Exhibit 10.6

TERM GUARANTEE AGREEMENT

dated as of

April 13, 2017

among

THE GUARANTORS PARTY HERETO

and

ROYAL BANK OF CANADA,

as Term Collateral Agent

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TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS

     1  

SECTION 1.01. Credit Agreement

     1  

SECTION 1.02. Other Defined Terms

     1  

ARTICLE II THE GUARANTEES

     3  

SECTION 2.01. Guarantee

     3  

SECTION 2.02. Guarantee of Payment; Continuing Guarantee

     3  

SECTION 2.03. No Limitations

     3  

SECTION 2.04. Reinstatement

     5  

SECTION 2.05. Agreement to Pay; Subrogation

     5  

SECTION 2.06. Information

     5  

SECTION 2.07. Payments Free of Taxes

     6  

ARTICLE III INDEMNITY, SUBROGATION AND SUBORDINATION

     6  

SECTION 3.01. Indemnity and Subrogation

     6  

SECTION 3.02. Contribution and Subrogation

     6  

SECTION 3.03. Subordination

     7  

ARTICLE IV

     7  

ARTICLE IV REPRESENTATINS AND WARRANTIES

     7  

ARTICLE V MISCELLANEOUS

     7  

SECTION 5.01. Notices

     7  

SECTION 5.02. Waivers; Amendment

     8  

SECTION 5.03. Term Collateral Agent’s Fees and Expenses; Indemnification

     8  

SECTION 5.04. Successors and Assigns

     10  

SECTION 5.05. Survival of Agreement

     10  

SECTION 5.06. Counterparts; Effectiveness; Several Agreement

     10  

SECTION 5.07. Severability

     11  

SECTION 5.08. Right of Set-Off

     11  

SECTION 5.09. Governing Law; Jurisdiction; Consent to Service of Process;
Appointment of Service of Process Agent

     11  

SECTION 5.10. WAIVER OF JURY TRIAL

     12  

SECTION 5.11. Headings

     12  

 

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SECTION 5.12. Termination or Release

     12  

SECTION 5.13. Additional Guarantors

     13  

SECTION 5.14. Keepwell

     13  

 

 

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TERM GUARANTEE AGREEMENT dated as of April 13, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) among
the Guarantors from time to time party hereto and ROYAL BANK OF CANADA, as Term
Term Collateral Agent, on behalf of itself and the other Secured Parties (in
such capacity, the “Term Collateral Agent”).

Reference is made to (i) the Term Loan Credit Agreement dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among INSTALLED BUILDING PRODUCTS, INC., a Delaware
corporation (the “Borrower”), the Lenders from time to time party thereto and
ROYAL BANK OF CANADA, as Term Administrative Agent, and (ii) the Term Collateral
Agreement dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the “Collateral Agreement”), among the
Borrower, the other grantors party thereto and the Term Collateral Agent. The
Lenders have agreed to extend credit to the Borrower subject to the terms and
conditions set forth in the Credit Agreement. The obligations of the Lenders to
extend such credit are conditioned upon, among other things, the execution and
delivery of this Agreement. The Guarantors are affiliates of the Borrower, will
derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit. Accordingly, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including in the introductory paragraph hereto) and not otherwise defined
herein have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Section 1.03 of the Credit Agreement
also apply to this Agreement, mutatis mutandis.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Agreement” has the meaning assigned to such term in the preamble to this
Agreement.

“Borrower” has the meaning assigned to such term in the introductory paragraph
to this Agreement.

“Claiming Party” has the meaning assigned to such term in Section 3.02.

“Contributing Party” has the meaning assigned to such term in Section 3.02.

“Credit Agreement” has the meaning assigned to such term in the introductory
paragraph to this Agreement.

