and its
Subsidiaries may make distributions, directly or indirectly, to the Company, the
Company may make distributions to Intermediate Holdings, provided that
Intermediate Holdings immediately passes along such distribution to Parent, for
the actual payment by Parent of federal, state, local and foreign income Taxes
then due and payable on account of the Company and its Subsidiaries and
attributable for periods after the Petition Date, including required estimated
payments, and franchise Taxes and other similar licensing expenses on account of
the Company and its Subsidiaries incurred in the Ordinary Course of Business for
periods after the Petition Date; provided that (x) the amount of such
distribution shall not be greater than the aggregate amount of such Taxes or
expenses that would have been due and payable by the Company and its relevant
Subsidiaries had the Company not filed a consolidated, combined, unitary or
similar type return as part of a Tax Group and (y) all such distributions shall
have been permitted under the Approved DIP Budget. 

Section 10.12.  Change in Business.  The Company shall not, and the Company
shall not permit any of its Subsidiaries to, engage in any line of business
different from those lines of

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business carried on by it on the Closing Date and any business reasonably
complementary or ancillary thereto.

 

Section 10.13.  Change in Structure.    The Company shall not, and the Company
shall not permit any of its Subsidiaries to, make any material changes in its
equity capital structure, issue any Shares or Share Equivalents or amend any of
its Organization Documents, in each case, in any respect which would be adverse
to the Holders.

 

Section 10.14.  Changes in Accounting, Name or Jurisdiction of Organization.
 The Company shall not, and the Company shall not permit any of its Subsidiaries
to, (i) make any significant change in accounting treatment or reporting
practices, except as required by GAAP, (ii) change the Fiscal Year or method for
determining Fiscal Quarters of any Credit Party or of any consolidated
Subsidiary of the Company, (iii) in the case of any Credit Party, change its
name as it appears in official filings in its jurisdiction of organization or
(iv) in the case of any Credit Party, change its jurisdiction of organization or
(v) in the case of any Credit Party, change (x) its registered office, chief
executive office or domicile (within the meaning of the Civil Code of Quebec),
or (y) warehouses or locations at which Collateral is held or stored or the
location of its material records concerning the Collateral, in the case of
clauses (iii), (iv) and (v), without at least twenty (20) days’ prior written
notice to Holders and the acknowledgement of Required Holders that all actions
required by Collateral Trustee, including those to continue the perfection of
its Liens, have been completed.

 

Section 10.15.  Amendments to Related Agreements.  The Company shall not, and
the Company shall not permit any of its Subsidiaries to, amend, supplement,
waive or otherwise modify any provision of, any Related Agreement (other than
(A) the Note Purchase Documents in accordance with the terms applicable thereto,
(B) the Prepetition Notes Documents or ABL Documents to the extent permitted by
the Intercreditor Agreement or in a manner that is not adverse to Collateral
Trustee or Holders, (C) the ABL DIP Facility in a manner that is not adverse to
Collateral Trustee or Holders and (D) the Factoring Facility Documents in a
manner that is not adverse to Collateral Trustee or Holders or which would not
reasonably be expected to have a Material Adverse Effect).

 

Section 10.16.  No Negative Pledges.

 

(a)The Company shall not, and the Company shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual restriction or encumbrance of any kind
on the ability of the Company or any of its Subsidiaries to pay dividends or
make any other distribution on any of such Person’s Shares or Share Equivalents
or to pay fees, including management fees, or make other payments and
distributions to the Company or any other Credit Party except any restrictions
contained in the Note Purchase Documents, the Prepetition Notes Documents, the
ABL Documents, the ABL DIP Facility or the Factoring Facility Documents, in each
case, as in effect on the date hereof.  The Company shall not, and the Company
shall not permit any of its Subsidiaries to, directly or indirectly, enter into,
assume or become subject to any Contractual Obligation prohibiting or otherwise
restricting the existence of any Lien upon any of its assets in favor of
Collateral Trustee, whether now owned or hereafter acquired except:

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(i)under the Note Purchase Documents, in each case, as in effect on the date
hereof or as amended, supplemented or otherwise modified from time to time with
the prior written consent of the Required Holders;

(ii)under the ABL Documents and the ABL DIP Facility, in each case, as in effect
on the date hereof or as amended, supplemented or otherwise modified from time
to time in accordance with Section 10.15;

(iii)under the Factoring Facility Documents, in each case, as in effect on the
date hereof or as amended, supplemented or otherwise modified from time to time
with the prior written consent of the Required Holders;

(iv)in connection with any document or instrument governing Liens permitted
pursuant to Sections 10.5 applicable to Capital Lease Obligations and purchase
money security interests; provided that any such restriction contained therein
relates only to the asset or assets subject to such permitted Liens;

(v)customary restrictions and conditions contained in any agreement relating to
the sale, assignment, lease, conveyance, transfer or other disposition of any
asset permitted under Section 10.2 pending the consummation of such sale,
assignment, lease, conveyance, transfer or other disposition;

(vi)restrictions imposed by any document or instrument relating to Indebtedness
incurred by a Foreign Subsidiary pursuant to Section 10.5 provided that any such
restriction contained therein is limited to such Foreign Subsidiary’s assets
pledged as security in connection with such Indebtedness; and

(vii)pursuant to restrictions existing solely under or by reason of applicable
Requirements of Law.

(b)The Company shall not, and the Company shall not permit any Credit Party to,
issue any Shares or Share Equivalents (i) if such issuance would result in an
Event of Default and (ii) unless such Shares and Share Equivalents are, pledged
to Collateral Trustee, for the benefit of the Holders, as security for the
Obligations, and the net proceeds are applied to the Obligations in accordance
with Section 8.3.

Section 10.17.  OFAC; Patriot Act; Anti-Money Laundering.  The Company shall
not, and the Company shall not permit any of its Subsidiaries to, fail to comply
with the laws, regulations and executive orders referred to in Sections 5.30 and
5.31.

 

Section 10.18.  Sale-Leasebacks.  The Company shall not, and the Company shall
not permit any of its Subsidiaries to, engage in a sale leaseback, synthetic
lease or similar transaction involving any of its assets.

 

Section 10.19.  Hazardous Materials.  The Company shall not, and the Company
shall not permit any of its Subsidiaries to, cause or suffer to exist any
Release of any Hazardous Material at, to or from any Real Estate that violates
any Environmental Law in an manner that could reasonably be expected to result
in a Material Adverse Effect.

 

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Section 10.20.  Prepayments of Other Indebtedness.  The Company shall not, and
the Company shall not permit any Credit Party to, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness prior to
its scheduled maturity (it being understood that all mandatory prepayments
triggered in the Ordinary Course of Business consistent with past practice are
permitted), other than:

 

(a)the Obligations;

(b)a  Permitted Refinancing of Indebtedness;

(c)prepayment of intercompany Indebtedness to Credit Parties or among non-Credit
Parties;

(d)prepayments of loans advanced under the ABL DIP Facility or Prepetition ABL
Facility, to the extent not prohibited by the Intercreditor Agreement or the DIP
Order; and

(e)payments as provided in any First Day Order and as set forth in the Approved
DIP Budget.

Section 10.21.  Use of Proceeds; Compliance with Approved DIP Budget. 

 

(a)The Company shall not, and the Company shall not permit any Credit Party to,
apply the proceeds of any Notes or proceeds from the Proceeds Account or the
proceeds of any loans under the ABL DIP Facility, whether directly or
indirectly, in a manner other than to the uses (including the type of expenses
and amounts) set forth in the Approved DIP Budget (subject to permitted variance
in the DIP Order) and the DIP Order.

(b)The Company shall comply with the Budget Covenants (as defined in the DIP
Order).  For the avoidance of doubt, nothing herein shall be construed as
consent to the retention of any of the Chapter 11 Debtors’ Professionals or the
Committee’s Professionals (each as defined in the Interim DIP Order) or the
terms of their engagement (including the terms of their compensation) or the
allowance of any professional fees or expenses of any of the Chapter 11 Debtors,
any Committee (as defined in the Interim DIP Order), any other official or
unofficial committee in the Chapter 11 Cases or any Successor Cases (as defined
in the Interim DIP Order), or of any other person or entity, or shall affect the
right of any DIP Secured Party or any Prepetition Secured Party (each as defined
in the Interim DIP Order) to object to the retention or terms of engagement of
any of the Debtors’ Professionals or the Committee’s Professionals or to the
allowance and payment of any of their respective fees and expenses, and no such
consent or waiver of right to object shall be implied from the inclusion in the
Approved DIP Budget of any such fees or expenses.

Section 10.22.  Ordinary Course.  Notwithstanding anything herein to the
contrary, the Company shall not, and the Company shall not permit any of its
Subsidiaries to, act in a manner that is not in the Ordinary Course of Business,
except to the extent that deviation from the Ordinary Course of Business is
expressly required under the DIP Order or provided for in the Approved DIP
Budget or to the extent operating in the Ordinary Course of Business in any
situation is prohibited because of an order of the Bankruptcy Court.

 

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Section 10.23.  Key Employees.  The Company shall not, and the Company shall not
permit any of its Subsidiaries to, enter into any agreements or arrangements
relating to any key employee incentive or retention plans or any similar officer
or employee bonus plans or programs, in each case without the prior written
consent of the Required Holders acting in their sole discretion.

 

Section 10.24.  Chief Restructuring Officer.    No later than fourteen (14)
calendar days after the Petition Date, the Company shall have selected and
retained, subject to Bankruptcy Court approval, a chief restructuring officer
reasonably acceptable to the Required Holders and the DIP ABL Agent (as defined
in the Interim DIP Order).

 

Section 10.25.  DIP Order.  The Company shall not, and shall not permit its
Subsidiaries to:

 

(a)seek, consent to or suffer to exist at any time any modification, stay,
vacation or amendment of the DIP Order, except for modifications and amendments
joined in or agreed to in writing by Required Holders;

(b)seek the use of “Cash Collateral” (as defined in the DIP Order) in a manner
inconsistent with the terms of the DIP Order without the prior written consent
of Required Holders;

(c)suffer to exist at any time a priority for any administrative expense or
unsecured claim against any Credit Party (now existing or hereafter arising of
any kind or nature whatsoever, including, without limitation, any administrative
expenses of the kind specified in Sections 105, 326, 328, 503((b), 506(c),
507(a), 507(b), 546(c), 552(b), 726 and 1114 of the Bankruptcy Code) or any
super priority claim which is equal or superior to the priority of the Holders
in respect of the Obligations or the Prepetition Notes Holders in respect of the
Prepetition Notes Obligations except as expressly permitted by the DIP Order; or

(d)prior to the date on which the Prepetition Notes Obligations and Obligations
have been paid in full, pay any administrative expenses, except administrative
expenses incurred in accordance with the Approved DIP Budget.

SECTION 11.    EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

Section 11.1.  Events of Default.  Any of the following shall constitute an
“Event of Default”:

 

(a)Non-Payment.  The Company fails (i) to pay when and as required to be paid
herein, any amount of principal of, or interest on, any Note, including after
maturity of the Notes, or (ii) to pay within three (3) Business Days after the
same shall become due, any fee or any other amount payable hereunder or pursuant
to any other Note Purchase Document;

(b)Representation or Warranty.  Any representation, warranty or certification by
the Company (including representations, warranties or certifications made by the
Company with

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respect to its Subsidiaries) made or deemed made herein, in any other Note
Purchase Document, or which is contained in any certificate, document or
financial or other statement by any such Person, or their respective Responsible
Officers, furnished at any time under this Agreement, or in or under any other
Note Purchase Document, shall prove to have been incorrect in any material
respect (without duplication of other materiality qualifiers contained
therein) on or as of the date made or deemed made;

(c)Specific Defaults.  The Company (or, to the extent provided for in this
Agreement, any Subsidiary or Affiliate of the Company) fails to perform or
observe any term, covenant or agreement contained in any of Sections 9.1,
9.2(a), 9.2(b), 9.2(g), 9.3(a), 9.6, 9.10, 9.12, 9.15, 9.16, or Section 10;

(d)Other Defaults.  The Company (or, to the extent provided for in this
Agreement, any Subsidiary or Affiliate of the Company) fails to perform or
observe any other term, covenant or agreement contained in this Agreement or any
other Note Purchase Document, and such default shall continue unremedied for a
period of fifteen (15) days after the earlier to occur of (i) the date upon
which a Responsible Officer of the Company (or, as applicable, Subsidiary or
Affiliate of the Company) becomes aware of such default and (ii) the date upon
which written notice thereof is given to the Company by Collateral Trustee or
Required Holders;

(e)Cross-Default.  (i) The occurrence of any “Termination Event” under the DIP
Order; (ii) the Company or any of its Subsidiaries (A) fails to make any payment
in respect of any (x) Indebtedness or (y) Contingent Obligation (other than, in
respect of both the foregoing clauses (x) and (y), Indebtedness or Contingent
Obligations that either (A) constitute Obligations or (B) are stayed as a result
of the filing of the Chapter 11 Cases or otherwise excused by the Bankruptcy
Code) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $1,000,000 when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the document relating thereto on the date of such
failure; or (B) fails to perform or observe any other condition or covenant, or
any other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Contingent Obligation (other
than Contingent Obligations owing by one Credit Party with respect to the
obligations of another Credit Party permitted hereunder), if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity (without regard to any subordination terms with
respect thereto), or such Contingent Obligation to become payable or cash
collateral in respect thereof to be demanded ( in each case unless stayed as a
result of the filing of the Chapter 11 Cases or otherwise excused by the
Bankruptcy Code), (iii) the occurrence and continuation of any event of default
under the ABL DIP Facility, or (iv) the occurrence and continuation of any event
of default under the Factoring Facility Documents.

