Exhibit 10.4

 

Execution Version

 

CREDIT AND GUARANTY AGREEMENT

 

dated as of March 3, 2011

 

among

 

EURAMAX INTERNATIONAL, INC., 
 as Company,

 

EURAMAX HOLDINGS, INC.

and

CERTAIN SUBSIDIARIES OF EURAMAX INTERNATIONAL, INC.,

as Guarantors and

 

THE LENDERS PARTY HERETO FROM TIME TO TIME

 











 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
SECTION 1. DEFINITIONS AND   INTERPRETATION
    	
1
    
	
 
    	
1.1. Definitions
    	
1
    
	
 
    	
1.2. Accounting Terms
    	
42
    
	
 
    	
1.3. Interpretation, etc.
    	
43
    
	
 
    	
 
    	
 
    
	
SECTION 2. LOANS
    	
43
    
	
 
    	
2.1. The Loans
    	
43
    
	
 
    	
2.2. [INTENTIONALLY   OMITTED.]
    	
44
    
	
 
    	
2.3. [INTENTIONALLY OMITTED.]
    	
44
    
	
 
    	
2.4. [INTENTIONALLY OMITTED.]
    	
44
    
	
 
    	
2.5. [INTENTIONALLY OMITTED.]
    	
44
    
	
 
    	
2.6. [INTENTIONALLY OMITTED.]
    	
44
    
	
 
    	
2.7. Evidence of Debt;   Register; Lenders’ Books and Records; Promissory Notes
    	
44
    
	
 
    	
2.8. Interest on Loans
    	
45
    
	
 
    	
2.9. [INTENTIONALLY OMITTED.]
    	
45
    
	
 
    	
2.10. Default Interest
    	
45
    
	
 
    	
2.11. Fees
    	
45
    
	
 
    	
2.12. Repayment of Loans at   Maturity
    	
45
    
	
 
    	
2.13. Voluntary Prepayments
    	
46
    
	
 
    	
2.14. Mandatory Prepayment   Offers
    	
47
    
	
 
    	
2.15. [INTENTIONALLY OMITTED.]
    	
48
    
	
 
    	
2.16. General Provisions Regarding   Payments
    	
48
    
	
 
    	
2.17. Ratable Sharing
    	
49
    
	
 
    	
2.18. Making or Maintaining   Loans
    	
49
    
	
 
    	
2.19. Increased Costs; Capital   Adequacy
    	
50
    
	
 
    	
2.20. Taxes;   Withholding, etc.
    	
52
    
	
 
    	
2.21. Obligation to Mitigate
    	
55
    
	
 
    	
2.22. Refunds
    	
55
    
	
 
    	
2.23. [INTENTIONALLY OMITTED.]
    	
55
    
	
 
    	
2.24. Removal or Replacement of   a Lender
    	
55
    
	
 
    	
 
    	
 
    
	
SECTION 3. CONDITIONS   PRECEDENT
    	
56
    
	
 
    	
3.1. Conditions to Closing   Date
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 4. REPRESENTATIONS   AND WARRANTIES
    	
59
    
	
 
    	
4.1.   Organization; Requisite Power and Authority; Qualification
    	
59
    
	
 
    	
4.2.   Capital Stock and Ownership
    	
59
    
	
 
    	
4.3.   Due Authorization
    	
59
    
	
 
    	
4.4.   No Conflict
    	
59
    
	
 
    	
4.5.   Governmental Consents
    	
60
    
	
 
    	
4.6.   Binding Obligation
    	
60
    
	
 
    	
4.7.   Historical Financial Statements
    	
60
    
	
 
    	
4.8. [INTENTIONALLY OMITTED.]
    	
60
    
	
 
    	
4.9.   No Material Adverse Change
    	
61
    
	
 
    	
4.10.   Adverse Proceedings, etc.
    	
61
    


 

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TABLE OF CONTENTS
 (Continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
4.11.   Taxes
    	
61
    
	
 
    	
4.12. Properties
    	
61
    
	
 
    	
4.13.   Environmental Matters
    	
61
    
	
 
    	
4.14.   No Defaults
    	
62
    
	
 
    	
4.15. [INTENTIONALLY OMITTED.]
    	
62
    
	
 
    	
4.16.   Governmental Regulation
    	
62
    
	
 
    	
4.17.   Margin Stock
    	
62
    
	
 
    	
4.18. Employee Matters
    	
62
    
	
 
    	
4.19. ERISA
    	
63
    
	
 
    	
4.20. Certain Fees
    	
63
    
	
 
    	
4.21.   Solvency
    	
63
    
	
 
    	
4.22. Related Agreements
    	
63
    
	
 
    	
4.23. Compliance with   Statutes, etc.
    	
63
    
	
 
    	
4.24.   Disclosure
    	
64
    
	
 
    	
4.25. Patriot Act
    	
64
    
	
 
    	
 
    	
 
    
	
SECTION 5. AFFIRMATIVE   COVENANTS
    	
64
    
	
 
    	
5.1.   Financial Statements and Other Reports
    	
64
    
	
 
    	
5.2.   Existence
    	
66
    
	
 
    	
5.3.   Payment of Taxes and Claims
    	
66
    
	
 
    	
5.4.   Maintenance of Properties
    	
66
    
	
 
    	
5.5.   Insurance
    	
67
    
	
 
    	
5.6.   Inspections; Access to Management and Information
    	
67
    
	
 
    	
5.7.   Lenders Meetings
    	
67
    
	
 
    	
5.8.   Compliance with Laws
    	
67
    
	
 
    	
5.9. [INTENTIONALLY OMITTED.]
    	
67
    
	
 
    	
5.10.   Subsidiaries
    	
67
    
	
 
    	
5.11.   Further Assurances
    	
68
    
	
 
    	
 
    	
 
    
	
SECTION 6. NEGATIVE   COVENANTS
    	
68
    
	
 
    	
6.1.   Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred   Stock
    	
68
    
	
 
    	
6.2.   Liens
    	
73
    
	
 
    	
6.3.   Restricted Payments
    	
74
    
	
 
    	
6.4.   Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
    	
80
    
	
 
    	
6.5.   Merger, Consolidation or Sale of Assets
    	
83
    
	
 
    	
6.6.   Merger, Consolidation or Sale of Guarantors
    	
84
    
	
 
    	
6.7. Asset Sales
    	
84
    
	
 
    	
6.8. Transactions   with Affiliates
    	
87
    
	
 
    	
6.9. Designation of Restricted and Unrestricted   Subsidiaries
    	
89
    
	
 
    	
 
    	
 
    
	
SECTION 7. LOAN GUARANTEE
    	
91
    
	
 
    	
7.1.   Guaranty of the Obligations
    	
91
    
	
 
    	
7.2.   Contribution by Subsidiary Guarantors
    	
91
    


 

ii











 

TABLE OF CONTENTS
 (Continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
7.3.   Payment by Subsidiary Guarantors
    	
92
    
	
 
    	
7.4.   Liability of Subsidiary Guarantors Absolute
    	
92
    
	
 
    	
7.5.   Waivers by Guarantors
    	
94
    
	
 
    	
7.6.   Guarantors’ Rights of Subrogation, Contribution, etc.
    	
95
    
	
 
    	
7.7.   Subordination of Other Obligations
    	
96
    
	
 
    	
7.8.   Continuing Guaranty
    	
96
    
	
 
    	
7.9.   Authority of Guarantors or Company
    	
96
    
	
 
    	
7.10.   Financial Condition of Company
    	
96
    
	
 
    	
7.11.   Bankruptcy, etc.
    	
96
    
	
 
    	
7.12.   Release of Loan Guarantees
    	
97
    
	
 
    	
 
    	
 
    
	
SECTION 8. EVENTS OF DEFAULT
    	
98
    
	
 
    	
8.1.   Events of Default
    	
98
    
	
 
    	
8.2.   Acceleration
    	
100
    
	
 
    	
 
    	
 
    
	
SECTION 9. ADMINISTRATIVE   AGENT
    	
100
    
	
 
    	
9.1.   Appointment of Administrative Agent
    	
100
    
	
 
    	
9.2.   Powers and Duties
    	
101
    
	
 
    	
9.3.   General Immunity
    	
101
    
	
 
    	
9.4.   Administrative Agent Entitled to Act as Lender
    	
103
    
	
 
    	
9.5. Lenders’ Representations,   Warranties and Acknowledgment
    	
103
    
	
 
    	
9.6.   Right to Indemnity
    	
104
    
	
 
    	
9.7.   Successor Administrative Agent
    	
104
    
	
 
    	
9.8. Guaranties
    	
105
    
	
 
    	
 
    	
 
    
	
SECTION 10. [RESERVED.]
    	