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“Excluded Subsidiary” means (a) any Subsidiary that is a Non-Wholly Owned
Subsidiary of the Borrower (for so long as such Subsidiary remains a Non-Wholly
Owned Subsidiary), (b) each Subsidiary listed on Schedule I, (c) any Foreign
Subsidiary, (d) any Subsidiary that is prohibited by any applicable contractual
obligation existing on the Effective Date or on the date any such Subsidiary is
acquired or organized (as long as, in the case of an acquisition of a
subsidiary, such prohibition in respect of such contract did not arise as part
of such acquisition) or any Requirement of Law from guaranteeing or granting
Liens to secure the Secured Obligations (and for so long as such restriction or
any replacement or renewal thereof is in effect) or which would require any
Governmental Approval to guarantee or grant a Lien to secure the Secured
Obligations (for so long as such Governmental Approval has not been received) or
to the extent that a guarantee or grant by such Subsidiary could result in
material adverse tax consequences as reasonably determined by the Borrower,
(e) any Immaterial Subsidiary, (f) any other Subsidiary with respect to which,
in the reasonable judgment of the Borrower and the Term Administrative Agent,
the cost or other consequences of providing a Guarantee of the Secured
Obligations shall be excessive in view of the benefits to be obtained by the
Secured Parties therefrom, (g) any (x) Subsidiary that is a CFC or (y) CFC
Holdco, (h) each Unrestricted Subsidiary, (i) any captive insurance company,
(j) any non-for-profit Subsidiaries and (k) special purpose securitization
vehicles; provided, that upon notice to the Term Administrative Agent, the
Borrower may at any time and in its sole discretion deem that any Restricted
Subsidiary, or to the extent reasonably acceptable to the Term Administrative
Agent, any Foreign Subsidiary, shall not be an Excluded Subsidiary for purposes
of this Agreement and the other Loan Documents.

“Guarantors” means the Subsidiaries of the Borrower identified as such on the
signature page hereto and each other Subsidiary that becomes a party to this
Agreement as a Guarantor on or after the Effective Date pursuant to
Section 5.13; provided that if a Subsidiary is released from its obligations as
a Guarantor hereunder as provided in Section 5.12(b), such Subsidiary shall
cease to be a Guarantor hereunder effective upon such release. For the avoidance
of doubt, Guarantors are referred to as “Subsidiary Loan Parties” in the Credit
Agreement.

“Qualified ECP Loan Party” means, in respect of any Secured Swap Obligation,
each Loan Party that has total assets exceeding $10,000,000 at the time the
relevant Guarantee or grant of the relevant security interest becomes effective
with respect to such Secured Swap Obligation or such other person as constitutes
an “eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Supplement” means an instrument in the form of Exhibit A hereto, or any other
form approved by the Term Collateral Agent, and in each case reasonably
satisfactory to the Term Collateral Agent.

“Term Collateral Agent” has the meaning assigned to such term in the
introductory paragraph to this Agreement.

 

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ARTICLE II

THE GUARANTEES

SECTION 2.01. Guarantee. Each Guarantor irrevocably and unconditionally
guarantees to each of the Secured Parties, jointly with the other Guarantors and
severally, the due and punctual payment and performance of the Secured
Obligations. Each Guarantor further agrees that the Secured Obligations may be
extended or renewed, in whole or in part, or amended or modified, without notice
to or further assent from it, and that it will remain bound upon its guarantee
hereunder notwithstanding any such extension or renewal, or amendment or
modification, of any of the Secured Obligations. Each Guarantor waives
presentment to, demand of payment from and protest to the Borrower or any other
Loan Party of any of the Secured Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.
Notwithstanding anything to the contrary contained herein, the obligations of
each Guarantor hereunder at any time shall be limited to an aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
the Bankruptcy Code or any comparable provisions of any other applicable law, in
each case to the extent (if any) applicable to such Guarantor.

SECTION 2.02. Guarantee of Payment; Continuing Guarantee. Each Guarantor further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
(whether or not any bankruptcy or similar proceeding shall have stayed the
accrual of collection of any of the Secured Obligations or operated as a
discharge thereof) and not merely of collection, and waives any right to require
that any resort be had by the Term Collateral Agent or any other Secured Party
to any security held for the payment of any of the Secured Obligations or to any
balance of any deposit account or credit on the books of the Term Collateral
Agent or any other Secured Party in favor of the Borrower, any other Loan Party
or any other Person. Each Guarantor agrees that its guarantee hereunder is
continuing in nature and applies to all of the Secured Obligations, whether
currently existing or hereafter incurred.