(f)Insolvency; Voluntary Proceedings.  Any Subsidiary of the Company (other than
those Subsidiaries that are subject to the Chapter 11 Cases) (i) commences any
Insolvency Proceeding with respect to itself or (ii) takes any action to
effectuate or authorize the foregoing;

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(g)Involuntary Proceedings.  (i) Any involuntary Insolvency Proceeding is
commenced or filed against any Subsidiary of the Company (other than those
Subsidiaries that are subject to the Chapter 11 Cases), or any writ, judgment,
warrant of attachment, execution or similar process, is issued or levied against
a substantial part of such Person’s Property and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment, execution
or similar process shall not be released, vacated or fully bonded within sixty
(60) days after commencement, filing or levy; (ii) any such Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding
or an order for relief (or similar order under non-U.S. law) is ordered in any
such Insolvency Proceeding; or (iii) other than in connection with the Chapter
11 Cases, any Subsidiary of the Company or any of its Subsidiaries acquiesces in
the appointment of a receiver, interim receiver, receiver and manager, statutory
manager, administrator, trustee, monitor, custodian, conservator, liquidator
(whether provisional or otherwise), sequestrator, mortgagee in possession (or
agent therefor), or other similar Person for itself or a substantial portion of
its Property or business;

(h)Monetary Judgments.  One or more judgments, non-interlocutory orders, decrees
or arbitration awards shall be entered against any one or more of the Company
and its Subsidiaries involving in the aggregate a liability of $1,000,000 or
more (excluding amounts covered by insurance to the extent the relevant
independent third party insurer has not denied coverage therefor and, to the
extent stayed, amounts with respect to unsecured non-priority prepetition
claims), and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of thirty (30) days after the entry thereof; provided,
 however, that this clause (h) shall not apply to the DIP Order;

(i)Non-Monetary Judgments.  One or more non-monetary judgments, orders or
decrees shall be rendered against any one or more of the Company and its
Subsidiaries which has or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, and there shall be
any period of fifteen (15) consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; provided,  however, that this clause (i) shall not apply to the
DIP Order;

(j)Collateral.  Any material provision of any Note Purchase Document shall for
any reason cease to be valid and binding on or enforceable against the Company
or any of its Subsidiaries party thereto or the Company or any Subsidiary of the
Company shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or any Security Document shall for any reason (other
than pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest shall
for any reason cease to be a perfected and first priority security interest
subject only to Permitted Liens;

(k)Ownership.  Except in connection with the consummation of a Sale: (i) Parent
at any time fails to own beneficially, directly or indirectly, at least
fifty-one percent (51%) of the issued and outstanding voting Shares of
Intermediate Holdings; (ii) Intermediate Holdings ceases to own one hundred
percent (100%) of the issued and outstanding Shares and Share Equivalents of the
Company; (iii) the Company ceases to own one hundred percent (100%) of the
issued and outstanding Shares and Share Equivalents of its Subsidiaries (except
with respect to Subsidiaries for which the Company owns a lesser percentage
thereof  as set forth on Schedule 5.19) ), in each instance in this clause (k),
free and clear of all Liens, rights, options, warrants or other similar

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agreements or understandings, other than (A) Liens in favor of the Collateral
Trustee or otherwise for the benefit of the Holders, (B) Liens securing the
Prepetition Notes Obligations and (C) Liens securing the ABL Obligations;   

(l)Invalidity of Intercreditor Agreement or Collateral Trust Agreement.  Any
provision of the Intercreditor Agreement or Collateral Trust Agreement, shall
for any reason be revoked or invalidated by any Person, or otherwise cease to be
in full force and effect, or any Person shall contest in any manner the validity
or enforceability thereof or deny that it has any further liability or
obligation thereunder, or the Obligations, for any reason shall not have the
priority contemplated by this Agreement, the DIP Order, the Intercreditor
Agreement or the Collateral Trust Agreement, as applicable;

(m)There shall have occurred any of the following in any Chapter 11 Case:

(i)the filing of a motion, chapter 11 plan, or other pleading by any of the
Company or any of its Subsidiaries in any Chapter 11 Case or the entry of any
order by the Bankruptcy Court in any Chapter 11 Case: (x) to obtain additional
financing under Section 364(c) or (d) of the Bankruptcy Code not otherwise
permitted pursuant to this Agreement; (y) to grant any superpriority claim or
Lien other than Liens expressly permitted under the Note Purchase Documents upon
or affecting any Collateral or that is senior or equal to the Liens and security
interests granted to the Holders or in respect of the Prepetition Notes
Obligations, or any priority of the liens or security interests of the Holders
or in respect of the Prepetition Notes Obligations is contested by any Chapter
11 Debtor in any jurisdiction; or (z) except as provided in the DIP Order, to
use cash collateral of the Holders under Section 363(c) of the Bankruptcy Code
without the prior written consent of the Required Holders;

(ii)the filing by any of the Chapter 11 Debtors or their Affiliates of any
chapter 11 plan or disclosure statement attendant thereto (or, the proposal of,
support of or failure to oppose an unfiled plan), or any other direct or
indirect amendment to such plan or disclosure statement, by any of the Chapter
11 Debtors, which does not (A) contain a provision for repayment in full in cash
of all of the Obligations under this Agreement and all of the Prepetition Notes
Obligations and (B) provide for the Liens and security interests granted to the
Collateral Trustee for the benefit of the Holders until the Obligations have
been paid in full;

(iii)the entry of an order in any of the Chapter 11 Cases confirming a plan or
plans of reorganization that does not (A) contain a provision for repayment in
full in cash of all of the Obligations under this Agreement and all of the
Prepetition Notes Obligations and (B) provide for the Liens and security
interests granted to the Holders (or any Collateral Trustee for the benefit of
the Holders) until the Obligations have been paid in full;

(iv)the entry of an order amending, supplementing, staying, vacating or
otherwise modifying any Note Purchase Document in any case without the prior
written consent of the Required Holders, or in any manner that materially and
adversely affects the rights of the Holders under the Note Purchase Documents or
filing of a motion or

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proceeding by the Chapter 11 Debtors requesting authority to enter into such
amendment or modification without the consent of the Required Holders;

(v)institution of any judicial proceeding, or the filing of any motion by, or
supported by, any Chapter 11 Debtor seeking to challenge the validity or
enforceability of any portion of any Note Purchase Document, the Obligations,
the Prepetition Notes Documents or the Prepetition Notes Obligations, or which
seeks to void, avoid, limit, subordinate or otherwise adversely affect any
security interest created by or in relation to the Note Purchase Documents, the
Obligations, the Prepetition Notes Documents or the Prepetition Notes
Obligations, or the entry of any order of the Bankruptcy Court having any such
effect;

(vi)the payment of, or application by any Chapter 11 Debtor for authority to
pay, any prepetition claim without the Required Holders’ prior written consent
other than as provided in any First Day Order and as set forth in the Approved
DIP Budget or unless otherwise permitted under this Agreement;

(vii)the entry of an order by the Bankruptcy Court appointing, or the filing of
an application by the Chapter 11 Debtors, for an order seeking the appointment
of, in either case without the consent of the Required Holders, an interim or
permanent trustee in any Chapter 11 Case or the appointment of a receiver or an
examiner under section 1104 of the Bankruptcy Code in any Chapter 11 Case with
expanded powers (beyond those set forth in sections 1106(a)(3) and 1106(a)(4) of
the Bankruptcy Code) to operate or manage the financial affairs, the business,
or reorganization of any Chapter 11 Debtor or with the power to conduct an
investigation of (or compel discovery from) the Holders or against the
Prepetition Notes Trustee or Prepetition Notes Holders; or, except as permitted
in the DIP Order or otherwise with the consent of the Required Holders, the sale
or the filing of any motion to sell, a material portion of any Chapter 11
Debtor’s  (or their direct or indirect subsidiaries) assets including the equity
of any direct or indirect subsidiary either through a sale under section 363 of
the Bankruptcy Code, through a confirmed plan of reorganization in the Chapter
11 Cases, or otherwise that does not provide for a committed transaction
providing for payment in full in cash of the Obligations and all Prepetition
Notes Obligations at the closing of such sale;

(viii)the dismissal of any Chapter 11 Case which does not contain a provision
for payment in full in cash of all noncontingent monetary Obligations and all
Prepetition Notes Obligations, or if any Chapter 11 Debtor shall file a motion
or other pleading seeking the dismissal of any Chapter 11 Case which does not
contain a provision for payment in full in cash of all noncontingent monetary
Obligations of the Company hereunder and all Prepetition Notes Obligations;

(ix)the conversion of any Chapter 11 Case from one under chapter 11 to one under
chapter 7 of the Bankruptcy Code or any Chapter 11 Debtor shall file a motion or
other pleading seeking the conversion of any Chapter 11 Case under section 1112
of the Bankruptcy Code or otherwise;

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(x)the entry of an order by the Bankruptcy Court granting relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code to allow any
creditor to execute upon or enforce a Lien on any property, including
Collateral, with a value in excess of $100,000 in the aggregate;

(xi)(a) allowance of any claim or claims under Section 506(c) of the Bankruptcy
Code or otherwise against the Collateral Trustee, the Holders, the Prepetition
Notes Trustee, the Prepetition Notes Holders or any of the foregoing parties’
claims or Collateral, or (b) the filing by any Chapter 11 Debtor of any motion
supporting the allowance described in the foregoing clause (a);

(xii)the failure of any Chapter 11 Debtor to perform or comply in any material
manner with any term of the DIP Order;

(xiii)the payment of or granting adequate protection with respect to any
Prepetition Indebtedness other than adequate protection with respect to the
Prepetition Notes Obligations and the ABL Obligations on the terms forth in the
DIP Order or as otherwise agreed by the Required Holders;

(xiv)the Chapter 11 Debtors affirmatively support an application for any of the
orders described in this Section 11.1(m) or any subsection thereof made by any
Person other than the Collateral Trustee, the Prepetition Notes Trustee, the
Prepetition Notes Holders or the Holders; provided,  however, that the Chapter
11 Debtors shall not be deemed to have supported an application by providing
discovery (formally or informally) to any Person; provided further, however, the
Chapter 11 Debtors shall not be deemed to have supported any application  as a
result of actions of their employees acting in an individual capacity or any
capacity other than as a representative of the Chapter 11 Debtors;

(xv)any Chapter 11 Debtor’s filing of a motion requesting or supporting, or
entry of an order granting, authorizing or approving, any action adverse to the
Collateral Trustee, the Holders, the Prepetition Notes Trustee, or the
Prepetition Notes Holders or their rights and remedies or their interest in the
Collateral or the Prepetition Notes Collateral;

(xvi)the entry of an order by the Bankruptcy Court amending, supplementing,
staying, vacating, or otherwise modifying the DIP Order, the Bidding Procedures
Order, or the Sale Order (as each of those terms are defined in the DIP Order),
or any violation of any term or condition set forth in the DIP Order, the
Bidding Procedures Order, or the Sale Order, in each case without the prior
written consent of the Required Holders, or the filing by any Chapter 11 Debtor
of any motion or application seeking the entry of any such order without the
prior written consent of the Required Holders;

(xvii)the Chapter 11 Debtors fail to maintain sufficient cash, reserves and
projected borrowing capacity to pay all accrued administrative obligations and
administrative claims related to the Chapter 11 Cases when due;

(xviii)the termination, expiration, or shortening of the Chapter 11 Debtors’
exclusivity periods under Section 1121 of the Bankruptcy Code;

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(xix) (a) the cessation of Liens or super-priority claims granted with respect
to the Obligations or the Prepetition Notes Obligations to be valid, perfected
and enforceable in all respects, or (b) the Bankruptcy Court shall cease to have
exclusive jurisdiction with respect to all matters relating to the exercise of
rights and remedies under the Note Purchase Documents and the Collateral (unless
the Bankruptcy Court abstains from hearing any such matter or the reference from
the applicable United States District Court is withdrawn with respect to such
matter);

(xx)the entry of an order amending, supplementing, staying, vacating, or
otherwise modifying the Bidding Procedures Order or any Sale Order, or any
violation of any term or condition set forth in the Bidding Procedures Order or
any Sale Order, in each case without the prior written consent of the Collateral
Trustee and the Required Holders, or the filing by any Chapter 11 Debtor of any
motion or application seeking the entry of any such order without the prior
written consent of the Collateral Trustee and the Required Holders; or

(xxi)the Final DIP Order is not entered within thirty-five (35) days (or such
other period as the Required Holders may agree to in writing) following the
Petition Date.