105
    
	
 
    	
 
    
	
SECTION 11. MISCELLANEOUS
    	
105
    
	
 
    	
11.1.   Notices
    	
105
    
	
 
    	
11.2.   Expenses
    	
106
    
	
 
    	
11.3.   Indemnity
    	
106
    
	
 
    	
11.4.   Set-Off
    	
107
    
	
 
    	
11.5. Amendments and Waivers
    	
107
    
	
 
    	
11.6. Successors and Assigns;   Participations
    	
109
    
	
 
    	
11.7. [INTENTIONALLY OMITTED]
    	
113
    
	
 
    	
11.8.   Independence of Covenants
    	
113
    
	
 
    	
11.9.   Survival of Representations, Warranties and Agreements
    	
113
    
	
 
    	
11.10. No Waiver; Remedies Cumulative
    	
113
    
	
 
    	
11.11. Marshalling; Payments Set Aside
    	
113
    
	
 
    	
11.12. Severability
    	
113
    
	
 
    	
11.13.   Obligations Several; Independent Nature of Lenders’ Rights
    	
114
    
	
 
    	
11.14. Headings
    	
114
    
	
 
    	
11.15. APPLICABLE LAW
    	
114
    
	
 
    	
11.16. CONSENT TO JURISDICTION
    	
114
    


 

iii











 

TABLE OF CONTENTS
 (Continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
11.17. WAIVER OF JURY TRIAL
    	
114
    
	
 
    	
11.18. Confidentiality
    	
115
    
	
 
    	
11.19. Usury Savings Clause
    	
116
    
	
 
    	
11.20. Changes to First Lien Facility Prior to Closing Date
    	
116
    
	
 
    	
11.21. Counterparts
    	
117
    
	
 
    	
11.22. Effectiveness
    	
117
    
	
 
    	
11.23. Patriot   Act
    	
117
    
	
 
    	
11.24.   Electronic Transmissions
    	
117
    
	
 
    	
11.25. Public   Disclosures
    	
118
    
	
 
    	
11.26. Alternative   Transaction Fee and Right of First Refusal
    	
118
    
	
 
    	
11.27.   Effectiveness of Agreement
    	
119
    


 

iv











 

	
SCHEDULES:
    	
1
    	
Commitments
    
	
 
    	
2.1(c)
    	
Loans
    
	
 
    	
3.1(c)
    	
Organizational   Structure
    
	
 
    	
4.2
    	
Capital Stock   and Ownership
    
	
 
    	
4.5
    	
Governmental   Consents
    
	
 
    	
 
    	
 
    
	
EXHIBITS:
    	
11.20
    	
Description of   Notes
    


 

v









 

CREDIT AND GUARANTY AGREEMENT

 

This CREDIT AND GUARANTY AGREEMENT, dated as of March 3, 2011, is entered into by and among EURAMAX INTERNATIONAL, INC., a Delaware corporation (“Company”), EURAMAX HOLDINGS, INC. and CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors and the Lenders party hereto from time to time.

 

RECITALS:

 

WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

 

WHEREAS, the Initial Lenders have previously made loans to the Company (or its Affiliates) (the “Existing Lender Loans”) pursuant to that certain Amended and Restated First Lien Credit and Guaranty Agreement (the “Existing First Lien Credit Agreement”), dated as of June 29, 2009 by and among the Company, Euramax Holdings Limited, Euramax International Holdings B.V., Euramax Netherlands B.V., Euramax Europe B.V. (collectively, the “Existing First Lien Credit Agreement Borrowers”), certain subsidiaries of the Company and General Electric Capital Corporation, as agent for the parties thereto;

 

WHEREAS, the Existing First Lien Credit Agreement Borrowers intend to repay the Existing First Lien Credit Agreement in full with the proceeds of the First Lien Facility on the Closing Date;

 

WHEREAS, the Company has requested, and the Initial Lenders have agreed, that the Initial Lenders shall, in lieu of receipt of the cash payment due to them on account of the Designated Existing Lender Loans (as defined below) pursuant to which the Company is the sole borrower, exchange such Designated Existing Lender Loans for the Loans in accordance with the terms of this Agreement;

 

WHEREAS, the Company has requested, and the Initial Lenders have agreed, that the Initial Lenders shall advance additional funds, if any, to the Company in accordance with the terms of this Agreement; and

 

WHEREAS, each of the Guarantors is willing to guaranty the obligations of the Company under this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, subject to the conditions hereof, the parties hereto agree as follows.

 

SECTION 1.                                                    DEFINITIONS AND INTERPRETATION

 

1.1.   Definitions.  The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

 

1











 

“ABL Bank Products Agreements” means any bank products agreements (including, without limitation, credit cards, debit cards, stored value cards and the processing of payments and other administrative services with respect to any of the foregoing) entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.”

 

“ABL Cash Management Agreements” means any cash management or other bank products agreements entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.

 

“ABL Credit Facility” means that certain Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement, to be dated as of the Closing Date, among the borrowers and guarantors named therein (which may include the Company and the Guarantors as borrower, co-borrower, guarantor, obligor, co-obligor or otherwise), the lenders and agents from time to time party thereto, and Regions Bank, as administrative agent, and any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as further amended, restated, adjusted, waived, renewed, modified, refunded, replaced, restated, restructured, increased, supplemented or refinanced in whole or in part from time to time, regardless of whether such amendment, restatement, adjustment, waiver, modification, renewal, refunding, replacement, restatement, restructuring, increase, supplement or refinancing is with the same financial institutions (whether as agents or lenders) or otherwise and any one or more indentures, note purchase agreements, credit facilities, commercial paper facilities, or other financing arrangements or agreements that replace, refund or refinance all or any part of the loans, notes, or other commitments thereunder, including any such replacement, refunding or refinancing facility or indenture or other financing arrangements or agreements that increases the amount borrowable or issuable thereunder or alters the maturity thereof.

 

“ABL Debt” means Indebtedness under the ABL Credit Facility, the ABL Documents, the ABL Bank Products Agreements, the ABL Hedge Agreements and the ABL Cash Management Agreements.

 

“ABL Documents” means the ABL Credit Facility, any additional credit agreement, note purchase agreement, indenture or other agreement related thereto and all other loan or note documents, collateral or security documents, notes, guarantees, instruments and agreements governing or evidencing, or executed or delivered in connection with, the ABL Credit Facility, including the ABL Bank Products Agreements, the ABL Hedge Agreements and the ABL Cash Management Agreements, as such agreements or instruments may be amended, supplemented, modified, restated, replaced, renewed, refunded, restructured, increased or refinanced from time to time (including successive amendments, supplements, modifications, restatements, replacements, renewals, refundings, restructurings, increases and refinancings).

 

“ABL Hedge Agreements” means any hedge agreements entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.

 

2











 

“ABL Obligations” means all indebtedness, liabilities and obligations (of every kind or nature) incurred or arising under or relating to the ABL Documents and all other obligations in respect thereof.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)   Indebtedness of any other Person existing at the time such other Person is merged with or into, or becomes a Subsidiary of, such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and

 

(2)   Indebtedness secured by a Lien encumbering any asset acquired by the specified Person.

 

“Administrative Agent” means any Person (i) selected by the Company and (ii) acceptable to the Initial Lenders who accepts an appointment as “Administrative Agent” hereunder and executes a joinder hereto in form and substance acceptable to the Company and the Initial Lenders (together with its permitted successors and assigns).

 

“Administrative Agent’s Fee Letter” means any agreement between the Administrative Agent and the Company in respect of fees payable to the Administrative Agent for its services in connection with this Agreement.

 

“Adverse Proceeding” means any claim, litigation, demand, action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of the Company or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims) or by any other Person, whether pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries or any property of the Company or any of their Subsidiaries.

 

“Advisor” as defined in Section 5.6.

 

“Affected Lender” as defined in Section 2.18(b).

 

“Affected Loans” as defined in Section 2.18(b).

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that the Initial Lenders shall not be Affiliates of Holdings and its Subsidiaries for purposes of this Agreement.  For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.

 

“Aggregate Amounts Due” as defined in Section 2.17.

 

“Aggregate Payments” as defined in Section 7.2.

 

3











 

“Agreement” means this Credit and Guaranty Agreement, as it may be amended, supplemented or otherwise modified from time to time.

 

“Alternative Transaction” means any financing transaction or series of financing transactions entered into prior to May 16, 2011 that refinances, replaces, is substituted for, amends and restates or is an alternative to the Existing First Lien Credit Agreement, other than the First Lien Facility and this Agreement.

 

“Alternative Transaction Fee” as defined in Section 11.26(a).

 

“Alternative Transaction Notification” as defined in Section 11.26(b).

 

“Asset Sale” means:

 

(1)   the sale, lease (other than operating leases in the ordinary course of business), conveyance or other disposition of any property or assets, other than Equity Interests of the Company; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and the Company’s Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 2.14(a) of this Agreement and/or the provisions of Section 6.5 of this Agreement and not by the provisions of the covenant in Section 6.7 of this Agreement; and

 

(2)   the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale by the Company or any Restricted Subsidiary thereof of Equity Interests in any of its Restricted Subsidiaries (other than directors’ qualifying shares).