SECTION 2.03. No Limitations. (a) Except for the termination or release of a
Guarantor’s obligations hereunder as expressly provided in Section 5.12, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise of any of the Secured
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of any of the Secured Obligations, any impossibility in the
performance of any of the Secured Obligations or otherwise. Without limiting the
generality of the foregoing, except for the termination or release of its
obligations hereunder as expressly provided in Section 5.12, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by:

(i) the failure of any Secured Party or any other Person to assert any claim or
demand or to enforce any right or remedy under the provisions of any Loan
Document or otherwise;

 

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(ii) any rescission, waiver, amendment, restatement or modification of, or any
release from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor under this Agreement;

(iii) the release of, or any impairment of or failure to perfect any Lien on,
any security held by any Secured Party for any of the Secured Obligations;

(iv) any default, failure or delay, willful or otherwise, in the performance of
any of the Secured Obligations;

(v) any other act or omission that may or might in any manner or to any extent
vary the risk of any Guarantor or otherwise operate as a discharge of any
Guarantor as a matter of law or equity (other than the payment in full in cash
of all the Secured Obligations (other than contingent indemnification
obligations not yet accrued and payable as to which no claim has been made));

(vi) any illegality, lack of validity or lack of enforceability of any of the
Secured Obligations;

(vii) any change in the corporate existence, structure or ownership of any Loan
Party, or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Loan Party or its assets or any resulting release or discharge of
any of the Secured Obligations;

(viii) the existence of any claim, set-off or other rights that any Guarantor
may have at any time against the Borrower, the Term Collateral Agent, any other
Secured Party or any other Person, whether in connection with the Credit
Agreement, the other Loan Documents or any unrelated transaction;

(ix) this Agreement having been determined (on whatsoever grounds) to be
invalid, non-binding or unenforceable against any other Guarantor ab initio or
at any time after the Effective Date;

(x) the fact that any Person that, pursuant to the Loan Documents, was required
to become a party hereto may not have executed or is not effectually bound by
this Agreement, whether or not this fact is known to the Secured Parties;

(xi) any action permitted or authorized hereunder; or

(xii) any other circumstance (including any statute of limitations), or any
existence of or reliance on any representation by the Term Collateral Agent, any
Secured Party or any other Person, that might otherwise constitute a defense to,
or a legal or equitable discharge of, the Borrower, any Guarantor or any other
guarantor or surety (other than the payment in full in cash of all the Secured
Obligations (other than contingent indemnification obligations not yet accrued
and payable as to which no claim has been made)).

Each Guarantor expressly authorizes the Secured Parties to take and hold
security in accordance with the terms of the Loan Documents for the payment and
performance of the Secured Obligations, to exchange, waive or release any or all
such security (with or without consideration), to enforce or apply such security
and direct the order and manner of any sale thereof in their sole discretion or
to release or substitute any one or more other guarantors or obligors upon or in
respect of the Secured Obligations, all without affecting the obligations of any
Guarantor hereunder.

 

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(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other Loan
Party or the unenforceability of the Secured Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
or any other Loan Party, other than the payment in full in cash of all the
Secured Obligations (other than contingent indemnification obligations not yet
accrued and payable as to which no claim has been made). The Term Collateral
Agent and the other Secured Parties may, at their election and in accordance
with the terms of the Loan Documents, foreclose on any security held by one or
more of them by one or more judicial or nonjudicial sales, accept an assignment
of any such security in lieu of foreclosure, compromise or adjust any part of
the Secured Obligations, make any other accommodation with the Borrower or any
other Loan Party or exercise any other right or remedy available to them against
the Borrower or any other Loan Party, without affecting or impairing in any way
the liability of any Guarantor hereunder except to the extent the Secured
Obligations (other than contingent indemnification obligations not yet accrued
and payable as to which no claim has been made) have been paid in full in cash.
To the fullest extent permitted by applicable law, each Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower or any other Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each Guarantor agrees that, unless released
pursuant to Section 5.12(b), its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Secured Obligations is rescinded or must otherwise be
restored by any Secured Party upon the insolvency, bankruptcy or reorganization
(or any analogous proceeding in any jurisdiction) of the Borrower, any other
Loan Party or otherwise.

SECTION 2.05. Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Term Collateral Agent or any other
Secured Party has at applicable law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Secured Obligation when and as the same shall become due, whether at maturity,
by acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Term Collateral
Agent for distribution to the applicable Secured Parties in cash the amount of
such unpaid Secured Obligation. Upon payment by any Guarantor of any sums to the
Term Collateral Agent as provided above, all rights of such Guarantor against
the Borrower or any other Loan Party arising as a result thereof by way of right
of subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article III.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Secured Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
none of the Secured Parties will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.