SECTION 12.    REMEDIES ON DEFAULT, ETC.

Section 12.1.  Acceleration.  Subject to the terms of the DIP Order, without
relief from the automatic stay or any further order of the Bankruptcy Court:

 

(a)If an Event of Default described in Section 11.1(m)(ix) has occurred, all the
Notes then outstanding and all other Obligations shall automatically become
immediately due and payable and any outstanding Commitments shall be terminated.

(b)If any other Event of Default has occurred and is continuing, the Required
Holders may at any time at its or their option, by notice or notices to the
Company, terminate the Commitments and declare all the Notes and other
Obligations then outstanding to be immediately due and payable.

(c)If any Event of Default described in Section 11(a) or (b) has occurred and is
continuing, any Holder or Holders of Notes at the time outstanding affected by
such Event of Default may at any time, at its or their option, by notice or
notices to the Company, terminate its Commitments and declare all the Notes and
other Obligations held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus all accrued and unpaid interest
thereon (including interest accrued thereon at the Default Rate) shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.  The Company
acknowledges, and the parties hereto agree, that each Holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for).

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Section 12.2.  Other Remedies.  If any Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the Required Holders
may, subject to the terms of the DIP Order, this Agreement and any other
intercreditor, collateral or security documentation comprising the Note Purchase
Documents, proceed to protect and enforce the rights of the Holders by an action
at law, suit in equity or other appropriate proceeding, whether for the specific
performance of any agreement contained herein or in any Note Purchase Documents,
or for an injunction against a violation of any of the terms hereof or thereof,
or in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.

 

Section 12.3.  Rescission.  At any time after any Notes have been declared due
and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal on any Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue principal and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) neither the Company nor any other Person shall
have paid any amounts which have become due solely by reason of such
declaration, (c) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes.  No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

 

Section 12.4.  No Waivers or Election of Remedies, Expenses, Etc.  No course of
dealing and no delay on the part of any Holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such Holder’s rights, powers or remedies.  No right, power or remedy conferred
by any Note Purchase Documents upon any Holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.  Without limiting the
obligations of the Company under Section 15, the Company will pay to the Holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such Holder incurred in any enforcement or collection
under this Section 12, including reasonable attorneys’ fees, expenses and
disbursements.

 

Section 12.5.  Default Rate.  If any Event of Default has occurred and is
continuing, the Required Holders may, at their option, by notice to the Company
(which notice may be revoked at the option of the Required Holders
notwithstanding any provision of Section 17.1 requiring unanimous consent of the
Holders to changes in interest rates), declare that the Notes shall
bear  interest at the Default Rate.  After an Event of Default has been cured or
waived, the interest rate applicable to the Notes shall revert to the rates
applicable prior to the occurrence of an Event of Default. 

 

Section 12.6.  Application of Mandatory Prepayments and Collateral Proceeds.
 Subject to the terms of the Intercreditor Agreement, the Collateral Trust
Agreement and the DIP Order (including any Carve-Out payments) and Section 2
hereof, any prepayments required under Section 8.3 of this Agreement and any
proceeds of Collateral received by the Collateral

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Trustee or any Holder shall be applied to the Obligations: first, to all amounts
payable under Section 15.1; second, to the Holders for amounts due and unpaid on
the Notes for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal
and interest, respectively and third, to the payment of all other Obligations. 

 

Section 12.7.  Hearing on Event of Default.  Any enforcement of remedies
hereunder shall be subject the terms and conditions of the DIP Order.   

 

SECTION 13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; ASSIGNMENTS; AND
VOTING.

Section 13.1.  Registration of Notes.  The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes.  The name and address of each Holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register.  If any Holder of one or more Notes
is a nominee, then (a) the name and address of the beneficial owner of such Note
or Notes shall also be registered in such register as an owner and Holder
thereof and (b) at any such beneficial owner’s option, either such beneficial
owner or its nominee may execute any amendment, waiver or consent pursuant to
this Agreement.  Prior to due presentment for registration of transfer, the
Person in whose name any Note shall be registered shall be deemed and treated as
the owner and Holder thereof for all purposes hereof, and the Company shall not
be affected by any notice or knowledge to the contrary.  The Company shall give
to any Holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered Holders of Notes.

 

Section 13.2.  Transfer and Exchange of Notes; Assignment of Commitments.  Upon
surrender of any Note to the Company at the address and to the attention of the
designated officer (all as specified in Section 18(iii)), for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer accompanied by a written instrument of transfer duly executed by the
registered Holder of such Note or such Holder’s attorney duly authorized in
writing and accompanied by the relevant name, address and other information for
notices of each transferee of such Note or part thereof), within 5 Business Days
thereafter, the Company shall execute and deliver, at the Company’s expense
(except as provided below), one or more new Notes (as requested by the Holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
Commitment amount of the surrendered Note (or the outstanding amount of such
Note if Commitments have been terminated).  Each such new Note shall be payable
to such Person as such Holder may request and shall be substantially in the form
of Schedule 1.  Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon.  The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.    Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.  Notwithstanding anything in the Note Purchase Documents to the
contrary, no Holder or Purchaser shall assign any interest in its Notes or
Commitments to any Person unless (a) such assignee also holds Prepetition Notes
or will hold Prepetition Notes after giving effect to such assignment and any
related assignment of

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Prepetition Notes consummated at such time, (b) the aggregate principal amount
of Notes and Commitments to be held by such assignee as a percentage of the
total aggregate Notes and Commitments on the date of such assignment does not
exceed the percentage of Prepetition Notes held (or to be held) by such assignee
measured against the aggregate principal amount of Prepetition Notes outstanding
as of the date of such assignment (except in the case of the DDJ Holders), (c)
such Holder or Purchaser and assignee have completed (i) updated Purchaser
Schedules reflecting their respective Commitments after giving effect to such
assignment, (ii) a joinder to this Agreement in the form of Schedule 13.2 hereto
and (iii) such other customary assignment agreements, documents and/or
instruments to further evidence the  assignment as such assignor and assignee
shall require, (d) to the extent required, such assignee, in its capacity as a
Prepetition Notes Holder, has provided its consent to any amendment or
supplement to the Prepetition Notes Documents, to permit the transactions
contemplated by this Agreement and the other Note Purchase Documents, (e) any
assignment by a Holder of its Commitments and Notes to an assignee shall require
a concurrent ratable assignment to such assignee of the Prepetition Notes
(including Roll-Up Notes) held by such Holder.  Each of the Purchasers and
Holders agree that upon completion of the syndication of the Notes and
Commitments conducted by the Purchasers executing this Agreement on the date
hereof, the Purchasers and Holders will enter into such master assignment
agreement (or other similar agreements), together with updated Purchaser
Schedules, as may be required by such initial Purchasers to evidence the ratable
holdings of Notes and Commitments by the Purchasers and Holders.  

 

Section 13.3.  Replacement of Notes.  Upon receipt by the Company at the address
and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

 

(a)in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the Holder of such Note is, or is a nominee
for, an original Purchaser or another Holder of a Note with a minimum net worth
of at least $10,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b)in the case of mutilation, upon surrender and cancellation thereof,

within 10 Business Days thereafter, the Company at its own expense shall execute
and deliver, in lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.

Section 13.4.  Voting.  Each Holder agrees that it shall vote its Prepetition
Notes and Roll-Up Notes (a) in favor of any consent, amendment and/or waiver
under the Prepetition Notes Indenture that is required to permit the
transactions contemplated by the Note Purchase Documents and DIP Order, (b) in
the manner directed by Required Holders as to any matter that requires the
approval of both the Holders under this Agreement and the Prepetition Notes
Holders under the Prepetition Notes Indenture.

 

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Section 13.5.  Collateral Trustee.  Each Holder authorizes any Collateral
Trustee designated by the Required Holders to execute such Note Purchase
Documents as Required Holders shall require and to act at the direction of the
Required Holders.  Each Holder agrees to be bound by the terms of such Note
Purchase Documents approved by the Required Holders.   

 

SECTION 14.PAYMENTS ON NOTES.

 

Section 14.1.  [Reserved].

 

Section 14.2.  Payment by Wire Transfer.  So long as any Purchaser or its
nominee or any other Person shall be the Holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, interest and all
other amounts becoming due hereunder by the method and at the address specified
for such purpose below such Purchaser’s name in the Purchaser Schedule (or in
any other disclosure provided by any Holder), or by such other method or at such
other address as such Purchaser or Holder shall have from time to time specified
to the Company in writing for such purpose, without the presentation or
surrender of such Note or the making of any notation thereon, except that upon
written request of the Company made concurrently with or reasonably promptly
after payment or prepayment in full of any Note, such Holder shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1.  Prior to any sale
or other disposition of any Note held by a Holder or its nominee, such Holder
will, at its election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
13.2.  The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by a Holder under this Agreement and that has made the same agreement
relating to such Note as the Holders have made in this Section 14.2.

 

Section 14.3.    FATCA Information.  By acceptance of any Note, the Holder of
such Note agrees that such Holder will with reasonable promptness duly complete
and deliver to the Company, or to such other Person as may be reasonably
requested by the Company, from time to time (a) in the case of any such Holder
that is a United States Person, such Holder’s United States tax identification
number or other forms reasonably requested by the Company necessary to establish
such Holder’s status as a United States Person under FATCA and as may otherwise
be necessary for the Company to comply with its obligations under FATCA and (b)
in the case of any such Holder that is not a United States Person, such
documentation prescribed by applicable law (including as prescribed by section
1471(b)(3)(C)(i) of the Code) and such additional documentation as may be
necessary for the Company to comply with its obligations under FATCA and to
determine that such Holder has complied with such Holder’s obligations under
FATCA or to determine the amount (if any) to deduct and withhold from any such
payment made to such Holder.  Nothing in this Section 14.3 shall require any
Holder to provide information that is confidential or proprietary to such Holder
unless the Company is required to obtain such information under FATCA and, in
such event, the Company shall treat any such information it receives as
confidential.

 

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SECTION 15.EXPENSES, ETC.

Section 15.1.    Transaction Expenses and Indemnities.  Whether or not the
transactions contemplated hereby are consummated, the Company will pay all costs
and expenses including reasonable attorneys’ fees of counsel and local or other
counsel, financial advisors and consultants (provided that such fees and
disbursements shall not include fees and disbursements for more than one primary
counsel for the Required Holders, one regulatory counsel in each applicable
specialty and one local or foreign counsel for each relevant jurisdiction) for
the Required Holders and the other Holders incurred by the Required Holders in
connection with the Chapter 11 Cases and the negotiation and execution of the
Note Purchase Documents and Related Agreements and  any amendments, waivers or
consents under or in respect of any of the Note Purchase Documents and Related
Agreements (whether or not such amendment, waiver or consent becomes effective),
including: (a) the reasonable and documented costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any
rights under the Note Purchase Documents or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
the Note Purchase Documents, or by reason of being a Holder of any Note, (b) the
reasonable and documented costs and expenses, including legal counsel’s and
financial advisors’ fees, incurred in connection with the Chapter 11 Cases, (c)
the reasonable and documented fees, costs and expenses of the Collateral Trustee
and any indemnification of the Collateral Trustee pursuant to the Collateral
Trust Agreement and any other Note Purchase Documents, (d) the costs and
expenses required to be paid under the DIP Order, (e) the costs and expenses
incurred in connection with the initial filing of this Agreement and all related
documents and financial information with the SVO, and (f) the costs and expenses
incurred in connection with the preparation, negotiation and consummation of any
DIP Noteholders Credit Bid (as defined in the Interim DIP Order).   

 

The Company will pay, and will save each Purchaser and each other Holder of a
Note harmless from, (i) all claims in respect of any fees, costs or expenses, if
any, of brokers and finders (other than those, if any, retained by a Purchaser
or other Holder in connection with its purchase of the Notes), (ii) any and all
wire transfer fees that any bank or other financial institution deducts from any
payment under such Note to such Holder or otherwise charges to a Holder of a
Note with respect to a payment under such Note and (iii) any judgment,
liability, claim, order, decree, fine, penalty, cost, fee, expense (including
reasonable attorneys’ fees and expenses) or obligation resulting from the
consummation of the transactions contemplated hereby, including the use of the
proceeds of the Notes by the Company.