 

Notwithstanding the preceding, the following items shall be deemed not to be Asset Sales:

 

(1)   any single transaction or series of related transactions or Event of Loss that involves property or assets having a fair market value of less than $5.0 million;

 

(2)   a transfer of property or assets between or among the Company, its Restricted Subsidiaries and any Guarantor;

 

(3)   an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary thereof;

 

(4)   the sale, lease, assignment, license or sublease of equipment, inventory, accounts receivable or other assets in the ordinary course of business;

 

(5)   the sale or other disposition of cash or Cash Equivalents;

 

(6)   a Restricted Payment that is permitted by Section 6.3 of this Agreement or a Permitted Investment;

 

(7)   any sale, exchange or other disposition of any property or equipment that has become damaged, worn out, obsolete or otherwise unsuitable or unnecessary for use in connection with the business of the Company or its Restricted Subsidiaries and any sale or disposition of property in connection with scheduled turnarounds, maintenance and equipment and facility updates;

 

4











 

(8)   the licensing or sub-licensing of intellectual property in the ordinary course of business or consistent with past practice;

 

(9)   any sale or other disposition deemed to occur with creating, granting or perfecting a Lien not otherwise prohibited by the indenture or the note documents;

 

(10) any issuance, sale, or transfer of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

 

(11) the surrender or waiver of contract rights or settlement, release or surrender of a contract, tort or other litigation claim in the ordinary course of business;

 

(12) foreclosures, condemnations or any similar action on assets;

 

(13) the lease, assignment or sublease of any real or personal property in the ordinary course of business; and

 

(14) sales of accounts receivable, or participations therein, and any related assets, in connection with any Permitted Receivables Financing.

 

“Assignment Agreement” means an Assignment and Assumption Agreement in form and substance reasonably satisfactory to the Initial Lenders and the Company, with such amendments or modifications as may be approved by Administrative Agent.

 

“Assignment Effective Date” as defined in Section 11.6(b).

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however, that if the sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capital Lease Obligation.

 

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

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act.  The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.

 

“Beneficiary” means the Administrative Agent and each Lender.

 

“Board of Directors” means (i) with respect to a corporation, the board of directors of the corporation, or a duly authorized committee thereof, (ii) with respect to a partnership, the Board of Directors of the general partner of the partnership, and (iii) with respect to any other Person, the board or committee of such Person serving a similar function.

 

5











 

“Borrowing Base” means, as of any date, an amount equal to:

 

(1)   90% of the face amount of all accounts receivable owned by the Company and its Restricted Subsidiaries as of the end of the month preceding such date that were not more than 60 days past due; plus

 

(2)   85% of the book value of all inventory owned by the Company and its Restricted Subsidiaries as of the end of the month preceding such date.

 

“business day” or “Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the city of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

 

“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

 

“Capital Stock” means:

 

(1)   in the case of a corporation, corporate stock;

 

(2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)   in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Cash Equivalents” means:

 

(1)   United States dollars;

 

(2)   securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than two years from the date of acquisition;

 

(3)   time deposits, demand deposits, money market deposits, certificates of deposit and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $250.0 million (or $100.0 million in the case of a non-U.S. bank).

 

(4)   repurchase obligations for underlying securities of the types described in clauses (2), (3) and (7) entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)   commercial paper rated at least P-1 by Moody’s Investors Service, Inc. or at least A-1 by Standard & Poor’s Rating Services (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency) and in each case maturing within two years after the date of acquisition;

 

6











 

(6)   marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively, or liquidity funds or other similar money market mutual funds, with a rating of at least Aaa by Moody’s or AAAm by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency);

 

(7)   securities issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority of any such state, commonwealth or territory or any public instrumentality thereof, maturing within two years from the date of acquisition thereof and having an investment grade rating from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services;

 

(8)   money market funds (or other investment funds) at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (7) of this definition;

 

(9)   (a)  Euros or any national currency of any participating member state of the EMU;

 

(b)   local currency held by the Company or any of its Restricted Subsidiaries from time to time in the ordinary course of business;

 

(c)   securities issued or directly and fully guaranteed by the sovereign nation or any agency thereof (provided that the full faith and credit of such sovereign nation is pledged in support thereof) in which the Company or any of its Restricted Subsidiaries is organized or is conducting business having maturities of not more than one year from the date of acquisition; and

 

(d)   investments of the type and maturity described in clauses (3) through (8) above of foreign obligors, which investments or obligors satisfy the requirements and have ratings described in such clauses.

 

“Certificate re Non-Bank Status” means a certificate in form and substance reasonably satisfactory to the Initial Lenders and the Company.

 

“Change of Control” means the occurrence of any of the following:

 

(i)            the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than one or more Permitted Holders;

 

(ii)           the adoption of a plan relating to the liquidation or dissolution of the Company (unless, after such liquidation or dissolution, Holdings assumes all of the obligations of the Company under this Agreements for the benefit of the holders of the Loans);

 

(iii)          any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act, except that in no event shall the parties to the Stockholders Agreement be deemed a “group” solely by virtue of being parties to the Stockholders Agreement as in effect on the date hereof), other than one or more Permitted Holders or a Permitted Group

 

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has become the ultimate Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the Voting Stock of the Company;

 

(iv)          the first day on which a majority of the members of the Board of Directors of the Company or Holdings are not Continuing Directors; or

 

(v)           a “Change of Control” shall have occurred under the Notes Indenture.

 

provided, however, that a transaction in which Holdings becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (a) the shareholders of Holdings immediately prior to such transaction “beneficially own” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of Holdings, immediately following the consummation of such transaction or (b) immediately following the consummation of such transaction, no “person” (as such term is defined above), other than such other Person (but including the holders of the Capital Stock of such other Person), “beneficially owns” (as such term is defined above), directly or indirectly through one or more intermediaries, more than 35% of the voting power of the outstanding voting stock of Holdings; and provided, further, however, that any transaction in which the Company remains a Wholly Owned Restricted Subsidiary of Holdings, but one or more intermediate holding companies between Holdings and the Company are added, liquidated, merged or consolidated out of existence, shall not constitute a Change of Control.  A person or group shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement (or voting or option agreement related thereto) until the consummation of the transactions contemplated by such agreement.

 

“Change of Control Prepayment” as defined in Section 2.14.

 

“Change of Control Prepayment Date” as defined in Section 2.14.

 

“Change of Control Offer” as defined in Section 2.14.

 

“Closing Date” means the date on which the conditions specified under Section 3.1 hereof are satisfied or waived.

 

“Commission” means the United States Securities and Exchange Commission and any successor organization.

 

“Commitments” means the commitment of the Initial Lenders on the Closing Date in an amount set forth opposite such Initial Lender’s name on Schedule 1.

 

“Company” as defined in the preamble hereto.

 

“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(1)   provision for taxes based on income or profits or capital gains of such Person and its Restricted Subsidiaries for such period, including without limitation state, franchise and

 

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similar taxes and foreign withholding taxes of such Person and its Restricted Subsidiaries paid or accrued during such period (including, without duplication, the amount of any payments made pursuant to clauses 12(a) and 12(b) of paragraph (B) under Section 6.3 of this Agreement), to the extent that such provision for taxes or payment was deducted in computing such Consolidated Net Income; plus

 

(2)   Fixed Charges of such Person and its Restricted Subsidiaries for such period (including without limitation (x) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (y) costs of surety bonds in connection with financing activities), to the extent that any such Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

(3)   depreciation and amortization (including amortization or impairment write-offs of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization was deducted in computing such Consolidated Net Income; plus

 

(4)   any other non-cash expenses or charges, including any impairment charge or asset write-offs or write-downs related to intangible assets (including goodwill), long-lived assets, and Investments in debt and equity securities pursuant to GAAP, reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated Cash Flow to such extent, and excluding amortization of a prepaid cash expense or charge that was paid in a prior period); plus

 

(5)   the amount of any integration costs or other business optimization expenses or costs deducted (and not added back) in such period in computing Consolidated Net Income incurred in connection with acquisitions, including any costs related to the closure and/or consolidation of facilities, and severance and relocation cost; plus

 

(6)   the amount of any minority interest expense consisting of income of a Restricted Subsidiary attributable to minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

 

(7)   any extraordinary, non-recurring or unusual gain or loss or expense, together with any related provision for taxes, to the extent deducted in computing such Consolidated Net Income; plus

 

(8)   the amount of cash restructuring charges not to exceed (x) $10.0 million in any twelve-month period and (y) $25.0 million in the aggregate (through the maturity of the Notes), to the extent deducted in computing such Consolidated Net Income; minus

 

(9)   non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

 