 

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SECTION 2.07. Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Guarantor hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes on the same terms and to the same extent that payments by the
Borrower are required to be so made pursuant to the terms of Section 2.17 of the
Credit Agreement. The provisions of Section 2.17 of the Credit Agreement shall
apply to each Guarantor, mutatis mutandis.

ARTICLE III

INDEMNITY, SUBROGATION AND SUBORDINATION

SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3.03) in respect of any payment hereunder, the Borrower
agrees that (a) in the event a payment in respect of any obligation of the
Borrower shall be made by any Guarantor under this Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to any Term Security Document to satisfy in
whole or in part any Secured Obligations owed to any Secured Party, the Borrower
shall indemnify such Guarantor in an amount equal to the greater of the book
value or the fair market value of the assets so sold.

SECTION 3.02. Contribution and Subrogation. Each Guarantor (a “Contributing
Party”) agrees (subject to Section 3.03) that, in the event a payment shall be
made by any other Guarantor hereunder in respect of any Secured Obligations or
assets of any other Guarantor (other than the Borrower) shall be sold pursuant
to any Term Security Document to satisfy any Secured Obligation owed to any
Secured Party and such other Guarantor (the “Claiming Party”) shall not have
been fully indemnified as provided in Section 3.01, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the amount of such payment or
the greater of the book value or the fair market value of such assets, as the
case may be, in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Party on the date hereof (or, in the case
of any Guarantor becoming a party hereto pursuant to Section 5.13, the date of
the Supplement executed and delivered by such Guarantor) and the denominator
shall be the aggregate net worth of all the Guarantors on the date hereof (or,
in the case of any Guarantor becoming a party hereto pursuant to Section 5.13,
such other date). Any Contributing Party making any payment to a Claiming Party
pursuant to this Section 3.02 shall be subrogated to the rights of such Claiming
Party under Section 3.01 to the extent of such payment.

 

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SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and
all other rights of the Guarantors of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the payment in
full in cash of all the Secured Obligations. No failure on the part of the
Borrower or any Guarantor to make the payments required by Sections 3.01 and
3.02 (or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with respect
to its obligations hereunder, and each Guarantor shall remain liable for the
full amount of the obligations of such Guarantor hereunder.

(b) Each Guarantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after notice from the Term Collateral
Agent (provided that no such notice shall be required to be given in the case of
any Event of Default arising under Section 7.01(h) or 7.01(i) of the Credit
Agreement), all Indebtedness and other monetary obligations owed by it to, or to
it by, any other Guarantor or any other Subsidiary shall be fully subordinated
to the payment in full in cash of all the Secured Obligations.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Guarantor represents and warrants to the Term Collateral Agent and the
other Secured Parties that (a) the execution, delivery and performance by such
Guarantor of this Agreement have been duly authorized by all necessary corporate
or limited liability or limited partnership action and, if required, action by
the holders of such Guarantor’s Equity Interests, and that this Agreement has
been duly executed and delivered by such Guarantor and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, court protection, administration or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law, and (b) all
representations and warranties set forth in the Credit Agreement as to such
Guarantor are true and correct in all material respects; provided that, to the
extent such representations and warranties specifically refer to an earlier
date, they are true and correct in all material respects as of such earlier
date; provided, further that any representation and warranty that is qualified
as to “materiality,” “Material Adverse Effect” or similar language is true and
correct in all respects.

ARTICLE V

MISCELLANEOUS

SECTION 5.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Guarantor shall be given to it in care of the Borrower as provided in
Section 9.01 of the Credit Agreement.

 

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SECTION 5.02. Waivers; Amendment. (a) No failure or delay by the Term Collateral
Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Term Collateral Agent and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 5.02, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Term Collateral Agent or any
Lender may have had notice or knowledge of such Default at the time. No notice
or demand on any Loan Party in any case shall entitle any Loan Party to any
other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Term Collateral Agent and the Guarantor or Guarantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement; provided that
the Term Collateral Agent may, without the consent of any Secured Party, consent
to a departure by any Guarantor from any covenant of such Guarantor set forth
herein to the extent such departure is consistent with the authority of the Term
Collateral Agent set forth in the definition of the term “Collateral and
Guarantee Requirement” in the Credit Agreement.

SECTION 5.03. Term Collateral Agent’s Fees and Expenses; Indemnification.