The Company and the Guarantors will indemnify, on a joint and several basis,
each Holder (including officers, directors, employees and agents of each Holder)
against any and all losses, liabilities, damages, claims or expenses, including
fees and expenses of counsel, including taxes incurred by it (under Section
15.2, if any), in each case arising out of or in connection with the Note
Purchase Documents, the Related Agreements and/or the Chapter 11 Cases,
including the costs and expenses of enforcing the Note Purchase Documents and
defending itself against any claim (whether asserted by the Company, the
Guarantors, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its gross
negligence or bad faith. 

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Section 15.2.    Certain Taxes.  The Company agrees to pay all stamp,
documentary or similar taxes or fees which may be payable in respect of the
execution and delivery or the enforcement of any of the Note Purchase Documents
or the execution and delivery (but not the transfer) or the enforcement of any
of the Notes in the United States or any other jurisdiction where the Company or
any Guarantor has assets or of any amendment of, or waiver or consent under or
with respect to, any of the Note Purchase Documents, and to pay any value added
tax due and payable in respect of reimbursement of costs and expenses by the
Company pursuant to this Section 15, and will save each Holder of a Note to the
extent permitted by applicable law harmless against any loss or liability
resulting from nonpayment or delay in payment of any such tax or fee required to
be paid by the Company hereunder.

 

Section 15.3.    Survival.  The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of any Note Purchase Documents, and the termination of
this Agreement.

 

SECTION 16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

 

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent Holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other Holder of a Note.  All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement.  Subject to the preceding sentence, this Agreement and the other Note
Purchase Documents embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.

SECTION 17.AMENDMENT AND WAIVER. 

 

Section 17.1.    Requirements.  This Agreement, the Security Documents, the
Intercreditor Agreement, the Collateral Trust Agreement and the Notes may be
amended, and the observance of any term hereof or in any such Note Purchase
Document  may be waived (either retroactively or prospectively), only with the
written consent of the Company and the Required Holders, except that:

 

(a)no amendment or waiver of any of Sections 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by such Purchaser in writing;

(b)no amendment or waiver may, without the written consent of each Purchaser and
the Holder of each Note at the time outstanding adversely affected by such
amendment or waiver, (i) subject to Section 12 relating to acceleration or
rescission, reduce the amount of principal of, or reduce the rate of interest or
method of computation of interest on, the Notes, (ii) change the percentage of
the principal amount of the Notes the Holders of which are required to consent
to any amendment or waiver, (iii) amend this Sections 17, (iv) amend Sections
8.4 or 12.6, or (v)

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consent to the assignment, delegation or other transfer by any Credit Party of
its rights and obligations under the Note Purchase Documents or release the
Credit Parties of their Obligations under the Note Purchase Documents, except in
connection with consummation of a Sale or except as provided in the DIP Order;
for avoidance of doubt, the maturity date of the Notes may be extended with the
prior written consent of solely the Required Holders and the Company; and

(c)no amendment or waiver to this Agreement that converts the Obligations into
an “exit” financing facility for the Chapter 11 Debtors will be effective as to
any Purchaser or Holder directly affected thereby unless consented to by such
Purchaser or Holder in writing.

Section 17.2.  Solicitation of Holders of Notes.

 

(a)Solicitation. The Company will provide each Holder of a Note with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such Holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Security Documents, the Intercreditor Agreement, the Collateral
Trust Agreement or the Notes.  The Company will deliver executed or true and
correct copies of each amendment, waiver or consent effected pursuant to this
Section 17 to each Holder of a Note promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
Holders of Notes.

(b)Payment. The Company will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security or provide other credit support, to any Holder
of a Note as consideration for or as an inducement to the entering into by such
Holder of any waiver or amendment of any of the terms and provisions hereof or
of the Security Documents, the Intercreditor Agreement, the Collateral Trust
Agreement or the Notes unless such remuneration is concurrently paid, or
security is concurrently granted or other credit support concurrently provided,
on the same terms, ratably to each Holder of a Note even if such Holder did not
consent to such waiver or amendment.       

Section 17.3.  Binding Effect, Etc.  Any amendment or waiver consented to as
provided in this Section 17 applies equally to all Holders of Notes and is
binding upon them and upon each future Holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver.  No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon.  No course of dealing between the
Company and any Holder of a Note and no delay in exercising any rights hereunder
or under any Note Purchase Document shall operate as a waiver of any rights of
any Holder of such Note.

 

Section 17.4.  Notes Held by Company, Etc.   Solely for the purpose of
determining whether the Holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, the Security
Documents, the Intercreditor Agreement, the Collateral Trust Agreement or the
Notes, or have directed the taking of any action provided herein or in any
Security Document, the Intercreditor Agreement, the Collateral Trust Agreement
or the Notes to be taken upon the direction of the Holders of a specified
percentage of the aggregate principal

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amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.

 

SECTION 18.NOTICES.

 

Except to the extent otherwise provided in Section 7.4, all notices and
communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by
an internationally recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by an internationally recognized overnight delivery service
(charges prepaid), or (d) by electronic communication (including e-mail and
Internet).  Any such notice must be sent:

(i)if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in the Purchaser Schedule, or at such
other address as such Purchaser or nominee shall have specified to the Company
in writing,

(ii)if to any other Holder of any Note, to such Holder at such address as such
other Holder shall have specified to the Company in writing, or

(iii)if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of Mr. Michael J. Hobey, Treasurer,  with copies, which
shall not constitute notice hereunder, sent to Mr. Gary S. Lee at Morrison &
Foerster LLP, 250 West 55th Street, New York, New York 10019 or via email at
GLee@mofo.com and to Mr. Darío  D.  Avram at Morrison & Foerster LLP, 425 Market
Street, San Francisco, California 94105 or via email at DarioAvram@mofo.com, or,
in each case, at such other address or email address as the Company shall have
specified to the Holder of each Note in writing.

(iv)Notices under this Section 18 will be deemed given only when actually
received.

SECTION 19.REPRODUCTION OF DOCUMENTS.

 

This Agreement and all documents relating thereto, including (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by any Purchaser at the Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to any Purchaser, may be reproduced by such Purchaser by any photographic,
photostatic, electronic, digital, or other similar process and such Purchaser
may destroy any original document so reproduced.  The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.  This Section 19 shall not prohibit the Company or any other Holder of
Notes from contesting any such reproduction to the same extent that it could
contest the original, or from introducing evidence to demonstrate the inaccuracy
of any such reproduction.

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SECTION 20.CONFIDENTIAL INFORMATION.

 

For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of any Credit Party or
any Subsidiary thereof in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
such Purchaser as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise
becomes known to such Purchaser other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to such
Purchaser that are otherwise publicly available.  Each Purchaser will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its auditors, financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with this Section 20, (iii) any other
Holder of any Note, (iv) any Institutional Investor to which it sells or offers
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by this Section 20), (v) any Person from which it offers
to purchase any Security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by this
Section 20), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to
information about such Purchaser’s investment portfolio, or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable to such
Purchaser, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under such Purchaser’s Notes, this Agreement or any Note Purchase
Document.  Each Holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this Section 20
as though it were a party to this Agreement.  On reasonable request by the
Company in connection with the delivery to any Holder of a Note of information
required to be delivered to such Holder under this Agreement or requested by
such Holder (other than a Holder that is a party to this Agreement or its
nominee), such Holder will enter into an agreement with the Company embodying
this Section 20.

In the event that as a condition to receiving access to information relating to
the Company or its Subsidiaries in connection with the transactions contemplated
by or otherwise pursuant to this Agreement, any Purchaser or Holder of a Note is
required to agree to a confidentiality undertaking (whether through IntraLinks,
another secure website, a secure virtual workspace or otherwise) which is
different from this Section 20, this Section 20 shall not be amended thereby

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and, as between such Purchaser or such Holder and the Company, this Section 20
shall supersede any such other confidentiality undertaking.

SECTION 21.SUBSTITUTION OF PURCHASER.

 

Each Purchaser shall have the right to substitute any one of its Affiliates (a
“Substitute Purchaser”) as the purchaser of the Notes that it has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser and such Substitute Purchaser, shall contain such
Substitute Purchaser’s agreement to be bound by this Agreement and shall contain
a confirmation by such Substitute Purchaser of the accuracy with respect to it
of the representations set forth in Section 6.  Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 21),
shall be deemed to refer to such Substitute Purchaser in lieu of such original
Purchaser.  In the event that such Substitute Purchaser is so substituted as a
Purchaser hereunder and such Substitute Purchaser thereafter transfers to such
original Purchaser all of the Notes then held by such Substitute Purchaser, upon
receipt by the Company of notice of such transfer, any reference to such
Substitute Purchaser as a “Purchaser” in this Agreement (other than in this
Section 21), shall no longer be deemed to refer to such Substitute Purchaser,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original Holder of the Notes under this
Agreement. 

SECTION 22.MISCELLANEOUS.

 

Section 22.1.  Successors and Assigns.  All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including
any subsequent Holder of a Note) whether so expressed or not, except that the
Company may not assign or otherwise transfer any of its rights or obligations
hereunder or under the Notes without the prior written consent of each
Holder.  Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto and their respective
successors and assigns permitted hereby) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

Section 22.2.  Accounting Terms.  All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to them
in accordance with GAAP.  Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP.  For purposes of determining compliance with this Agreement, any
election by the Company to measure any financial liability using fair value (as
permitted by Financial Accounting Standards Board Accounting Standards
Codification Topic No. 825-10-25 – Fair Value Option, International Accounting
Standard 39 – Financial Instruments: Recognition and Measurement or any similar
accounting standard) shall be disregarded and such determination shall be made
as if such election had not been made.

 

Section 22.3.  Severability.  Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Section 22.4.  Construction, Etc.  Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant.  Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

 

Defined terms herein shall apply equally to the singular and plural forms of the
terms defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be construed to have the same meaning and
effect as the word “shall.”  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein)
and, for purposes of the Notes, shall also include any such notes issued in
substitution therefor pursuant to Section 13, (b) subject to Section 22.1, any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Sections and Schedules shall be construed to refer to Sections of, and
Schedules to, this Agreement, and (e) any reference to any law or regulation
herein shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time.

Section 22.5.  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.  Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

 

Section 22.6.  Governing Law.  This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York, excluding choice‑of‑law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State, and, to the extent applicable, the Bankruptcy Code (except as
otherwise expressly provided therein).

 

Section 22.7.  Jurisdiction and Process; Waiver of Jury Trial.    

 

(a)The Company irrevocably submits to the non-exclusive jurisdiction of the
Bankruptcy Court, or if the Bankruptcy Court does not have or abstains from
jurisdiction, any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Notes.  To the fullest extent permitted
by applicable law, the Company irrevocably waives and agrees not to assert, by
way of motion, as a defense or otherwise, any claim that it is not subject to
the jurisdiction of any such court, any objection that it may now or hereafter
have to the laying of the venue of any such

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suit, action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

(b)The Company agrees, to the fullest extent permitted by applicable law, that a
final judgment in any suit, action or proceeding of the nature referred to in
Section 22.7(a) brought in any such court shall be conclusive and binding upon
it subject to rights of appeal, as the case may be, and may be enforced in the
Bankruptcy Court and the courts of the United States of America or the State of
New York (or any other courts to the jurisdiction of which it or any of its
assets is or may be subject) by a suit upon such judgment.

(c)The Company consents to process being served by or on behalf of any Holder of
Notes in any suit, action or proceeding of the nature referred to in
Section 22.7(a) by mailing a copy thereof by registered, certified, priority or
express mail (or any substantially similar form of mail), postage prepaid,
return receipt or delivery confirmation requested, to it at its address
specified in Section 18 or at such other address of which such Holder shall then
have been notified pursuant to said Section.  The Company agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid
personal service upon and personal delivery to it.  Notices hereunder shall be
conclusively presumed received as evidenced by a delivery receipt furnished by
the United States Postal Service or any reputable commercial delivery service.

(d)Nothing in this Section 22.7 shall affect the right of any Holder of a Note
to serve process in any manner permitted by law, or limit any right that the
Holders of any of the Notes may have to bring proceedings against the Company in
the courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.

(e)The parties hereto hereby waive trial by jury in any action brought on or
with respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith. 

Section 22.8.  Conflict.  In the event of a conflict between this Agreement and
the DIP Order, the DIP Order shall govern.

 

Section 22.9.  Guarantee and Security Grant. 

 

(a)Each Guarantor hereby irrevocably, unconditionally and jointly and severally
with the other Guarantors guarantees to each Holder the due and punctual payment
in full of the principal of and interest on, and any other amounts due under,
the Notes and all other Obligations when and as the same shall become due and
payable (whether at stated maturity or by required or optional prepayment or by
acceleration or otherwise).   Real Alloy Intermediate Holding, LLC shall not
engage in any business activities and does not own any assets other than (a)
ownership of the equity in the Company, (b) activities incidental to the
maintenance of its existence and (c) performance of its obligations under the
Note Purchase Documents and the Related Agreements to which it is a party.  