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(1)   the Net Income of any Person, other than the specified Person, that is not a Restricted Subsidiary of the specified Person or that is accounted for by the equity method of accounting shall not be included, except that Consolidated Net Income shall be increased by the amount of dividends or distributions or other payments that are paid in cash (or to the extent converted into cash) or Cash Equivalents to the specified Person or a Restricted Subsidiary thereof during such period;

 

(2)   solely for the purpose of determining the amount available for Restricted Payments under clause 3(a) of Section 6.3(a) hereof, the Net Income of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its equityholders, unless such restrictions with respect to the declaration and payment of dividends or distributions have been properly waived for such entire period; provided that Consolidated Net Income will be increased by the amount of dividends or other distributions or other payments paid in cash (or to the extent converted into cash) or Cash Equivalents to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

 

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

 

(4)   any amortization of fees or expenses that have been capitalized shall be excluded;

 

(5)   non-cash charges relating to employee benefit or management compensation plans of the Company or any Restricted Subsidiary thereof or non-cash pension expenses or non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards for the benefit of the members of the Board of Directors of Holdings, any direct or indirect parent of the Company, or the Company or officers or employees of Holdings, any direct or indirect parent of the Company, or the Company and its Restricted Subsidiaries shall be excluded (other than in each case any non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense incurred in a prior period);

 

(6)   any non-recurring charges or expenses incurred in connection with the Refinancing Transaction shall be excluded;

 

(7)   any non-cash restructuring charges shall be excluded;

 

(8)   any non-cash impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP, shall be excluded;

 

(9)   any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any sale of assets outside the ordinary course of business of such Person or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or (c) the extinguishment of any Indebtedness or Hedging Obligations or other derivative instruments of such Person or any of its Restricted Subsidiaries, shall, in each case, be excluded;

 

(10) any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of

 

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disposed, abandoned, transferred, closed or discontinued operations shall, in each case, be excluded;

 

(11) any non-cash impact attributable to the application of the purchase method of accounting in accordance with GAAP, including without limitation the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write up of assets for such period on a consolidated basis in accordance with GAAP to the extent such non-cash expense results from such purchase accounting adjustments;

 

(12) any fees and expenses incurred during such period, or any amortization or writeoff thereof or writeoff for such period, in connection with any acquisition, disposition, recapitalization, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests, financing transaction or amendment or modification of any debt instrument (including, in each case, any such transaction undertaken but not completed) and any charges or nonrecurring merger costs incurred during such period as a result of any such transaction, shall be excluded;

 

(13) accruals and reserves that are established or adjusted within 12 months of the date of original issue of the notes that are so required to be established or adjusted as a result of the Refinancing Transaction in accordance with GAAP shall be excluded;

 

(14) unrealized gains and losses related to Hedging Obligations shall be excluded;

 

(15) the Net Income will be reduced by the amount of any payments made pursuant to clauses 12(a) through 12(d) of paragraph (B) under Section 6.3 of this Agreement;

 

(16) any gain or loss realized upon the termination of any employee benefit plan together with any related provision for taxes (or the tax effect of any such termination) shall be excluded;

 

(17) gains or losses resulting from the translation into U.S. dollars of long term and intercompany obligations; and

 

(18) amortization of any amounts required or permitted by SFAS 141(R) (including non-cash write-ups or non-cash charges relating to inventory and fixed assets) or SFAS 142 (including non-cash charges related to intangible assets and goodwill) to be recorded on such Person’s balance sheet.

 

“Consolidated Secured Debt Ratio” means, as of any date, the ratio of (a) Consolidated Secured Indebtedness of the Company and the Restricted Subsidiaries as of such date, less an amount equal to the positive difference (if any) between (i) the aggregate cash and Cash Equivalents of the Company and its Restricted Subsidiaries as of such date and (ii) $15,000,000, to (b) the aggregate amount of Consolidated Cash Flow of the Company and the Restricted Subsidiaries for the period of four consecutive full fiscal quarters most recently ended for which internal financial statements are available, with such pro forma adjustments to Consolidated Secured Indebtedness and Consolidated Cash Flow as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio. For purposes of this calculation, (i) the amount of Indebtedness outstanding as of any date of determination shall not include any Hedging Obligations that are incurred for non-speculative purposes and (ii) the amount of debt outstanding under any Credit Facility as of any

 

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date of determination shall include the amount available for borrowing thereunder whether or not borrowed.

 

“Consolidated Secured Indebtedness” means, as of any date of determination, Consolidated Total Indebtedness secured by Liens.

 

“Consolidated Total Assets” of any Person means, as of any date, the amount which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any like caption) on a consolidated balance sheet of such Person and its Restricted Subsidiaries, as of the end of the most recently ended fiscal quarter for which internal financial statements are available (giving pro forma effect to any acquisitions or dispositions of assets or properties that have been made by the specified Person or any of its Restricted Subsidiaries subsequent to the date of such balance sheet, including through mergers or consolidations).

 

“Consolidated Total Indebtedness”  means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness of the Company and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capital Lease Obligations, Obligations in respect of financing of receivables, Attributable Debt in respect of Sale and Lease Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (y) any undrawn letters of credit and (z) any intercompany Indebtedness) and (2) the aggregate amount of all outstanding Disqualified Stock of the Company and all Disqualified Stock and preferred stock of the Restricted Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and preferred stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis. For purposes hereof, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or preferred stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or preferred stock as if such Disqualified Stock or preferred stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or preferred stock, such fair market value shall be determined reasonably and in good faith by the Company.

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company or Holdings, as the case may be, who (i) was a member of such Board of Directors on the Closing Date, or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

 

“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

 

“Contributing Guarantors” as defined in Section 7.2.

 

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“Contribution Indebtedness” means Indebtedness of the Company or any Subsidiary Guarantor in an aggregate principal amount equal to the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the Company or such Subsidiary Guarantor after the Closing Date; provided that:

 

(1)   such cash contributions have not been used to make a Restricted Payment, and

 

(2)   such Contribution Indebtedness (a) is incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers’ Certificate on the incurrence date thereof.

 

“controlled foreign corporation” means a (i) controlled foreign corporation within the meaning of Section 957(a) of the Internal Revenue Code and (ii) New Holdco BV and any of its Subsidiaries.

 

“Counterpart Agreement” means a Counterpart Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Company delivered by a Domestic Subsidiary pursuant to Section 5.10.

 

“Credit Document” means any of this Agreement, the Promissory Notes, if any, the Holdings Guaranty, and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of the Administrative Agent or any Lender in connection herewith.

 

“Credit Facilities” means one or more debt facilities (including, without limitation, the ABL Credit Facility), credit agreements, commercial paper facilities, note purchase agreements, indentures, factoring agreements, receivables purchase/sale or other agreements, in each case with banks, lenders, purchasers, investors, trustees, agents or other representatives of any of the foregoing, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables or interests in receivables to such lenders or other persons or to special purpose entities formed to borrow from such lenders or other persons against such receivables or sell such receivables or interests in receivables and including Permitted Receivables Financings), letters of credit, notes or other borrowings or other extensions of credit, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, in each case, as amended, restated, modified, renewed, refunded, restated, restructured, increased, supplemented, replaced or refinanced in whole or in part from time to time, including any replacement, refunding or refinancing facility or agreement that increases the amount permitted to be borrowed thereunder or alters the maturity thereof or adds entities as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender, group of lenders, or otherwise.

 

“Credit Document Obligations” means all obligations of every nature of each Credit Party from time to time owed to the Administrative Agent, the Lenders or any of them, under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), fees (including prepayment fees), expenses, indemnification or otherwise.

 

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“Credit Party” means each Person (other than any Agent or any Lender or any representative thereof), from time to time party to a Credit Document and their respective successors and assigns, including Holdings, Company and the Subsidiary Guarantors.

 

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

 

“Designated Existing Lender Loans” means as to any Existing Lender, such Lender’s Existing Lender Loans that such Lender shall designate in a notice to the Company and Administrative Agent as being satisfied, in lieu of cash repayment due to it, by its receipt of Loans hereunder in accordance with Section 2.1(a).

 

“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary of the Company in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

“Designated Preferred Stock” means preferred stock of Holdings, the Company or any parent corporation thereof (in each case other than Disqualified Stock) that is issued for cash (other than to the Company or any of their Subsidiaries) and is so designated as Designated Preferred Stock pursuant to an Officer’s Certificate executed by the principal financial officer of Holdings, the Company or the applicable parent corporation thereof, as the case may be, on the issuance date thereof.