(a) Each Guarantor, jointly with the other Guarantors and severally, agrees to
reimburse the Term Collateral Agent for its fees and expenses incurred hereunder
as provided in Section 9.03(a) of the Credit Agreement; provided that each
reference therein to the “Borrower” shall be deemed to be a reference to “each
Guarantor.”

(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Guarantor, jointly with the other Guarantors and severally,
agrees to indemnify the Term Collateral Agent and the other Indemnitees against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and reasonable and documented or invoiced out-of-pocket fees and
expenses (limited, in the case of (i) legal fees and expenses to the reasonable
documented and invoiced out-of-pocket fees and expenses of one counsel for all
Indemnitees and, to the extent reasonably determined by the Term Collateral
Agent to be necessary, one firm of local counsel in each relevant jurisdiction
(which may include a single special counsel acting in multiple jurisdictions)
(and, in the case of an actual conflict of interest, where the Indemnitee
affected by such conflict notifies the Borrower of the existence of such
conflict and thereafter retains its own counsel, one additional counsel for the
affected Indemnitees similarly situated) for all Indemnitees (which may include
a single special counsel acting in multiple jurisdictions) and (ii) the fees and
expenses of any other advisor or consultant, to the reasonable and documented or
invoiced out-of-pocket fees and expenses of such advisor or consultant, but
solely to the extent that such consultant or advisor has been retained with the

 

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Borrower’s consent (such consent not to be unreasonably withheld or delayed),
incurred by or asserted against any Indemnitee by any third party or the
Borrower or any Subsidiary or any of their respective Affiliates to the extent
arising out of, in connection with, or as a result of, the execution, delivery
or performance of this Agreement or any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether brought by
a third party or by the Borrower or any Subsidiary and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities, costs or related expenses (w) resulted from the gross negligence,
bad faith or willful misconduct of such Indemnitee or its Related Parties (as
determined by a court of competent jurisdiction in a final and non-appealable
judgment), (x) resulted from a material breach of the Loan Documents by such
Indemnitee or its Related Parties (as determined by a court of competent
jurisdiction in a final and non-appealable judgment), (y) arise from disputes
between or among Indemnitees (other than claims against an Indemnitee in its
capacity or in fulfilling its role as an agent, an arranger or any similar roles
under the Loan Documents) that do not involve an act or omission by the Borrower
or any of its Affiliates or (z) any settlement effected without the Borrower’s
prior consent, but if settled with the Borrower’s prior consent (such consent
not to be unreasonably withheld or delayed), the Borrower will indemnify and
hold harmless each Indemnitee from and against any and all losses, claims,
damages, liabilities and expenses by reason of such settlement in accordance
with this paragraph; provided further that the Borrower shall not, without the
prior written consent of the applicable Indemnitee (which consent shall not be
unreasonably withheld, delayed or conditioned), effect any settlement of any
pending or threatened claim, litigation, investigation or proceeding in respect
of which indemnity could have been sought hereunder by such Indemnitee unless
(a) such settlement includes a full and unconditional release of such Indemnitee
in form and substance reasonably satisfactory to such Indemnitee from all
liability on claims that are the subject matter of such claim, litigation,
investigation or proceeding and (b) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of such
Indemnitee.

(c) To the fullest extent permitted by applicable law, no party hereto nor any
Affiliate of any party hereto, nor any officer, director, employee, agent,
controlling person, advisor or other representative of the foregoing or any
successor or permitted assign of any of the foregoing shall assert and each
hereby waives, any claim against any other such Person on any theory of
liability for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages, but in any event including, without limitation, any
loss of profits, business or anticipated savings) (whether or not the claim
therefor is based on contract, tort or duty imposed by any applicable legal
requirement) arising out of, in connection with, or as a result of, or in any
way related to, this Agreement or any Loan Document or any agreement or
instrument contemplated hereby or thereby, the Financing Transactions, any Loan
or the use of the proceeds thereof and each such Person further agrees not to
sue upon any such claim or any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor; provided that the foregoing
shall in no event limit the Guarantors’ indemnification obligations under clause
(b) above.

 

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(d) Notwithstanding anything to the contrary in this Agreement, to the extent
permitted by applicable law, no party hereto or an Indemnitee shall assert, and
each hereby waives, any claim against any other Person for any direct or actual
damages arising from the use by unintended recipients of information or other
materials distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems
(including the Internet) in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby; except to the
extent that such direct or actual damages are determined by a court of competent
jurisdiction in a final, non-appealable judgment to have resulted from the gross
negligence, bad faith or willful misconduct of, or a material breach of the Loan
Documents by, such Indemnitee or its Related Parties.