(b)The Company and each Guarantor hereby grant to the Collateral Trustee, if
any, and to Required Holders, in each case for the benefit of all Holders, to
secure the payment and

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performance in full of all of the Obligations, a security interest in and a lien
on, and pledges and assigns to the Collateral Trustee, if any, and Required
Holders, for the benefit of all Holders, the following properties, assets and
rights of the Company and Guarantors, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof:

(i)all personal, real and fixture property of every kind and nature including
all goods (including inventory, equipment and any accessions thereto),
instruments (including promissory notes), documents (including, if applicable,
electronic documents), accounts, chattel paper (whether tangible or electronic),
deposit accounts, letter-of-credit rights (whether or not the letter of credit
is evidenced by a writing), commercial tort claims, securities and all other
investment property, supporting obligations, any other contract rights or rights
to the payment of money, insurance claims and proceeds, all general intangibles
(including all payment intangibles and intellectual property), all interests in
Real Estate and all products and proceeds of any or all of the foregoing (as
used in this sub clause (i), all terms defined in the Uniform Commercial Code of
the state of New York used herein shall have the same definitions herein as
specified therein); and

(ii)all property specified as DIP Collateral under (and as defined in) the DIP
Order.

*    *    *    *    *

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

 

COMPANY:

 

 

 

REAL ALLOY HOLDING, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

GUARANTORS:

 

 

 

REAL ALLOY INTERMEDIATE HOLDING, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

REAL ALLOY BENS RUN, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

RA MEXICO HOLDINGS, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

REAL ALLOY RECYCLING,  INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

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REAL ALLOY SPECIALTY PRODUCTS, INC,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

 

 

REAL ALLOY SPECIFICATION,  INC,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

 

 

ETS SCHAEFER, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Michael Hobey

 

Name: Michael Hobey

 

Title: Chief Financial Officer

 

 

 

 

 

 

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This Agreement is hereby accepted and agreed to as of the date hereof.

 

 

Osterweis Strategic Income Fund

 

 

 

 

 

By:

/s/ Bradley Kane

 

Name: Bradley Kane

 

Title: Portfolio Manager

 

 

 

 

 

Osterweis Strategic Investment Fund

 

 

 

 

 

By:

/s/ Bradley Kane

 

Name: Bradley Kane

 

Title: Portfolio Manager

 

 

 

 

 

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This Agreement is hereby accepted and agreed to as of the date hereof.

 

 

 

Southpaw Credit Opportunity Master Fund LP

 

 

 

 

 

By:

/s/ Howard Golden

 

Name: Howard Golden

 

Title: Member of General Partner, Southpaw GP LLC

 

 

 

 

 

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This Agreement is hereby accepted and agreed to as of the date hereof.

 

 

 

Arch Investment Holdings IV Ltd.

 

 

 

By: HPS Investment Partners, LLC, Its Investment

 

Manager

 

 

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

 

 

 

 

 

Cardinal Fund, L.P.

 

 

 

By: HPS Investment Partners, LLC, as Investment Manager

 

 

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

 

 

 

 

 

Credit Value Master Fund 2016 Subsidiary, Ltd.

 

 

 

By: HPS Investment Partners, LLC, its Investment

 

Manager

 

 

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

 

 

 

 

 

Institutional Credit Fund Subsidiary, L.P.

 

 

 

By: HPS Investment Partners, LLC, its Investment

 

Manager

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

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This Agreement is hereby accepted and agreed to as of the date hereof.

 

 

 

Name of Purchaser: Watford Re Ltd.

 

 

 

By: HPS Investment Partners, LLC, its investment manager

 

 

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

 

 

 

 

 

Name of Purchaser: ZALICO VL Series Account-2

 

 

 

By: HPS Investment Partners, LLC, its investment manager

 

 

 

 

 

By:

/s/ Serge Adam

 

Name: Serge Adam

 

Title: Managing Director

 

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This Agreement is herebyaccepted and agreed to as of the date hereof.

 

 

Purchasers:

 

 

 

Stichting Pensioenfonds Hoogovens

 

 

 

By: DDJ Capital Management, LLC, on behalf of Stichting

 

Pensioenfonds Hoogovens, in its capacity as Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Stichting Bewaarder Syntrus Achmea Global High

 

Yield Pool

 

 

 

By: Achmea Investment Management, as asset manager

 

 

 

By: DDJ Capital Management, LLC, as subadvisor

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Caterpillar Inc. Master Retirement Trust

 

 

 

By: DDJ Capital Management, LLC, on behalf of

 

Caterpillar Inc. Master Retirement Trust, in its capacity as

 

investment manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

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Houston Municipal Employees Pension System

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

DDJ Capital Management Group Trust – High Yield

 

Investment Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

The 1199SEIU Health Care Employees Pension Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

National Railroad Retirement Investment Trust

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

69

 

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Principal Funds, Inc. – Global Diversified Income Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Sub-Advisor

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

District of Columbia Retirement Board

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Investment anager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

State-Boston Retirement System

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

investment manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Caterpillar Investment Trust

 

 

 

By: DDJ Capital Management, LLC, on behalf of

 

Caterpillar Investment Trust, in its capacity as investment manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

70

 

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Mercer QIF Fund plc - Mercer Investment Fund 1

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Sub-Investment Manager of, and on behalf of, Mercer

 

Investment Fund 1, a sub-fund of Mercer QIF Fund plc

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

DDJ Opportunistic High Yield Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity

 

as Investment Advisor

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

 

J.C. Penney Corporation, Inc. Pension Plan Trust

 

 

 

By: DDJ Capital Management, LLC, on behalf of J.C. Penney Corporation, Inc.
Pension Plan Trust, in its

 

Capacity as investment manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

The State of Connecticut Acting Through its Treasurer

 

 

 

By: DDJ Capital Management, LLC, in its capacity

 

as Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

71

 

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Northern Multi-Manager High Yield Opportunity Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity

 

as Sub-Advisor

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Sears Holdings Pension Trust

 

 

 

By: DDJ Capital Management, LLC, in its capacity

 

as Investment Manager

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

DDJ/TAF Strategic Income Fund, L.P.

 

 

 

By: DDJ/GP TAF Strategic Income, LLC, its

 

General Partner

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Russell Investments Institutional Funds, LLC High

 

Yield Bond Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity

 

as Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

72

 

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Russell Investments Global High Income Bond Pool

 

 

 

By: DDJ Capital Management, LLC, in its capacity as investment manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Russell Investments Company PLC Russell Global High

 

Yield Fund

 

 

 

By: DDJ Capital Management, LLC, on behalf of Russell Investment Company PLC
Russell Global High Yield Fund, in its capacity as Money Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Russell Investments Company – Russell Global

 

Opportunistic Credit Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity as

 

Money Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

Russell Investment Company – Russell Multi-Strategy

 

Income Fund

 

 

 

By: DDJ Capital Management, LLC, in its capacity as Money Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

73

 

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Sears Canada Inc. Registered Retirement Plan

 

 

 

By: DDJ Capital Management, LLC, in its

 

capacity as Investment Manager

 

 

 

 

 

By:

/s/ David J. Breazzano

 

Name: David J. Breazzano

 

Title: President

 

 

 

UAW Retiree Medical Benefits Trust

 

(GM Separate Retiree Account)

 

 

 

By: State Street Bank and Trust Company, solely in its capacity as Trustee  for
UAW Retiree Medical Benefits Trust (solely for the benefit of the GM Separate
Retiree Account), as directed by DDJ Capital Management, LLC, and not in its
individual capacity

 

 

 

 

 

By:

/s/ Manminder Singh Nagra

 

Name: Manminder Singh Nagra

 

Title: Assistant Vice President

 

 

 

74

 

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This Agreement is hereby accepted and agreed to as of the date hereof.

 

 

Hotchkis and Wiley High Yield Fund

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

Hotchkis and Wiley Capital Income Fund

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

San Diego County Employees Retirement Association

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

Santa Barbara County Employees Retirement System

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

National Elevator Industry Pension Plan

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as nvestment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

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

 

 

 

 

Texas County and District Retirement System

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

Government of Guam Retirement Fund

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

University of Dayton

 

 

 

By: Hotchkis and Wiley Capital Management, LLC

 

(H&W), as investment manager

 

 

 

By:

/s/ Anna Marie Lopez

 

Name: Anna Marie Lopez

 

Title: Chief Operating Officer of H&W

 

 

 

 

 

 

 

 

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Defined Terms

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

“ABL Agent” means Bank of America, N.A.

“ABL Agreement” means that certain Revolving Credit Agreement, dated as of March
14, 2017, by and among the Company, as Borrower Representative and a Borrower
(each as defined therein), the other Credit Parties (as defined therein) from
time to time party thereto, the Lenders (as defined therein) from time to time
party thereto, the ABL Agent, and the other persons from time to time party
thereto, as amended, restated, supplemented, or otherwise modified from time to
time, and as supplemented by any “debtor-in-possession” revolving facility by
and between the ABL Agent, as agent under such facility, certain lenders party
thereto from time to time and the Company and/or certain Subsidiaries and/or
Affiliates of the Company as borrowers and/or guarantors.

“ABL DIP Facility” means the “DIP ABL Facility” as defined in the DIP Order.

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

“ABL Obligations” means Obligations (as defined in the ABL Agreement).

“Account” means, as at any date of determination, all “accounts” (as such term
is defined in the UCC, PPSA or other applicable law, as applicable) and all
“claims” (for the purposes of the Civil Code of Quebec or other applicable law)
of the Credit Parties, including, the unpaid portion of the obligation of a
customer of a Credit Party in respect of Inventory purchased by and shipped to
such customer and/or the rendition of services by a Credit Party, as stated on
the respective invoice of a Credit Party, net of any credits, rebates or offsets
owed to such customer.

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of fifty percent (50%) of the
Shares and Share Equivalents of any Person or otherwise causing any Person to
become a Subsidiary of a Person, or (c) a merger, amalgamation or consolidation
or any other combination with another Person.

“Affiliate” means, with respect to any Person, each officer, director, general
partner or joint-venturer of such Person and any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such
Person; provided, however, that no Holder shall be an Affiliate of any Credit
Party or of any Subsidiary of any Credit Party solely by reason of the
provisions of the Loan Documents. For purposes of this definition, “control”
means the possession of either (a) the power to vote, or the beneficial
ownership of, 10% or more of the voting Shares of such Person (either directly
or through the ownership of Share Equivalents) or (b) the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.  
Notwithstanding the foregoing, none of Beck Aluminum International nor any of
its Affiliates shall be deemed to be an Affiliate of any Credit Party or any of
its Affiliates other than with respect to Sections 10.6 and 10.17.

Schedule A
(to Note Purchase Agreement)

 

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

 

 

“Agreement” means this Senior Secured Super-Priority Debtor-in-Possession Note
Purchase Agreement, including all Schedules attached to this Agreement.

“Approved DIP Budget” has the meaning given such term in the DIP Order.

“Backstop Party” (or “Backstop Parties”) is defined in Section 4.19.

“Bankruptcy Code” means title 11 of the United States Code entitled “Bankruptcy”
as now or hereafter in effect, or any successor statute. 

“Bankruptcy Court” is defined in the Preliminary Statements.

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Credit Party incurs or otherwise has any obligation or liability, contingent
or otherwise.

“Bidding Procedures Order” has the meaning given such term in the Interim DIP
Order.

“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be closed.

“Canadian AML Legislation” means the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada), the Criminal Code (Canada) and the United
Nations Act (Canada) and all regulations or executive orders passed thereunder.

“Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral
or written, formal or informal, funded or unfunded, insured or uninsured,
providing benefits primarily to Canadian employees, including medical, hospital
care, dental, sickness, accident, disability, life insurance, pension,
retirement or savings benefits, under which Credit Parties have any liability
with respect to any employee or former employee, but excluding any Canadian
Pension Plans.

“Canadian Defined Benefit Pension Plan” means a Canadian Pension Plan that
contains a “defined benefit provision” as such term is defined under the Income
Tax Act (Canada).

“Canadian Pension Event” means (a) the voluntary full or partial wind up of a
Canadian Pension Plan that is a registered pension plan by a Canadian
Subsidiary; (b) the institution of proceedings by any Governmental Authority to
terminate in whole or in part or have a trustee appointed to administer such a
plan; or (c) any other event or condition which could reasonably be expected to
constitute grounds for the termination of, winding up of, partial termination or
winding up of, or the appointment of a trustee to administer, any such plan.

“Canadian Pension Plans” means each pension plan required to be registered under
Canadian federal or provincial law that is maintained or contributed to by a
Credit Party primarily for its Canadian employees or former employees, but does
not include the Canada Pension Plan or the Quebec Pension Plan as maintained by
the Government of Canada or the Province of Quebec, respectively.