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature; provided, however, that only the portion of the Capital Stock which so matures, is mandatorily redeemable or is redeemable at the option of the holder prior to such date shall be deemed to be Disqualified Stock.  Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a Change of Control (or similarly defined term) or an Asset Sale (or similarly defined term) shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 6.3 hereof.  The term “Disqualified Stock” shall also include any options, warrants or other rights that are convertible into Disqualified Stock or that are redeemable at the option of the holder, or required to be redeemed, prior to the date that is 91 days after the date on which the notes mature.  Disqualified Stock shall not include Capital Stock which is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

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“Dollar Equivalent” means (i) with respect to an amount denominated in Euros on any date, the amount of Dollars that may be purchased with such amount of Euros at the Spot Exchange Rate on such date, (ii) with respect to an amount denominated in Sterling on any date, the amount of Dollars that may be purchased with such amount of Sterling at the Spot Exchange Rate on such date and (iii) with respect to an amount denominated in Dollars on any date, the principal amount thereof.

 

“Dollars” and the sign “$” mean the lawful money of the United States of America.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia.

 

“E-Fax” means any system used to receive or transmit faxes electronically.

 

“EN BV” means Euramax Netherlands B.V.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Electronic Transmission” means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.

 

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Related Fund and (ii) any other Person acceptable to Administrative Agent which extends credit or buys loans in the ordinary (it being understood and agreed that the Administrative Agent’s acceptance of an assignment shall only be delayed or withheld as a result of such Person failing to deliver customary and necessary transfer documents or such assignment violating applicable law); provided, neither Company or any of its Subsidiaries or Holdings shall be an Eligible Assignee.

 

“Environmental Claim” means any Adverse Proceeding, notice, notice of violation, liability, loss, decree, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

 

“Environmental Laws” means any and all current or future foreign or domestic, supranational, national, federal, state, provincial or local (or any subdivision) statutes, laws, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities, including any common law, relating to (i) any Hazardous Materials Activity; (ii) the protection of the environment, including any natural

 

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resources, (iii) the Release, threatened Release, generation, use, storage, transportation, handling, or disposal of, or exposure to, Hazardous Materials; or (iv) occupational safety and health, industrial hygiene, in any manner applicable to Company or any of its Subsidiaries or any Facility.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

 

“E-Signature” means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.

 

“E-System” means any electronic system, including Intralinks® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by either Administrative Agent or any other Person, providing for access to data protected by passcodes or other security system.

 

“Euro” and “€” means the single currency of the European Union as constituted by the Treaty on European Union and as referred to in EMU Legislation.

 

“Event of Default” means each of the conditions or events set forth in Section 8.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

 

“Excluded Contribution” means net cash proceeds received by the Company and its Restricted Subsidiaries as capital contributions after the Closing Date or from the issuance or sale (other than to a Restricted Subsidiary) of Equity Interests (other than Disqualified Stock) of the Company (or Holdings or a direct or indirect parent of the Company to the extent contributed to the Company), in each case to the extent designated as an Excluded Contribution pursuant to an Officers’ Certificate and not previously included in the calculation set forth in clause (3)(b) of Section 6.3(A) hereof for purposes of determining whether a Restricted Payment may be made.

 

“Excluded Subsidiary” means any Subsidiary that is:

 

(1)   a controlled foreign corporation;

 

(2)   a Subsidiary of a controlled foreign corporation; and

 

(4)  a Restricted Subsidiary of the Company; provided that (a) the total assets of all Restricted Subsidiaries that are Excluded Subsidiaries solely as a result of this clause (3), as reflected on their respective most recent balance sheets prepared in accordance with GAAP, do not in the aggregate at any time exceed $1.0 million and (b) the total revenues of all Restricted Subsidiaries that are Excluded Subsidiaries solely as a result of this clause (3) for the twelve-month period ending on the last day of the most recent fiscal quarter for which financial

 

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statements for the Company are available, as reflected on such income statements, do not in the aggregate exceed $5.0 million

 

For the sake of clarity, (i) New US LLC 1, which upon the consummation of the offering of the Notes will be a Subsidiary of New Holdco BV and (ii) New US LLC 2, which upon consummation of the offering of the Notes will be a Subsidiary EN BV, shall each be an Excluded Subsidiary, and each shall not be a Guarantor as of the Closing Date.

 

“Existing First Lien Credit Agreement” as defined in the Recitals.

 

“Existing First Lien Credit Agreement Borrowers”

 

“Existing Lender Loans” as defined in the Recitals.

 

“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Company or any of its Subsidiaries or any of their respective predecessors.

 

“fair market value” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy.  For purposes of determining compliance with the provisions of this Agreement,  unless provided otherwise, any determination that the fair market value of assets other than cash or Cash Equivalents is equal to or greater than $25.0 million will be made by the Company’s or Holdings’ Board of Directors and evidenced by a resolution thereof and set forth in an Officers’ Certificate.

 

“Fair Share” as defined in Section 7.2.

 

“Fair Share Contribution Amount” as defined in Section 7.2.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as such Sections are in effect as of the date of this Agreement (or any successor or amended version that is analogous), including any regulation, or official interpretation thereof issued after the date of this Agreement.

 

“Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of Company that such financial statements fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.

 

“First Lien Facility” means the Notes Indenture and the Indebtedness issued pursuant to the Notes Indenture on the Closing Date, not to exceed $400 million in the aggregate.

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on the last Friday of each calendar year.

 

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“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period.  In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, retires or redeems any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any receivables financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period unless such Indebtedness has been permanently repaid and has not been replaced) or issues, repurchases or redeems preferred stock or Disqualified Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, retirement or redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock or Disqualified Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1)   Investments, acquisitions, dispositions, mergers, consolidations, business restructurings, operational changes and any financing transactions relating to any of the foregoing (collectively, “Relevant Transactions”), in each case that have been made by the specified Person or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, shall be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated on a pro forma basis, including Pro Forma Cost Savings, if applicable; if since the beginning of such period any Person that subsequently becomes a Restricted Subsidiary of the Company or was merged with or into the Company or any Restricted Subsidiary thereof since the beginning of such period shall have made any Relevant Transaction that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Relevant Transaction had occurred at the beginning of the applicable four-quarter period and Consolidated Cash Flow for such reference period shall be calculated on a pro forma basis, including Pro Forma Cost Savings;

 

(2)   the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, shall be excluded;

 

(3)   the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date; and

 

(4)   consolidated interest expense attributable to interest on any Indebtedness (whether existing or being incurred) computed on a pro forma basis and bearing a floating interest rate shall be computed as if the rate in effect on the Calculation Date (taking into account any interest rate option, swap, cap or similar agreement applicable to such Indebtedness if such agreement has a remaining term in excess of 12 months or, if shorter, at least equal to the

 

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remaining term of such Indebtedness) had been the applicable rate for the entire period.  Interest on Indebtedness that may optionally be determined at an interest rate based on a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.  Interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based on the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition.

 

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

 

(1)   the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, to the extent deducted (and not added back) in computing Consolidated Net Income, including, without limitation, (a) amortization of original issue discount, (b) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (c) the interest component of any deferred payment obligations, (d) the interest component of all payments associated with Capital Lease Obligations, (e) imputed interest with respect to Attributable Debt, (f) commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and (g) net of the effect of all payments made or received pursuant to interest rate Hedging Obligations, but in each case excluding (v) accretion of accrual of discounted liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of any outstanding Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment or other financing fees; plus

 

(2)   the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3)   any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

 

(4)   the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of such Person or any of its Restricted Subsidiaries, and all cash dividends on any series of preferred stock of any Restricted Subsidiary of such Person, other than dividends on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, less

 

(5)   interest income for such period,

 

in each case, on a consolidated basis and in accordance with GAAP.

 

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“Foreign ABL Guarantee” means a Guarantee by the Company or a Subsidiary Guarantor of any Indebtedness under asset-based facilities (the borrowings under which are limited by the “borrowing base” or a similar concept) of Foreign Subsidiaries; provided, however, that any payment under such Guarantee shall not be permitted under clause (13) of the definition “Permitted Investment” and shall require an independent exception to Section 6.3.

 

“Foreign Subsidiary” means any Restricted Subsidiary of the Company other than a Domestic Subsidiary.

 

“Funding Guarantors” as defined in Section 7.2.

 

“GAAP” means generally accepted accounting principles in the United States as in effect on the Closing Date. For clarity purposes, in determining whether a lease is a capitalized lease or an operating lease and whether interest expense exists, such determination shall be made in accordance with GAAP as in effect on the Closing Date. At any time after the Closing Date, the Company may elect to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in the indenture); provided that any such election, once made, shall be irrevocable; provided  further, that any calculation or determination in the indenture that requires the application of GAAP for periods that include fiscal quarters ended prior to the Company’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.  The Company shall give notice of any such election made in accordance with this definition to the Requisite Lenders.

 

“Governmental Act” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

 

“Governmental Authority” means any foreign or domestic, federal, state, provincial, municipal, supranational, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court.

 

“Governmental Authorization” means any permit, license, waiver, approval, authorization, plan, directive, consent order or consent decree of or from, or issued by, any Governmental Authority.