(e) The provisions of this Section 5.03 shall remain operative and in full force
and effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby or thereby,
the repayment of any of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of any Secured Party. All
amounts due under this Section 5.03 shall be payable not later than 10 Business
Days after written demand therefore; provided, however, any Indemnitee shall
promptly refund an indemnification payment received hereunder to the extent that
there is a final judicial determination that such Indemnitee was not entitled to
indemnification with respect to such payment pursuant to this Section 5.03. Any
such amounts payable as provided hereunder shall be additional Secured
Obligations.

SECTION 5.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor or the Term Collateral Agent that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 5.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in this Agreement and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the Secured
Parties and shall survive the execution and delivery of the Loan Documents and
the making of any Loans, in each case, in accordance with and subject to the
limitations set forth in Section 9.05 of the Credit Agreement.

SECTION 5.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile or other electronic transmission
shall be effective as delivery of a manually signed counterpart of this
Agreement. This Agreement shall become effective as to any Guarantor when a
counterpart hereof executed on behalf of such Guarantor shall have been
delivered to the Term Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Term Collateral Agent, and thereafter shall be binding
upon such Guarantor and the Term Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Guarantor, the
Term Collateral Agent and the other Secured Parties and their respective
successors and assigns,

 

10

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except that no Guarantor shall have the right to assign or transfer its rights
or obligations hereunder or any interest herein (and any such assignment or
transfer shall be void) except as expressly provided in this Agreement and the
Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each Guarantor and may be amended, modified, supplemented, waived or
released with respect to any Guarantor without the approval of any other
Guarantor and without affecting the obligations of any other Guarantor
hereunder.

SECTION 5.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 5.08. Right of Set-Off. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender to or for the credit or the account of any Guarantor
against any of and all the obligations of such Guarantor then due and owing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although (i) such
obligations may be contingent or unmatured and (ii) such obligations are owed to
a branch or office of such Lender different from the branch or office holding
such deposit or obligated on such Indebtedness. The applicable Lender shall
notify the applicable Guarantor and the Term Collateral Agent of such setoff and
application; provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such setoff and application under
this Section 5.08. The rights of each Lender and its Affiliates under this
Section 5.08 are in addition to other rights and remedies (including other
rights of setoff) that such Lender and its Affiliates may have.

SECTION 5.09. Governing Law; Jurisdiction; Consent to Service of Process;
Appointment of Service of Process Agent. (a) This Agreement shall be construed
in accordance with and governed by the laws of the State of New York.

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Term Collateral Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Guarantor or its respective properties in the courts
of any jurisdiction.

 

11

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(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section 5.09. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 5.01. Nothing in this Agreement will
affect the right of any party to this Agreement or any other Loan Document to
serve process in any other manner permitted by law.

(e) Each Guarantor hereby irrevocably designates, appoints and empowers the
Borrower as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents that may be served in any such
action or proceeding and the Borrower hereby accepts such designation and
appointment.

SECTION 5.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.

SECTION 5.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 5.12. Termination or Release. (a) Subject to Section 2.04, this
Agreement and the Guarantees made herein shall terminate automatically on the
Termination Date.

 

12

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(b) The guarantees made herein shall also terminate and be released at the time
or times and in the manner set forth in Section 9.14 of the Credit Agreement.

(c) In connection with any termination or release pursuant to paragraph (a) or
(b) of this Section 5.12, the Term Collateral Agent shall execute and deliver to
any Loan Party, at such Loan Party’s expense, all documents that such Loan Party
shall reasonably request to evidence such termination or release so long as the
applicable Loan Party shall have provided the Term Collateral Agent such
certifications or documents as the Term Collateral Agent shall reasonably
request in order to demonstrate compliance with this Section 5.12. Any execution
and delivery of documents by the Term Collateral Agent pursuant to this
Section 5.12 shall be without recourse to or warranty by the Term Collateral
Agent or any other Secured Party.