A-2

 

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“Canadian Subsidiary” means each Wholly-Owned Subsidiary of Intermediate
Holdings that is organized under the laws of Canada or any province or territory
thereof.

“Capital Lease” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, any Property by such Person as lessee
that has been or should be accounted for as a capital lease on a balance sheet
of such Person prepared in accordance with GAAP.

“Capital Lease Obligations” means, at any time, with respect to any Capital
Lease, any lease entered into as part of any sale leaseback transaction of any
Person or any synthetic lease, the amount of all obligations of such Person that
is (or that would be, if such synthetic lease or other lease were accounted for
as a Capital Lease) capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

“Carve-Out” has the meaning set forth in the DIP Order.

“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the United States
or Canadian federal government or (ii) issued by any agency of the United States
or Canadian federal government the obligations of which are fully backed by the
full faith and credit of the United States federal government or constitute a
charge upon the Consolidated Revenue Fund of Canada, as applicable, (b) any
readily-marketable direct obligations issued by any other agency of the United
States or Canadian federal government, any state, province or territory thereof
or any political subdivision of any such state, province or territory thereof or
any public instrumentality thereof, in each case having a rating of at least
“A-1” from Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation (“S&P” or at least “P-1” from Moody’s Investor Services, Inc.
(“Moody’s”), (c) any commercial paper rated at least “A-1” by S&P or “P-1” by
Moody’s and issued by any Person organized under the laws of any state of the
United States or Canada or any province or territory thereof, (d) any
Dollar-denominated or Canadian Dollar-denominated time deposit, insured
certificate of deposit, overnight bank deposit or bankers’ acceptance issued or
accepted by (i) any Holder or (ii) any other commercial or chartered bank that
is (A) organized under the laws of the United States or Canada, any state
thereof or the District of Columbia, (B) ”adequately capitalized” (as defined in
the regulations of its primary federal banking regulators) and (C) has Tier 1
capital (as defined in such regulations) in excess of $250,000,000 and
(e) shares of any United States or Canadian money market fund that (i) has
substantially all of its assets invested continuously in the types of
investments referred to in clause (a), (b), (c) or (d) above with maturities as
set forth in the proviso below, (ii) has net assets in excess of $500,000,000
and (iii) has obtained from either S&P or Moody’s the highest rating obtainable
for money market funds in the United States or Canada; provided, however, that
the maturities of all obligations specified in any of clauses (a), (b), (c) or
(d) above shall not exceed 365 days.

“Casualty Event” means any event that gives rise to the receipt by the Company
or any Guarantor of any insurance proceeds or condemnation awards in respect of
any equipment, fixed assets or real property constituting Collateral (including
any improvements thereon) to replace or repair such equipment, fixed assets or
real property. 

A-3

 

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“Chapter 11 Cases” means the chapter 11 cases of Intermediate Holdings, the
Company and certain Subsidiaries of the Company, which are being jointly
administered under the Bankruptcy Code and are pending in the Bankruptcy Court.

“Chapter 11 Debtors” means Intermediate Holdings, the Company and the
Subsidiaries of the Company subject to the Chapter 11 Cases.

“Closing” is defined in Section 3.

“Closing Date” means November 21, 2017.

“Code” means the Internal Revenue Code of 1986.

“Collateral” has the same meaning as the term “DIP Collateral” as defined in the
Interim DIP Order, including without limitation, all “Collateral” as defined in
any of the Security Documents and includes any other assets securing the
Obligations pursuant to the DIP Order.

“Collateral Trust Agreement”  means any collateral trust agreement entered into
after the date hereof among the Company, the Collateral Trustee, the Prepetition
Notes Trustee and the other parties named therein, as amended, restated or
otherwise modified from time to time, subject in the case of any conflict, to
the terms of the DIP Order. 

“Collateral Trustee” means such entity as the Required Holders shall designate,
which shall be the Required Holders until such time as another entity is
designated thereby, or any other Person, the Required Holders shall designate.

“Collateral Trust Hedging Obligations” means the “Collateral Trust Hedging
Obligations” (as defined in the Intercreditor Agreement).

“Commitment Percentage” means (a) with respect to the Interim Commitment of any
Purchaser, the percentage equal to such Purchaser’s Interim Commitment divided
by the Interim Commitments of all Purchasers and (b) with respect to the Final
Commitment of any Purchaser, the percentage equal to such Purchaser’s Final
Commitment divided by the Final Commitments of all Purchasers.  For avoidance of
doubt, as set forth in Section 1 hereof, the Commitment Percentages of the
Purchasers who execute and deliver this Agreement on the date hereof will be
ratably reduced to give effect to the aggregate Commitment Percentages of any
and all Subsequent Purchasers.

“Commitment Termination Date” means the earlier of (a) 10 Business Days prior to
the Maturity Date and (b) the date on which the Required Holders deliver written
notice to the Company terminating the Commitments, which may be delivered at any
time after the occurrence and during the continuance of an Event of Default.

“Commitments” means with respect to each Purchaser, the sum of the Interim
Commitments and Final Commitments of such Purchaser, in each case as set forth
in the Purchaser Schedule of such Purchaser.  The aggregate Commitments of all
Purchasers shall not exceed $85,000,000.

A-4

 

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“Commodity Hedging Agreements” shall any commodity contracts, including futures
contracts, forward contracts, options and other commodity related derivative
transactions or other arrangements similar to the foregoing or other
arrangements designed to protect against fluctuations in commodity prices.

“Company” is defined in the first paragraph of this Agreement.

“Confidential Information” is defined in Section 20.

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (a) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (b) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (c) under
any Rate Contracts or any Commodity Hedging Agreements; (d) to make take-or-pay
or similar payments if required regardless of nonperformance by any other party
or parties to an agreement; or (e) for the obligations of another Person through
any agreement to purchase, repurchase or otherwise acquire such obligation or
any Property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to maintain the solvency, financial condition or
any balance sheet item or level of income of another Person. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guarantied or otherwise supported or, if not a fixed and determined amount, the
maximum amount reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in
good faith.

“Contractual Obligations” means, as to any Person, any provision of any security
(whether in the nature of Shares, Share Equivalents or otherwise) issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument, document or agreement (other than a Note
Purchase Document) to which such Person is a party or by which it or any of its
Property is bound or to which any of its Property is subject.

“Copyrights” means all United States and foreign copyrights (whether or not the
underlying works of authorship have been published), including copyrights in
Software and all rights in and to databases, all designs (including industrial
designs, Protected Designs within the meaning of 17 U.S.C. 1301 et seq. and
Community designs), and all Mask Works (as defined under 17 U.S.C. 901 of the
U.S. Copyright Act), whether registered or unregistered, as well as all moral
rights, reversionary interests, and termination rights, and, with respect to any
and all of the foregoing, all registrations and applications therefor and all
related IP Ancillary Rights.

“CRA” means the Canada Revenue Agency.

“Credit Parties” means the Company and each Guarantor.

“DDJ Holders” means Holders managed by DDJ Capital Management, LLC

A-5

 

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

 

 

 “Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

“Default Rate” means that rate of interest per annum that is 2.0% above the rate
applicable to the Notes as set forth in Section 3.3.

“DIP Notes Syndication” is defined in Section 2.

“DIP Order” means the Interim DIP Order or the Final DIP Order, as applicable
under the circumstances.

“DIP Proposed Budget” is defined in Section 9.2(g).

“DIP Variance Report” shall mean the “variance report/reconciliation report”
referenced in Paragraph 2(i) of the Interim DIP Order. 

“Disposition” means the sale, lease, conveyance or other disposition of
Property.

“Disqualified Stock” means any Share or Share Equivalent which, by its terms (or
by the terms of any security or other Share into which it is convertible or for
which it is exchangeable), or upon the happening of any event or condition,
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the date that is ninety-one (91) days following the
Maturity Date, (b) is convertible into or exchangeable for (i) debt securities
or (ii) any Shares or Share Equivalents referred to in (a) above, in each case,
at any time on or prior to the date that is ninety-one (91) days following the
Maturity Date, or (c) is entitled to receive scheduled dividends or
distributions in cash prior to the time that the Obligations (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted) are paid in full in cash.

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

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

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

 “Environmental Laws” means all applicable and binding present and future
Requirements of Law and Permits imposing liability or standards of conduct for
or relating to the regulation and protection of human health, safety, the
workplace, the environment and natural resources, and including public
notification requirements and environmental transfer of ownership, notification
or approval statutes.

A-6

 

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“Environmental Liabilities” means all Liabilities (including costs of Remedial
Actions, natural resource damages and costs and expenses of investigation and
feasibility studies, including the related cost of environmental consultants and
the cost of attorney’s fees) that may be imposed on, incurred by or asserted
against any Credit Party or any Subsidiary of any Credit Party as a result of,
or related to, any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law or otherwise, arising under
any Environmental Law or in connection with any environmental, health or safety
condition or with any Release and resulting from the ownership, lease, sublease
or other operation or occupation of property by any Credit Party or any
Subsidiary of any Credit Party, whether on, prior or after the date hereof.

“Equipment” means all “equipment,” as such term is defined in the UCC, now owned
or hereafter acquired by any Credit Party, wherever located.

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

“ERISA Affiliate” means, collectively, any Credit Party and any Person under
common control or treated as a single employer with, any Credit Party, within
the meaning of Section 414(b), (c), (m) or (o) of the Code.

“ERISA Event” means any of the following: (a) a reportable event described in
Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been duly
waived under the applicable regulations, Section 4043(c) of ERISA) with respect
to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of
insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA; (e) the filing of a notice of intent
to terminate a Title IV Plan (or treatment of a plan amendment as
termination) under Section 4041 of ERISA; (f) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to
make any required contribution to any Title IV Plan or Multiemployer Plan when
due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or
Section 303 or 4068 of ERISA on any property (or rights to property, whether
real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or
any trust thereunder intended to qualify for tax exempt status under Section 401
or 501 of the Code; (j) a Title IV plan is in “at risk” status within the
meaning of Code Section 430(i); (k) a Multiemployer Plan is in “endangered
status” or “critical status” within the meaning of Section 432(b) of the Code;
and (l) any other event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of any material liability upon any ERISA Affiliate under
Title IV of ERISA other than for PBGC premiums due but not delinquent.

“Event of Default” is defined in Section 11.

“Extraordinary Receipts” means any cash received by the Company or any Guarantor
not in the ordinary course of business and including, without limitation, (i)
foreign, United States, state or local tax refunds, (ii) pension plan
reversions, (iii) proceeds of insurance (other than

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Casualty Events), (iv) proceeds of avoidance actions, (v) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action, and (vi) indemnity payments.

“Factoring Facility Documents” means, collectively, the German Factoring
Facility Documents.

“FATCA” means (a) sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and any intergovernmental
agreement entered into in connection with the implementation of the foregoing,
together with (in either case) any current or future regulations or official
interpretations thereof, (b) any treaty, law or regulation of any other
jurisdiction, or relating to an intergovernmental agreement between the United
States of America and any other jurisdiction, which (in either case) facilitates
the implementation of the foregoing clause (a), and (c) any agreements entered
into pursuant to section 1471(b)(1) of the Code.

“Federal Flood Insurance” means federally backed Flood Insurance available under
the National Flood Insurance Program to owners of real property improvements
located in Special Flood Hazard Areas in a community participating in the
National Flood Insurance Program.

“Final Commitment”  means with respect to each Purchaser, the “Final Commitment”
of such Purchaser designated on the Purchaser Schedule of such Purchaser.  The
aggregate Final  Commitments of all Purchasers shall not exceed $35,000,000.

“Final DIP Order” means an order or judgment of the Bankruptcy Court or any
other court of competent jurisdiction entered on the docket in the Chapter 11
Cases or the docket of such other court, which has not been modified, amended,
reversed, vacated or stayed and as to which (i) the time to appeal, petition for
certiorari, or move for a new trial, reargument or rehearing has expired and as
to which no appeal, petition for certiorari or motion for new trial, reargument
or rehearing shall then be pending or (ii) if an appeal, writ of certiorari, new
trial, reargument or rehearing thereof has been sought, such order or judgment
of the Bankruptcy Court or other court of competent jurisdiction shall have been
affirmed by the highest court to which such Order was appealed, or certiorari
shall have been denied, or a new trial, reargument or rehearing shall have been
denied or resulted in no modification of such Order, and the time to take any
further appeal, petition for certiorari or move for a new trial, reargument or
rehearing shall have expired, as a result of which such order shall have become
final in accordance with Rule 8002 of the Bankruptcy Rules; provided, that the
possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure,
or any analogous rule under the Bankruptcy Rules, may be filed relating to such
order, shall not cause such order not to be a Final DIP Order.

“First Day Order” means an order of the Bankruptcy Court granting, on an interim
or final basis, any customary “first day” or “second day” motions, applications,
or other requests filed by the Company and/or its Subsidiaries in the Chapter 11
Cases, provided that such “first day” or “second day” motions, applications, or
other requests and any order or orders granting them are, in form and substance,
satisfactory to the Required Holders.