 

“Guarantee” means, as to any Person, a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness of another Person.

 

“Guaranteed Obligations” as defined in Section 7.1.

 

“Guarantors” means:

 

(1)   Holdings;

 

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(2)   each direct or indirect Wholly Owned Restricted Subsidiary of the Company (other than Excluded Subsidiaries);

 

(3)   any other Restricted Subsidiary of the Company that has issued a guarantee of any other Indebtedness of the Company or any Guarantor (including the First Lien Facility) or otherwise is an obligor under the ABL Credit Facility; and

 

(4)   any other Restricted Subsidiary of the Company that executes a Guarantee of the Credit Document Obligations in accordance with the provisions of this Agreement;

 

and their respective successors and assigns until released from their obligations under their Loan Guarantees and this Agreement in accordance with the terms of this Agreement.

 

“Hazardous Materials” means any liquid, solid or gaseous chemical, material, waste or substance which is prohibited, limited or regulated as hazardous or toxic or as a pollutant or contaminant pursuant to any Environmental Law or by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment, including, without limitation, asbestos, petroleum and any breakdown constituents or derivatives, polychlorinated biphenyls, radioactive substances or radon.

 

“Hazardous Materials Activity” means any activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, emission, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of, or exposure to, any Hazardous Materials, in each case, reasonably likely to give rise to liability under, or to be in violation of, Environmental Law, and any Remedial Action.

 

“Hedge Agreements” means:

 

(1)   interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and other agreements or arrangements designed for the purpose of fixing, hedging, mitigating or swapping interest rate risk either generally or under specific contingencies;

 

(2)   foreign exchange contracts, currency swap agreements and other agreements or arrangements designed for the purpose of fixing, hedging, mitigating or swapping foreign currency exchange rate risk either generally or under specific contingencies; and

 

(3)   commodity swap agreements, commodity cap agreements or commodity collar agreements designed for the purpose of fixing, hedging, mitigating or swapping commodity risk either generally or under specific contingencies.

 

“Hedging Obligations” means the obligations owed by the Company and the Guarantors to the counterparties under the Hedge Agreements, including any guarantee obligations in respect thereof.

 

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under

 

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such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

 

“Historical Financial Statements” means as of the Closing Date, (i) the audited financial statements of Company and its Subsidiaries, for the immediately preceding three Fiscal Years (including the 2010 Fiscal Year), consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Years, and (ii) the unaudited financial statements of Holdings and its Subsidiaries as at the most recently ended Fiscal Quarter, consisting of a balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for the quarterly and year to date period ending on such date, and, in the case of clauses (i) and (ii), certified by the chief financial officer of Holdings that they fairly present, in all material respects, the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.

 

“Holdings” means Euramax Holdings, Inc., a Delaware corporation.

 

“Holdings Guaranty” means a guaranty agreement, in form and substance satisfactory to the Administrative Agent and the Lenders, pursuant to which Holdings unconditionally guarantees the Company’s Obligations under the Credit Documents.

 

“IFRS” means the international accounting standards promulgated by the International Accounting Standards Board and its predecessors, as adopted by the European Union, as in effect from time to time.

 

“incur” means, with respect to any Indebtedness, to incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness; provided that (1) any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company will be deemed to be incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Company and (2) neither the accrual of interest nor the accretion of original issue discount nor the payment of interest in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock (to the extent provided for when the Indebtedness or Disqualified Stock on which such interest or dividend is paid was originally issued) shall be considered an incurrence of Indebtedness; provided that in each case the amount thereof is for all other purposes included in the Fixed Charges of the Company or its Restricted Subsidiary as accrued and the amount of any such accretion or payment of interest in the form of additional Indebtedness or additional shares of Disqualified Stock is for all purposes included in the Indebtedness of the Company or its Restricted Subsidiary as accreted or paid.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

 

(1)   in respect of borrowed money (including, for the avoidance of doubt, the purchase price in respect of any sale of receivables, in a Permitted Receivables Financing or otherwise);

 

(2)   evidenced by bonds, notes, debentures or similar instruments;

 

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(3)   evidenced by letters of credit (or reimbursement agreements in respect thereof), but excluding obligations with respect to letters of credit (including trade letters of credit) securing obligations (other than obligations described in clause (1) or (2) above or clause (4), (5), (6), (7) or (8) below) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than the fifth business day following receipt by such Person of a demand for reimbursement;

 

(4)   in respect of banker’s acceptances;

 

(5)   in respect of Capital Lease Obligations and Attributable Debt;

 

(6)   in respect of the balance deferred and unpaid of the purchase price of any property, except (i) any such balance that constitutes an accrued expense or trade payable or similar obligation to a trade creditor and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;

 

(7)   representing Hedging Obligations, other than Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; or

 

(8)   representing Disqualified Stock valued at the greater of its voluntary or involuntary maximum fixed repurchase price.

 

In addition, the term “Indebtedness” includes (1) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and (2) to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.  For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value shall be determined in good faith by the Board of Directors of the Company or Holdings.

 

The amount of any Indebtedness outstanding as of any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, and shall be:

 

(1)   the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

 

(2)   the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness;

 

provided that Indebtedness shall not include:

 

(i)           any liability for foreign, federal, state, local or other taxes,

 

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(ii)            performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations not in connection with money borrowed, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business,

 

(iii)            any liability arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such liability is extinguished within five business days of its incurrence,

 

(iv)           any liability owed to any Person in connection with workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business,

 

(v)           any indebtedness existing on the Closing Date that has been satisfied and discharged or defeased by legal defeasance, or

 

(vi)           agreements providing for indemnification, adjustment of purchase price or earnouts or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition or acquisition of any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received in connection with such transaction.

 

No Indebtedness of any Person will be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.

 

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary pursuant to Environmental Law to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel and/or consultants for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person (including the Company, Holdings or any Subsidiary), whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the

 

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other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make or making or deemed making of the Loans or agreement to convert the Designated Existing Lender Loans pursuant to which the Company is the sole borrower into Loans or the use or intended use of the proceeds thereof) any enforcement of any of the Credit Documents (including the enforcement of the Loan Guarantee or Holdings Guaranty)); or (ii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from any past or present activity, operation, land ownership, or practice of Company or any of its Subsidiaries or any other Environmental Claim brought against Company or any of its Subsidiaries; provided that Taxes shall be governed by Section 2.20 and shall not be covered under Indemnified Liabilities.

 

“Indemnitee” as defined in Section 11.3.

 

“Independent Outside Director” means any Person (a) that is a member of the board of directors of Holdings or any Subsidiary thereof and (b) that is not (i) (x) an Affiliate of Holdings or any Subsidiary (other than solely by virtue of being a director of any such entity), a holder of Capital Stock of Holdings (other than Capital Stock received as compensation for directorship), or any Affiliate of any of the foregoing, (ii) an employee or officer of (x) Holdings or any Subsidiary thereof, a Second Lien Affiliate or an Affiliate of any such Person (other than solely by virtue of being a director of Holdings or any Subsidiary thereof) or (y) any Related Fund or any manager or investment advisor of any Person or Related Fund that holds any Capital Stock of Holdings.

 

“Initial Lenders” means the Lenders as of the Closing Date.

 

“Interest Payment Date” means (i) the last Business Day of each March, June, September and December, and (ii) the Maturity Date.

 

“Interest Period” means the period of time between each successive Interest Payment Date.

 

“Interest Rate” means (i) if the interest rate (including original issue discount and fees but excluding any selling, brokerage or initial purchaser discount, commissions and fees) of the First Lien Facility is no greater than 10.25%, (a) 12.25% per annum with respect to any Interest Period as to which no PIK Election has been made and (b) 14.25% with respect to any Interest Period as to which a PIK Election has been made and (ii) if the interest rate (including original issue discount and fees but excluding any selling, brokerage or initial purchaser discounts, commissions and fees) of the First Lien Facility is greater than 10.25%, the Interest Rate (including original issue discount and fees but excluding any selling, brokerage or initial purchaser discount, commissions and fees) of the First Lien Facility plus (a) 2.50% per annum with respect to any Interest Period as to which no PIK Election has been made and (b) 4.50% per annum with respect to any Interest Period as to which a PIK Election has been made; provided, that if the Maturity Date of the Loans has been extended beyond five and one-half (5 1/2) years due to the extension of the Stated Maturity of the First Lien Facility such that the Maturity Date occurs six months after the Stated Maturity of the First Lien Facility, the Interest Rate shall be increased as follows: (x) if the Stated Maturity of the First Lien Facility as of the Closing Date is more than five and one-half (5 1/2) years but not more than six (6) years, the

 

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rates set forth above shall in each case be increased by an additional 0.50 % per annum and (y) if the Stated Maturity of the First Lien Facility as of the Closing Date is more than six (6) years but not more than seven (7) years, the rates set forth above shall in each case be increased (after giving effect to the increase in the foregoing clause (x) by an additional 0.25% per annum; provided, further, that, without prejudice to the increase in rate contemplated by the immediately preceding proviso (i.e., in addition thereto, to the extent applicable), if the Company elects pursuant to Section 2.1 to cause the Lenders to fund less than the maximum permissible amount of Loans hereunder, then the rates set forth above shall in each case be increased by an additional 1.00% per annum.