SECTION 5.13. Additional Guarantors. Additional Persons may become Guarantors
after the date hereof as contemplated by the Credit Agreement. Upon execution
and delivery by the Term Collateral Agent and a Person of a Supplement, any such
Person shall become a Guarantor hereunder with the same force and effect as if
originally named as such herein. The execution and delivery of any such
instrument shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any Person as a party to this
Agreement.

SECTION 5.14. Keepwell. Each Qualified ECP Loan Party, jointly and severally,
hereby absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of such Loan Party’s obligations under this Agreement and the
other Loan Documents in respect of Secured Swap Obligations (provided, however,
that each Qualified ECP Loan Party shall only be liable under this Section 5.14
for the maximum amount of such liability that can be hereby incurred without
rendering its obligations under this Section 5.14, or otherwise under this
Agreement or the other Loan Documents, voidable under applicable law, including
fraudulent conveyance or fraudulent transfer laws, and not for any greater
amount). The obligations of each Qualified ECP Loan Party under this
Section 5.14 shall remain in full force and effect until the Termination Date,
in each case, in accordance with and subject to the limitations set forth in
Section 9.05 of the Credit Agreement. Each Qualified ECP Loan Party intends that
this Section 5.16 constitute, and this Section 5.14 shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

[Signature Pages Follow]

 

13

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

Guarantors:

 

ACCURATE INSULATION LLC

ACCURATE INSULATION OF

    COLORADO, LLC

ACCURATE INSULATION OF

    DELAWARE, LLC

ACCURATE INSULATION OF UPPER

    MARLBORO, LLC

ALL CONSTRUCTION SERVICES, LLC

ALL IN ONE & MOORE BUILDING

    SYSTEMS, LLC

ALPHA INSULATION & WATER

    PROOFING COMPANY

ALPHA INSULATION & WATER PROOFING, INC.

ALPINE INSULATION I, LLC

AMERICAN INSULATION & ENERGY

    SERVICES, LLC

ANY SEASON INSULATION, LLC

APPLE VALLEY INSULATION, A BDI

    COMPANY, INC.

B-ORGANIZED INSULATION, LLC

BAYTHERM INSULATION, LLC

BDI INSULATION OF IDAHO FALLS, INC.

BDI INSULATION OF SALT LAKE, L.L.C.

BER ENERGY SERVICES, LLC

BIG CITY INSULATION, INC.

BIG CITY INSULATION OF IDAHO, INC.

BROKEN DRUM OF BAKERSFIELD, INC.

BROKEN DRUM INSULATION VISALIA, INC.

BUILDERS INSTALLED PRODUCTS OF MAINE, LLC

BUILDERS INSTALLED PRODUCTS OF NEW HAMPSHIRE, LLC

  

BUILDERS INSTALLED PRODUCTS OF

    NEW YORK, LLC

BUILDERS INSTALLED PRODUCTS OF

    VERMONT, LLC

BUILDING MATERIALS FINANCE, INC.

CLS INSULATION, LLC

CORNHUSKER INSULATION, LLC

C.Q. INSULATION, INC.

EAST COAST INSULATORS II, LLC

EASTERN CONTRACTOR SERVICES

    LIMITED LIABILITY COMPANY

ECOLOGIC ENERGY SOLUTIONS, LLC

EDWARDS/MOONEY & MOSES, LLC

EMPER HOLDINGS, LLC

FIBERCLASS INSULATION, LLC

FORT WAYNE URETHANE, LLC

GARAGE DOOR SYSTEMS, LLC

GOLD INSULATION, INC.

G-T-G, LLC

HINKLE INSULATION & DRYWALL

    COMPANY, INCORPORATED

HORIZON ELECTRIC SERVICES, LLC

IBHL A HOLDING COMPANY, INC.

IBHL B HOLDING COMPANY, INC.

IBHL II-A HOLDING COMPANY, INC.

IBHL II-B HOLDING COMPANY, INC.

IBP ARCTIC EXPRESS, LLC

IBP ASSET, LLC

IBP ASSET II, LLC

IBP CORPORATION HOLDINGS, INC.

IBP EXTERIORS, INC.