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“Fiscal Quarter” means any of the quarterly accounting periods of the Credit
Parties, ending on March 31, June 30, September 30 and December 31 of each year.

“Fiscal Year” means any of the annual accounting periods of the Credit Parties
ending on December 31 of each year.

“Flood Insurance” means, for any Real Estate located in a Special Flood Hazard
Area, Federal Flood Insurance or private insurance reasonably satisfactory to
Required Holders, in either case, that (a) meets the requirements set forth by
FEMA in its Mandatory Purchase of Flood Insurance Guidelines, (b) shall include
a deductible not to exceed $50,000 and (c) shall have a coverage amount equal to
the lesser of (i) the “replacement cost value” of the buildings and any personal
property Collateral located on the Real Estate as determined under the National
Flood Insurance Program or (ii) the maximum policy limits set under the National
Flood Insurance Program.

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such
Person that is a “controlled foreign corporation” under Section 957 of the Code.

“GAAP” means (a) generally accepted accounting principles as in effect from time
to time in the United States of America and (b) for purposes of Section 9.6,
with respect to any Subsidiary, generally accepted accounting principles
(including International Financial Reporting Standards, as applicable) as in
effect from time to time in the jurisdiction of organization of such Subsidiary.

“German Factoring Facility” means the factoring facility between Real Alloy
Germany and the Factoring Facility Purchaser under the Factoring Facility
Documents with a maximum financing amount of €50,000,000.

“German Factoring Facility Documents” means, collectively, (a) that certain
Factoring Agreement between Real Alloy Germany and the German Factoring Facility
Purchaser, including each addendum and schedule thereto, (b) that certain Pledge
of Account and Trust Agreement between Real Alloy Germany and the German
Factoring Facility Purchaser and (c) all documents delivered to the German
Factoring Facility Purchaser in connection with any of the foregoing, in each
case, as amended, amended and restated, supplemented or otherwise modified from
time to time in accordance with this Agreement.

“German Factoring Facility Purchaser” means GE Capital Bank AG.

“Governmental Authority” means

(a)the government of

(i)the United States of America or any state or other political subdivision
thereof, or

(ii)any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties
of the Company or any Subsidiary, or

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(b)any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.

“Guarantor” means Intermediate Holdings and each Subsidiary of the Company that
has executed this Agreement as a Guarantor or otherwise executed a guaranty
agreement of the Obligations in favor of the Holders.

“Hazardous Material” means any substance, material or waste that is classified,
regulated or otherwise characterized under any Environmental Law as hazardous,
toxic, a contaminant or a pollutant, including, petroleum or any fraction
thereof, asbestos, polychlorinated biphenyls and radioactive substances.

“Hedging Agreement” means an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk, including each Commodity Hedging Agreement and
any Rate Contract.

“Holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1,
provided, however, that if such Person is a nominee, then for the purposes of
Sections 12, 17.2 and 18 and any related definitions in this Schedule A,
“Holder” shall mean the beneficial owner of such Note whose name and address
appears in such register.

“IMSAMET of Arizona” means IMSAMET of Arizona, an Arizona general partnership.

“Indebtedness” of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of Property or services (other than trade payables
entered into in the Ordinary Course of Business); (c) the face amount of all
letters of credit issued for the account of such Person and without duplication,
all drafts drawn thereunder and all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments issued
by such Person; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of Property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property); (f) all Capital Lease Obligations; (g) the principal
balance outstanding under any synthetic lease, off-balance sheet loan or similar
off balance sheet financing product; (h) all obligations of such Person, whether
or not contingent, in respect of Disqualified Stock, valued at, in the case of
redeemable preferred Shares, the greater of the voluntary liquidation preference
and the involuntary liquidation preference of such Shares plus accrued and
unpaid dividends; (i) all indebtedness referred to in clauses (a) through
(h) above

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secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness;
and (j) all Contingent Obligations.

“INHAM Exemption” is defined in Section 6.2(e).

“Initial Approved Budget” has the meaning given such term in the Interim DIP
Order.

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, concurso mercantile, liquidation, receivership, dissolution,
winding-up or relief of debtors, statutory management, administration,
suspension of general operations, creditor scheme of arrangement or similar
arrangement, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under U.S. federal,
state or foreign law, including the Bankruptcy Code, the Bankruptcy and
Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the
Winding-Up and Restructuring Act (Canada) and Mexican Insolvency Act (Ley de
Concursos Mercantiles).

“Institutional Investor” means (a) any Purchaser of a Note, (b) any Holder of a
Note, (c) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form, and (d) any Related Fund of any Holder of any
Note.

“Intellectual Property” means all rights, title and interests in or relating to
intellectual property and industrial property arising under any Requirement of
Law and all IP Ancillary Rights relating thereto, including all Copyrights,
Patents, Software, Trademarks, Internet Domain Names, Trade Secrets and IP
Licenses.

“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of
February 27, 2015 among the Collateral Trustee, Bank of America, N.A., as ABL
Agent (as defined therein), the Company and the Guarantors, as amended or
otherwise modified from time to time, including, without limitation, as amended
or otherwise modified by the DIP Order.

“Interest Payment Date” is defined in Section 3.3.

“Interim Commitment”  means with respect to each Purchaser who executes and
delivers this Agreement on the date hereof, the “Interim Commitment” of such
Purchaser designated on the Purchaser Schedule of such Purchaser.  The aggregate
Interim Commitments of all Purchasers shall not exceed $50,000,000.

 “Interim ABL DIP Order” is defined in Section 4.13.

“Interim DIP Order” means, collectively, the order(s) of the Bankruptcy Court
entered in the Chapter 11 Cases after an interim hearing under Bankruptcy Rule
4001(c)(2) or such other procedures as approved by the Bankruptcy Court, which
order(s) shall be satisfactory in form and

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substance to the Required Holders, in their sole discretion, and which order is
in effect and not stayed, together with all extensions, modifications, and
amendments thereto, in form and substance satisfactory to the Required Holders,
in their sole discretion, which, among other matters but not by way of
limitation, authorizes, on an interim basis, the Company to issue Notes  and
grant Liens under the Note Purchase Documents.

“Intermediate Holdings” is defined in the Preliminary Statements.

“Internet Domain Name” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
internet domain names.

“Inventory” means all of the “inventory” (as such term is defined in the UCC,
the PPSA or other applicable law, as applicable) of the Credit Parties,
including, but not limited to, all merchandise, raw materials, parts, supplies,
work-in-process and finished goods intended for sale, together with all the
containers, packing, packaging, shipping and similar materials related thereto,
and including such inventory as is temporarily out of a Credit Party’s custody
or possession, including inventory on the premises of others and items in
transit.

“IP Ancillary Rights” means, with respect to any Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals, reversions,
continuations, continuations-in-part, reissues, reexaminations, renewals and
extensions of, such Intellectual Property and all income, royalties, proceeds
and Liabilities at any time due or payable or asserted under or with respect to
any of the foregoing or otherwise with respect to such Intellectual Property,
including all rights to sue or recover at law or in equity for any past, present
or future infringement, misappropriation, dilution, violation or other
impairment thereof, and, in each case, all rights to obtain any other IP
Ancillary Right.

“IP License” means all Contractual Obligations (and all related IP Ancillary
Rights), whether written or oral, granting any right, title and interest in or
relating to any Intellectual Property.

“IRS” means the Internal Revenue Service of the United States and any successor
thereto.

“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses (including, those
incurred upon any appeal or in connection with the preparation for and/or
response to any subpoena or request for document production relating thereto),
in each case of any kind or nature (including interest accrued thereon or as a
result thereto and fees, charges and disbursements of financial, legal and other
advisors and consultants), whether joint or several, whether or not indirect,
contingent, consequential, actual, punitive, treble or otherwise.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or
otherwise), security interest or other security arrangement and any other
preference, priority or preferential arrangement of any kind or nature
whatsoever, including those created by, arising under or evidenced by any
conditional sale contract or other title retention agreement, the interest of a
lessor under a Capital

A-12

 

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Lease and any synthetic or other financing lease having substantially the same
economic effect as any of the foregoing.

“London Business Day” means a day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

“Material Adverse Effect”  means an effect that has or could reasonably be
expected to have a material adverse effect on any of (a) the condition
(financial or otherwise), business, performance, operations or Property of the
Credit Parties and their Subsidiaries taken as a whole; (b) the ability of any
Credit Party or any Subsidiary of any Credit Party to perform its respective
material obligations under any Note Purchase Document; or (c) the material
rights and remedies of Collateral Trustee and/or the Holders under any Note
Purchase Document; provided, however, in the case of each of clause (a), (b) and
(c), other than as a result of the events leading up to and resulting from the
continuation and prosecution of the Chapter 11 Cases.

“Maturity Date” means the earlier of (a) the date which is six months after the
Petition Date, as such date may be extended by the Required Holders (providing
that if such date is not a Business Day, the immediately preceding Business Day)
and (b) the date on which the Sale is consummated.

“Mexican Employee Benefit Plan” means any employee benefit plans, programs,
policies, arrangements and agreements, whether written or oral, including, but
not limited to, incentive compensation, retirement, pension, profit sharing,
deferred compensation, stock option or purchase plan, change in control,
severance, retention, bonus, employment, equity based compensation, disability,
life or other insurance plan, medical, welfare or fringe benefit plans,
programs, policies, funds, practices, arrangements and agreements, applicable
for any Mexican Subsidiary in respect of its Mexican employees.

“Mexican Subsidiary” means each Subsidiary Intermediate Holdings that is
organized under the laws of Mexico or any state, territory or other political
subdivision thereof.

“Multiemployer Plan” means any multiemployer plan, as defined in
Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or
otherwise has any obligation or liability, contingent or otherwise.

“NAIC” means the National Association of Insurance Commissioners.

“Note Purchase Date” means the date set forth in a Note Purchase Request on
which the Company is requesting amounts to be issued under the Notes.

“Note Purchase Documents” means the Agreement, the Notes, the Security
Documents, the Intercreditor Agreement, the Collateral Trust Agreement, the DIP
Order and all other documents, agreements and instruments executed in connection
therewith. 

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“Note Purchase Request” means an Officer’s Certificate setting forth the
principal amount of to be issued under the Notes, the date for such issuance and
otherwise conforming to the requirements of Sections 2 and  4.10.

“Notes” is defined in Section 1.

“Obligations” means all obligations of the Company under the Notes and all other
debts, liabilities, obligations, covenants and duties of the Company and each
Guarantor arising under the Note Purchase Documents, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising.  Without limiting the generality
of the foregoing, the Obligations of the Company and Guarantors under the Note
Purchase Documents include the obligation (including guarantee obligations) to
pay principal, interest, expenses, fees, indemnities and other amounts payable
by the Company and Guarantors under the Note Purchase Documents. 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.

“Ordinary Course of Business” means, in respect of any transaction involving any
Person, the ordinary course of such Person’s business, undertaken by such Person
in good faith and not for purposes of evading any covenant or restriction in any
Note Purchase Document.

“Organization Documents” means, (a) for any corporation, the certificate or
articles of incorporation, amalgamation or continuation, coordinated articles of
association or constitution as applicable, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation and any shareholder rights agreement, (b) for any company
incorporated in England & Wales, its certificate of incorporation and any
certificate of incorporation on change of name and its articles and memorandum
of association, (c) for any partnership, the partnership agreement and, if
applicable, certificate of limited partnership, (d) for any limited liability
company, the operating agreement and articles or certificate of formation or
(e) any other document setting forth the manner of election or duties of the
officers, directors, managers or other similar persons, or the designation,
amount or relative rights, limitations and preference of the Shares of a Person.

“Owned Properties” means all of the Real Estate described on Schedule 5.9.

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

“Parent” means Real Industry, Inc., a Delaware corporation.

“Patents” means all United States and foreign patents and certificates of
invention, industrial designs or similar industrial property rights,
applications for any of the foregoing, and related IP Ancillary Rights.

“Permits” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the

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force of law and applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

“Permitted Liens” is defined in Section 10.1.

“Permitted Refinancing” means Indebtedness constituting a refinancing or
extension of Indebtedness permitted under Sections 10.5(c), 10.5(d), 10.5(g),
10.5(m)  that (a) has an aggregate outstanding principal amount not greater than
the aggregate principal amount of the Indebtedness being refinanced or extended,
(b) has a Weighted Average Life to Maturity (measured as of the date of such
refinancing or extension) and maturity no shorter than that of the Indebtedness
being refinanced or extended, (c) is not entered into as part of a sale
leaseback transaction, (d) is not secured by a Lien on any assets other than the
collateral securing the Indebtedness being refinanced or extended, (e) the
obligors of which are the same as the obligors of the Indebtedness being
refinanced or extended, (f) is otherwise on terms no less favorable to the
Credit Parties and their Subsidiaries, taken as a whole, than those of the
Indebtedness being refinanced or extended and (g) is permitted by the DIP Order
and/or Bankruptcy Code.