 

“Insolvency or Liquidation Proceeding” means:

 

(1)   any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to either Company or any Guarantor;

 

(2)   any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to either Company or any Guarantor or with respect to a material portion of their respective assets;

 

(3)   any liquidation, dissolution, reorganization or winding up of either Company or any Guarantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

 

(4)   any assignment for the benefit of creditors or any other marshalling of assets and liabilities of either Company or any Guarantor.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“Investment Grade Securities” means:

 

(1)   securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof;

 

(2)   debt securities or debt instruments with an investment grade rating (but not including any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries);

 

(3)   investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) above which fund may also hold immaterial amounts of cash pending investment or distribution; and

 

(4)   corresponding instruments in countries other than the United States customarily utilized for high quality investments.

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the form of loans or other extensions of credit (including Guarantees, but excluding advances to customers or suppliers and trade credit in the ordinary course of business to the extent they are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Company or its Restricted Subsidiaries and endorsements for collection or deposit arising in the

 

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ordinary course of business), advances (excluding commission, payroll, travel and similar advances to officers, directors and employees made in the ordinary course of business, and excluding advances set forth in the preceding parenthetical), capital contributions (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.  In no event shall a guarantee of an operating lease of the Company or any Restricted Subsidiary be deemed an Investment.

 

If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Investment in such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 6.3 hereof.  The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person only if such Investment was made in contemplation of, or in connection with, the acquisition of such Person by the Company or such Restricted Subsidiary and the amount of any such Investment shall be determined as provided in the final paragraph of Section 6.3 hereof.

 

“Lender” means each financial institution that holds one or more Existing Lender Loans and is listed on the signature pages hereto as a Lender, and any other Person that becomes a party hereto pursuant to an Assignment Agreement.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including (1) any conditional sale or other title retention agreement, (2) any lease in the nature thereof, (3) any option or other agreement to sell or give a security interest and (4) any filing, authorized by or on behalf of the relevant grantor, of any financing statement under the UCC (or equivalent statutes) of any jurisdiction.

 

“Loan” means each actual and deemed advance by any Lender pursuant to Section 2.1 hereof, including Premium associated with each such actual advance or deemed advance.

 

“Loan Guarantees” means the guarantees of the Loans pursuant to Section 7 of this Agreement.

 

“Local Time” shall mean New York City time.

 

“Margin Stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” means a material adverse effect on and/or material adverse developments with respect to (i) the business, results of operations, properties, assets or

 

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condition (financial or otherwise) of Company and its Subsidiaries taken as a whole; (ii) the ability of the Credit Parties taken as a whole to fully and timely perform their Obligations; (iii) the legality, validity, binding effect or enforceability against a Credit Party of the Credit Agreement or any material Credit Document to which it is a party; or (iv) the rights, remedies and benefits available to, or conferred upon, any Agent or any Lender under the Credit Documents.

 

“Material Contract” means any written contract to which Company or any of its Subsidiaries is a party (other than the Credit Documents) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

 

“Material Credit Party” means any Credit Party that represents a material portion of the Credit Parties taken as a whole.

 

“Maturity Date” means the date that is one-half (1/2) year following the Stated Maturity of the First Lien Facility as of the Closing Date; provided that in no event shall the Maturity Date be later than July 31, 2018, and, provided, further, that the Company, in its sole discretion may fix the Maturity Date on the five and one-half year anniversary of the Closing Date, notwithstanding the Stated Maturity of the First Lien Facility.

 

“Maximum Available Amount” means, with respect to any Alternative Transaction, 51% of the amount of financing provided by such Alternative Transaction.

 

“MD&A” means a “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in substantially similar form as Company would be required to file with the Commission if Company were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act.

 

“Moody’s” means Moody’s Investor Services, Inc and any successor to the rating agency business thereto.

 

“NAIC” means The National Association of Insurance Commissioners, and any successor thereto.

 

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of dividends on preferred stock.

 

“Net Proceeds” means the aggregate cash proceeds, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not the interest component, thereof) received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (1) the direct costs relating to such Asset Sale and the sale or other disposition of any non-cash consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage or sales commissions, and any relocation expenses incurred as a result thereof, (2) taxes paid or payable as a result thereof, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (3) amounts required to be applied to the

 

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repayment of Indebtedness or other liabilities, secured by a Lien on the asset or assets that were the subject of such Asset Sale, or required to be paid as a result of such sale and (4) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, as well as any other reserve established in accordance with GAAP related to pension and other post-employment benefit liabilities, liabilities related to environmental matters, or any indemnification obligations associated with such transaction.

 

“New Holdco BV” means an entity organized under the laws of the Netherlands to be acquired by the Company on or prior to the Closing Date in connection with the planned restructuring of the Company’s Foreign Subsidiaries.

 

“New US LLC 1” means a limited liability company organized under the laws of the State of Delaware to be formed by the Company on or prior to the Closing Date in connection with the planned restructuring of the Company’s Foreign Subsidiaries.

 

“New US LLC 2” means a limited liability company organized under the laws of the State of Delaware to be formed by EN BV on or prior to the Closing Date in connection with the planned restructuring of the Company’s Foreign Subsidiaries.

 

“Non-Consenting Lender” as defined in Section 2.24.

 

“Non-U.S. Lender” as defined in Section 2.20(g).

 

“Notes” means the Senior Secured Notes issued pursuant to the Notes Indenture and any exchange notes issued in exchange or replacement therefor.

 

“Note Guarantee” means a Guarantee of the Notes pursuant to the Notes Indenture and any exchange Guarantees issued in exchange or replacement therefor.

 

“Notes Indenture” means  the Indenture among the Company, the guarantors named therein and Wells Fargo Bank, National Association dated the closing date relating to the Notes.

 

“Obligations” means any principal, interest, penalties, fees, expenses, indemnifications, reimbursements, damages and other liabilities (including all interest, fees and expenses accruing after the commencement of any Insolvency or Liquidation Proceeding, even if such interest, fees and expenses are not enforceable, allowable or allowed as a claim in such proceeding) under any Indebtedness.

 

“Obligee Guarantor” as defined in Section 7.7.

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Accounting Officer, the Director of Financial Planning and Analysis, the Treasurer, any Assistant Treasurer, the Controller, the General Counsel, the Secretary, any Executive Vice President, any Senior Vice President, any Vice President or any Assistant Vice President of such Person.

 

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“Officers’ Certificate” means a certificate signed on behalf of the Company by an Officer of the Company, who must be the principal executive officer, the principal operating officer, the principal financial officer, the treasurer, the principal accounting officer, the Director of Financial Planning and Analysis or the general counsel of the Company that meets the requirements of the indenture.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Requisite Lenders (who may be counsel to or an employee of the Company, any Subsidiary of the Company or the Requisite Lenders that meets the requirements of this Agreement).

 

“Organizational Documents” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws or memorandum and articles of association (or equivalent), as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, and its partnership agreement, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, and its operating agreement.  In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official including an official of a non-U.S. government, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official in such official’s relevant jurisdiction.

 

“parent of the Company” means any one or more parents of the Company, including, without limitation, Holdings and any Subsidiary of Holdings that owns, directly or indirectly, all or any portion of the Capital Stock of the Company.

 

“Pari Passu Obligations” has the meaning set forth in Section 6.7 of this Agreement.

 

“Participant” as defined in Section 11.6(g).

 

“Participant Register” as defined in Section 11.6(i).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Replacement Assets or a combination of Replacement Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person that is not the Company or any of its Restricted Subsidiaries; provided that any cash or Cash Equivalents received must be applied in accordance with the Section 6.7.

 

“Permitted Business” means any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the Closing Date and other businesses reasonably related, complementary or ancillary thereto and reasonable expansions or extensions thereof.

 

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“Permitted Debt” has the meaning set forth in Section 6.1(b).

 

“Permitted Group” means any group of Persons that is deemed to be a “person” (as that term is used in Section 13(d)(3) of the Exchange Act) and which group includes a Permitted Holder; provided that no single Person (together with its Affiliates) beneficially owns more of the Voting Stock of the Company that is beneficially owned by such group of Persons than is then collectively beneficially owned by the Permitted Holders in the aggregate.

 

“Permitted Holders” means any officer of Holdings or the Company who owns shares of Holdings’ common stock on the Closing Date, and their family members and relatives and any trusts created for the benefit of such persons and/or their family members and relatives and any estate, executor, administrator or other personal representative or beneficiary of any of the foregoing.