IBP HOLDINGS, LLC

IBP HOLDINGS II, LLC

IBP OF MANSFIELD, LLC

IBP OF OKLAHOMA, LLC

 

By:  

/s/ Michael T. Miller

    By:  

/s/ Michael T. Miller

  Michael T. Miller       Michael T. Miller  

Executive Vice President and Chief

Financial Officer

     

Executive Vice President and Chief

Financial Officer

 

[Signature Page to Term Guarantee Agreement]

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IBP OF SAN ANTONIO, LLC

IBP OF TOLEDO, LLC

IBP TEXAS ASSETS I, LLC

IBP TEXAS ASSETS II, LLC

IBP TEXAS ASSETS III, LLC

INSTALLED BUILDING PRODUCTS, LLC

INSTALLED BUILDING PRODUCTS II,

    LLC

INSTALLED BUILDING PRODUCTS OF

    HOUSTON, LLC

INSTALLED BUILDING PRODUCTS -

    PORTLAND, LLC

INSTALLED BUILDING SOLUTIONS II, LLC

INSULATION NORTHWEST, LLC

INSULATION WHOLESALE SUPPLY, LLC

INSULVAIL, LLC

KEY INSULATION OF AUSTIN, LLC

KEY INSULATION OF SAN ANTONIO,

    LLC

LAKESIDE INSULATION, LLC

LAYMAN BROTHERS INSULATION, LLC

LKS TRANSPORTATION, LLC

LOVEDAY INSULATION, LLC

M&D INSULATION, LLC

MAP INSTALLED BUILDING PRODUCTS

    OF SAGAMORE, LLC

MAP INSTALLED BUILDING PRODUCTS

    OF SEEKONK, LLC

MARV’S INSULATION, INC.

METRO HOME INSULATION, LLC

MID SOUTH CONSTRUCTION AND

    BUILDING PRODUCTS, INC.

MIG BUILDING SYSTEMS, LLC

MIG BUILDING SYSTEMS OF EAST

    SYRACUSE, LLC

MOMPER INSULATION OF CROWN

    POINT, LLC

  

MOMPER INSULATION OF ELKHART,

    LLC

MOMPER INSULATION OF FORT

    WAYNE, LLC

NORTHWEST INSULATION, LLC

OJ INSULATION HOLDINGS, INC.

PACIFIC PARTNERS INSULATION

    NORTH, A BDI COMPANY, LLC

PACIFIC PARTNERS INSULATION

    SOUTH, A BDI COMPANY, LLC

PARKER INSULATION AND BUILDING

    PRODUCTS, LLC

PEG, LLC

RAJAN, LLC

ROCKFORD INSULATION, LLC

SIERRA INSULATION CONTRACTORS II, LLC

SOUTHERN INSULATORS, LLC

SPEC 7 INSULATION CO., LLC

SUPERIOR INSULATION, LLC

SUPERIOR INSULATION SERVICES, LLC

TCI CONTRACTING, LLC

TCI CONTRACTING OF CHARLESTON,

    LLC

TCI CONTRACTING OF HILTON HEAD,

    LLC

TCI CONTRACTING OF KENTUCKY, LLC

TCI CONTRACTING OF MEMPHIS, LLC

TCI CONTRACTING OF NASHVILLE, LLC

TCI CONTRACTING OF THE GULF, LLC

THERMAL CONTROL INSULATION, LLC

TIDEWATER INSULATORS, LLC

TOWN BUILDING SYSTEMS, LLC

TRILOK INDUSTRIES, INC.

U.S. INSULATION CORP.

WATER-TITE COMPANY, LLC

WILSON INSULATION COMPANY, LLC

 

By:  

/s/  Michael T. Miller

    By:  

/s/ Michael T. Miller

  Michael T. Miller       Michael T. Miller  
Executive Vice President and Chief Financial Officer       Executive Vice
President and Chief Financial Officer

 

[Signature Page to Term Guarantee Agreement]

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GOLD STAR INSULATION, L.P.     OJ INSULATION, L.P. By:   Gold Insulation, Inc.,
its general partner     By:   OJ Insulation Holdings, Inc., its general partner
By:  

/s/ Michael T. Miller

    By:  

/s/ Michael T. Miller

  Michael T. Miller       Michael T. Miller  

Executive Vice President and Chief

    Financial Officer

     

Executive Vice President and Chief

    Financial Officer

 

[Signature Page to Term Guarantee Agreement]

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ROYAL BANK OF CANADA,

        as Term Collateral Agent

By:  

/s/ Ann Hurley

  Name: Ann Hurley   Title:   Manager, Agency

 

 

[Signature Page to Term Guarantee Agreement]

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Schedule I to the

Guarantee Agreement

None.