“Permitted Supplier Financing Arrangement” means a transaction or transactions
whereby a Credit Party or Subsidiary thereof sells a portion of its Accounts at
the request of a customer of such Credit Party or Subsidiary (and, for the
avoidance of doubt, not with respect to Accounts of such Credit Party or
Subsidiary generally) in the Ordinary Course of Business and in existence prior
to the Closing Date without any modifications thereto without the approval by
the Required Holders in their sole discretion.

“Petition Date” means November 17, 2017.

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.

“PPSA” means  the Personal Property Security Act (Ontario) (or any successor
statute) or similar legislation of any other Canadian jurisdiction, including
the Civil Code of Québec, the laws of which are required by such legislation to
be applied in connection with the issue, perfection, enforcement, opposability,
priority, validity or effect of security interests in the Collateral.

“Prepetition ABL Facility” means the revolving facility under the ABL Agreement
that was in place prior to the Petition Date (and, for the avoidance of doubt,
shall not include the ABL DIP Facility).

“Prepetition Indebtedness”  means all Indebtedness of the Company and certain of
its Subsidiaries outstanding on the Petition Date immediately prior to the
filing of the Chapter 11 Cases.

“Prepetition Notes” means the notes issued under the Prepetition Notes Indenture
and shall include any Roll-Up Notes.

“Prepetition Notes Collateral” has the meaning given such term in the Interim
DIP Order.

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“Prepetition Notes Documents” has the meaning given such term in the Interim DIP
Order. 

“Prepetition Notes Holders” means the “Holders” (as defined in the Prepetition
Notes Indenture) and for the avoidance of doubt shall include holders of the
Roll-Up Notes.

“Prepetition Notes Indenture” means that certain Indenture, dated as of January
8, 2015, by and among the Company, as issuer, the “Guarantors” (as defined
therein) from time to time party thereto, and the Prepetition Notes Trustee, as
amended, restated, supplemented or otherwise modified from time to time,
including as amended in connection with the filing of the Chapter 11 Cases.

“Prepetition Notes Obligations” means the “Obligations” (as defined in the
Prepetition Notes Indenture) and for the avoidance of doubt shall include the
Roll-Up Obligations.

“Prepetition Notes Trustee” means Wilmington Trust, National Association, as
trustee and collateral trustee under the Prepetition Notes Indenture, and any
Persons that succeeds Wilmington Trust, National Association as such agent.

“Proceeds Account” means a deposit account in the name of the Company and
segregated from all of its other deposit accounts of the Credit Parties which
shall hold solely proceeds from the issuance and sale of Notes hereunder, which
deposit account shall be subject to the first priority perfected lien and
control of the Collateral Trustee.   

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and
delivered this Agreement to the Company and such Purchaser’s successors and
assigns (so long as any such assignment complies with Section 13.2), provided,
however, that any Purchaser of a Note that ceases to be the registered Holder or
a beneficial owner (through a nominee) of such Note as the result of a transfer
thereof pursuant to Section 13.2 shall cease to be included within the meaning
of “Purchaser” of such Note for the purposes of this Agreement upon such
transfer.

“Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the
Purchasers of the Notes, their respective Commitments and including their notice
and payment information (including such Purchasers’ email address for purposes
of Section 18).

“Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.

“QPAM Exemption” is defined in Section 6.2(d).

“RA Canada” means Real Alloy Canada Ltd.

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“Rate Contracts” means swap agreements (as such term is defined in Section 101
of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.

“Real Alloy Germany” means Real Alloy Germany GmbH, a limited liability company
organized under the laws of Germany.

“Real Estate” means any real estate or real property owned, leased, subleased or
otherwise operated or occupied by any Credit Party or any Subsidiary of any
Credit Party.

“Related Agreements” means the Note Purchase Documents, the Prepetition Notes
Documents, the ABL Documents and the ABL DIP Loan Documents (as defined in the
Interim DIP Order).

“Related Fund” means, with respect to any Holder of any Note, any fund or entity
that (a) invests in Securities or bank loans, and (b) is advised or managed by
such Holder, the same investment advisor as such Holder or by an affiliate of
such Holder or such investment advisor.

“Related Persons” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article II) and other
consultants and agents of or to such Person or any of its Affiliates.

“Releases” means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Material into or through the
environment.

“Remedial Action” means all actions required to (a) clean up, remove, treat or
in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.

“Required Holders” means at any time, collectively (a) the Holders of at least
50.1% in principal amount of the Notes and Commitments at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates) and (b)
so long as the DDJ Holders hold at least 15% of the outstanding Commitments and
outstanding principal amount of Notes, the DDJ Holders.

“Requirement of Law” means, with respect to any Person or any Property, the
common law and any federal, state, provincial, territorial, local, foreign,
multinational or international laws, statutes, codes, treaties, standards, rules
and regulations, guidelines, ordinances, orders, judgments, writs, injunctions,
decrees (including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case whether or not having the force of law and that are applicable to or
binding upon such Person or any of its Property

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or to which such Person or any of its Property is subject. For the avoidance of
doubt, the term “Requirement of Law” shall include FATCA and any
intergovernmental agreements with respect thereto between the United States and
another jurisdiction.

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the relevant
portion of this Agreement.

“Roll-Up Notes” has the meaning given the term “Roll Up DIP Notes” in the
Interim DIP Order.

“Roll-Up Obligations” has the meaning given the term “Roll Up DIP Notes
Obligations” in the Interim DIP Order.

“Sale” has the meaning given such term in the Interim DIP Order.

“Sale Order” has the meaning given such term in the Interim DIP Order.

“Subsequent Purchaser” has the meaning set forth in Section 1 hereof.

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

“Securities” or “Security” shall have the meaning specified in section 2(1) of
the Securities Act.

“Securities Act” means the Securities Act of 1933 and the rules and regulations
promulgated thereunder from time to time in effect.

“Security Documents” means, collectively, any security agreement, pledge
agreement, mortgages, control agreements or similar agreements, documents and
instruments granting Liens on the Collateral in favor of the Holders (or their
designee) to secure the Obligations.

“Senior Financial Officer” means the chief financial officer or treasurer of the
Company.

“Share” means all shares of capital stock (whether denominated as common stock
or preferred stock), equity interests, beneficial, partnership or membership
interests, joint venture interests, participations or other ownership or profit
interests in or equivalents (regardless of how designated) of or in a Person
(other than an individual), whether voting or non-voting.

“Share Equivalents” means all securities convertible into or exchangeable for
Shares or any other Share Equivalent and all warrants, options or other rights
to purchase, subscribe for or otherwise acquire any Share or any other Share
Equivalent, whether or not presently convertible, exchangeable or exercisable.

“Software” means (a) all computer programs, including source code and object
code versions, (b) all data, databases and compilations of data, whether machine
readable or otherwise, and (c) all documentation, training materials and
configurations related to any of the foregoing.

“Source” is defined in Section 6.2.

A-18

 

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“Special Flood Hazard Area” means an area that FEMA’s current flood maps
indicate has at least a one percent (1%) chance of a flood equal to or exceeding
the base flood elevation (a 100-year flood) in any given year.

Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company, association or other entity, the
management of which is, directly or indirectly, controlled by, or of which an
aggregate of more than fifty percent (50%) of the voting Shares is, at the time,
owned or controlled directly or indirectly by, such Person or one or more
Subsidiaries of such Person; provided that, with respect to any Person
incorporated in the United Kingdom, “Subsidiary” shall include a subsidiary
within the meaning of Section 1162 of the U.K. Companies Act 2006.  Unless the
context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Company.

“Substitute Purchaser” is defined in Section 21.

“SVO” means the Securities Valuation Office of the NAIC.

“Tax Affiliate” means, (a) the Company and its Subsidiaries, and (b) any
Affiliate of the Company with which the Company files or is eligible to file
consolidated, combined or unitary Tax returns.

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

“Title IV Plan” means a pension plan, other than a Multiemployer Plan, covered
by Title IV of ERISA, and to which Company, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability (contingent or otherwise).

“Trade Secrets” means all trade secrets and all other confidential or
proprietary information and know-how whether or not the foregoing has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or referring in any way to the foregoing, including
all related IP Ancillary Rights.

“Trademark” means all United States and foreign trademarks, trade names, trade
dress, corporate names, company names, business names, fictitious business
names, service marks, certification marks, collective marks, logos, other source
or business identifiers, designs and general intangibles of a like nature,
whether or not registered, and with respect to any and all of the foregoing, all
registrations and applications therefor and all related IP Ancillary Rights.

“UCC” means the Uniform Commercial Code of the State of New York.

“United States Person” has the meaning set forth in Section 7701(a)(30) of the
Code.

“U.S. Credit Parties” means the Company and each U.S. Subsidiary that is a
Guarantor.

“U.S. Subsidiary” means each Subsidiary of the Company that is organized under
the laws of any state of the United States or the District of Columbia.

A-19

 

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“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment or
other required payments of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (b) the then outstanding principal amount of such Indebtedness; provided that
for purposes of determining the Weighted Average Life to Maturity of any
Indebtedness that is being modified, refinanced, refunded, renewed, replaced or
extended, the effects of any prepayments made on such Indebtedness prior to the
date of the applicable extension shall be disregarded.

“Wholly-Owned Subsidiary” of a Person means any Subsidiary of such Person, all
of the Shares and Share Equivalents of which (other than directors’ qualifying
Shares required by law) are owned by such Person, either directly or through one
or more Wholly-Owned Subsidiaries of such Person.

 

 

A-20

 

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[Form of Note]

Real Alloy Holding, Inc.

Senior Secured  Note

[Date]

$[_______]1

For Value Received, the undersigned, Real Alloy Holding, Inc. (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [____________], or registered assigns, the
principal sum of [_____________________] Dollars, or, if less, the aggregate
unpaid principal amount of all purchases made by [___________]  under the Note
Purchase Agreement  referred to below (or so much thereof as shall not have been
prepaid) on the Maturity Date, with interest (computed on the basis of a 360-day
year of twelve 30‑day months) (a) on the unpaid balance hereof at the interest
rate set forth in the Note Purchase Agreement (defined below) from the date
hereof, payable monthly as further set forth in the Note Purchase Agreement,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law, (x) on any overdue payment of interest and (y) during
the continuance of an Event of Default if elected under Section 12.5 of the Note
Purchase Agreement, on such unpaid balance, at a rate per annum equal to the
Default Rate, payable as set forth in the Note Purchase Agreement as aforesaid
(or, at the option of the registered Holder hereof, on demand).

Payments of principal of and interest on with respect to this Note are to be
made in lawful money of the United States of America as provided in the Note
Purchase Agreement referred to below.

This Note is one of a series of Senior Secured Super-Priority
Debtor-in-Possession Senior Notes  (herein called the “Notes”) issued pursuant
to the Senior Secured Super-Priority Debtor-In-Possession Note Purchase
Agreement, dated November 21, 2017 (as from time to time amended, the “Note
Purchase Agreement”), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof.  Each Holder of this Note will
be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made
the representation set forth in Section 6.2 of the Note Purchase
Agreement.  Unless otherwise indicated, capitalized terms used in this Note
shall have the respective meanings ascribed to such terms in the Note Purchase
Agreement.

 

 

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1 Full amount of Commitment

Note
(to Note Purchase Agreement)

 

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This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer accompanied by a
written instrument of transfer duly executed, by the registered Holder hereof or
such Holder’s attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of, the
transferee.  Prior to due presentment for registration of transfer, the Company
may treat the Person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.

This Note is subject to optional and mandatory prepayment, in whole or from time
to time in part, at the times and on the terms specified in the Note Purchase
Agreement.

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner provided in the
Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the Holder of this Note shall be governed by, the law of the
State of New York, excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State, and, to the extent applicable, the Bankruptcy Code (except as otherwise
expressly provided therein)..

 

Real Alloy Holding, Inc.

 

 

 

 

 

 

 

By

 

 

      [Title]

 

 

 

 

-2-

 

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Form of Purchaser Schedule

Real Alloy Holding, Inc.

25825 Science Park Drive, Suite 400

Beachwood, Ohio 44122

Information Relating to Purchasers

 

Name and Address of Purchaser

Principal Amount of
Notes to be Purchased

 

[Name of Purchaser]

$

(1)

All payments by wire transfer of immediately available funds to:

 

with sufficient information to identify the source and application of such
funds.

 

(2)

All notices of payments and written confirmations of such wire transfers:

 

(3)

E-mail address for Electronic Delivery:

 

 

 

 

(4)

All other communications:

 

(5)

U.S. Tax Identification Number:

 

(6)

Interim  Commitment

 

(7)

Final Commitment

 

 

Purchaser Schedule
(to Note Purchase Agreement)

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