 

“Permitted Investments” means:

 

(1)          any Investment in the Company or a Restricted Subsidiary of the Company, including any investment in the Notes or the guarantees thereof; provided that Investments by the Company or any Subsidiary Guarantor in a Restricted Subsidiary that is not a Guarantor shall not exceed an aggregate amount of $35.0 million at any one time outstanding (for clarification, this proviso will not limit Investments by a Restricted Subsidiary that is not a Guarantor in a Restricted Subsidiary that is not a Guarantor);

 

(2)          any Investment in cash or Cash Equivalents or Investment Grade Securities;

 

(3)          (A) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

 

(a)                                  such Person becomes a Subsidiary Guarantor; or

 

(b)                                 such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Subsidiary Guarantor;

 

and, in each case, any Investment held by such Person, provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; and

 

(B) any Investment by a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor in a Person, if as a result of such Investment:

 

(a)                                  such Person becomes a Restricted Subsidiary of the Company; or

 

(b)                                 such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary;

 

and, in each case, any Investment held by such Person, provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; and

 

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(4)          any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 6.7;

 

(5)          Investments to the extent acquired in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company, Holdings or any other direct or indirect parent of the Company;

 

(6)          Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

 

(7)          Investments received in satisfaction of judgments or in settlements of debt or compromises of obligations incurred in the ordinary course of business;

 

(8)          loans or advances to employees of the Company or any of its Restricted Subsidiaries that are approved by a majority of the disinterested members of the Board of Directors of the Company or Parent, in an aggregate principal amount of $2.5 million at any one time outstanding;

 

(9)          Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(10)    other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) since the Closing Date, not to exceed the greater of (x) $35.0 million and (y) 5.0% of the Company’s Consolidated Total Assets at the time of such Investment;

 

(11)    any Investment existing on the Closing Date;

 

(12)    any Investment acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Company of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(13)    guarantees of Indebtedness of the Company or any Restricted Subsidiary which Indebtedness is permitted under Section 6.1; provided that this clause (13) shall not apply to Guarantees (other than Foreign ABL Guarantees) by the Company or the Subsidiary Guarantors of Indebtedness of Foreign Subsidiaries;

 

(14)    Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment;

 

(15)    Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business; and

 

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(16)    in connection with the Refinancing Transaction and the related restructuring of the Company’s Foreign Subsidiaries, the following Investments: (i) a capital contribution by the Company to New Holdco BV in an amount necessary to repay the Euro-denominated debt of EN BV, a Subsidiary of the Company, together with accrued and unpaid interest, outstanding as of the Closing Date; (ii) a capital contribution by the Company to New US LLC 1 in an amount necssary to repay the GBP-denominated debt of Euramax Holdings Limited, a Subsidiary of the Company, together with accrued and unpaid interest, outstanding as of the Closing Date; (iii) the contribution by the Company of its interest in New US LLC 1 to New Holdco BV; (iv) the contribution by the Company of its interest in Euramax International Holdings Limited to New US LLC 1; and (v) a loan by the Company of up to $230.0 million to New Holdco BV so long as an amount equal to the amount of such loan is distributed or dividended to the Company on or within 30 days following the Closing Date.

 

“Permitted Liens” means:

 

(1)                                                          Liens securing Indebtedness under the Credit Facility (including ABL Debt and other ABL Obligations), incurred under clauses (1) and (11) of the definition of “Permitted Debt” under Section 6.1(b);

 

(2)                                                          Liens securing the Notes;

 

(3)                                                          Liens in favor of the Company or any Restricted Subsidiary;

 

(4)                                                          Liens on property or Capital Stock of a Person existing at the time such Person is acquired by, merged with or into or consolidated, combined or amalgamated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to, and were not incurred in connection with or in contemplation of, such merger, acquisition, consolidation, combination or amalgamation and do not extend to any assets other than those of the Person acquired by or merged into or consolidated, combined or amalgamated with the Company or the Restricted Subsidiary;

 

(5)                                                          Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to, and were not incurred in connection with or in contemplation of, such acquisition and do not extend to any property other than the property so acquired by the Company or the Restricted Subsidiary;

 

(6)                                                          Liens existing on the Closing Date, other than liens to secure the Notes or to secure Obligations under the ABL Credit Facility outstanding on the Closing Date;

 

(7)                                                          Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Agreement (other than ABL Debt); provided that (a) the new Lien shall be limited to all or part of the same property and assets that secured the Indebtedness refinanced with such Permitted Refinancing Indebtedness, and (b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

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(8)                                                          Liens to secure (a) Indebtedness (including Capital Lease Obligations) permitted by clause (5) of Section 6.1(b); provided that any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 180 days of such acquisition, construction or improvement; and (b) Indebtedness permitted by clause (20(a)) of Section 6.1(b); provided that any such Lien covers only the assets subject to the applicable Sale and Leaseback Transaction.

 

(9)                                                          Liens incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security and employee health and disability benefits;

 

(10)                                                    Liens to secure the performance of bids, tenders, completion guarantees, public or statutory obligations, surety or appeal bonds, bid leases, performance bonds, reimbursement obligations under letters of credit that do not constitute Indebtedness or other obligations of a like nature, and deposits as security for contested taxes or for the payment of rent, in each case incurred in the ordinary course of business;

 

(11)                                                    Liens for taxes, assessments or governmental charges or claims that are not yet overdue or payable or subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted; provided that any reserve or other appropriate provision required under GAAP has been made therefor;

 

(12)                                                    carriers’, warehousemen’s, landlords’, mechanics’, suppliers’, materialmen’s and repairmen’s and similar Liens, or Liens in favor of customs or revenue authorities or freight forwarders or handlers to secure payment of customs duties, in each case (whether imposed by law or agreement) incurred in the ordinary course of business;

 

(13)                                                    licenses, entitlements, servitudes, easements, rights-of-way, restrictions, reservations, covenants, conditions, utility agreements, rights of others to use sewers, electric lines and telegraph and telephone lines, minor imperfections of title, minor survey defects, minor encumbrances or other similar restrictions on the use of any real property, including zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business, that were not incurred in connection with Indebtedness and do not, in the aggregate, materially diminish the value of said properties or materially interfere with their use in the operation of the business of the Company or any of its Restricted Subsidiaries;

 

(14)                                                    leases, subleases, licenses, sublicenses or other occupancy agreements granted to others in the ordinary course of business which do not secure any Indebtedness and which do not materially interfere with the ordinary course of business of the Company or any of its Restricted Subsidiaries;

 

(15)                                                    with respect to any leasehold interest where the Company or any Restricted Subsidiary of the Company is a lessee, tenant, subtenant or other occupant, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or sublandlord of such leased real property encumbering such landlord’s or sublandlord’s interest in such leased real property;

 

(16)                                                    Liens arising from UCC financing statement filings regarding precautionary filings, consignment arrangements or operating leases entered into by the Company or any of its Restricted Subsidiaries granted in the ordinary course of business;

 

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(17)                                                    Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection, (ii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) within general parameters customary in the banking industry or (iii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business;

 

(18)                                                    Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.1(6) so long as such Liens are adequately bonded;

 

(19)                                                    deposits made in the ordinary course of business to secure liability to insurance carriers;

 

(20)                                                    Liens arising out of conditional sale, title retention, consignment or similar arrangements, or that are contractual rights of set-off, relating to the sale or purchase of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

 

(21)                                                    [INTENTIONALLY OMITTED];

 

(22)                                                    any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement permitted under the indenture;

 

(23)                                                    any extension, renewal or replacement, in whole or in part of any Lien described in clauses (4), (5), (6), (7), (12) through (15), (17), (18) and (22) through (29) of this definition of “Permitted Liens”; provided that any such extension, renewal or replacement is no more restrictive in any material respect than any Lien so extended, renewed or replaced and does not extend to any additional property or assets;

 

(24)                                                    Liens on cash or cash equivalents securing Hedging Obligations in existence on the Closing Date;

 

(25)                                                    Liens other than any of the foregoing incurred by the Company, or any Restricted Subsidiary of the Company with respect to Indebtedness or other obligations that do not, in the aggregate, exceed $10.0 million at any one time outstanding (which Indebtedness may constitute Consolidated Secured Indebtedness);

 

(26)                                                    Liens on Capital Stock issued by, or any property or assets of, any Foreign Subsidiary, New US LLC 1 and/or New US LLC 2 securing (a) Indebtedness incurred by a Foreign Subsidiary, New US LLC 1 and/or New US LLC 2 in compliance with Section 6.1 hereof or (b) Hedging Obligations;

 

(27)                                                    Liens deemed to exist in connection with Investments in repurchase agreements constituting Cash Equivalents, provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

 

(28)                                                    Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(29)                                                    Liens solely on any cash earnest money deposits made by the Company or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement not prohibited by the indenture; and

 

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The Company may classify (or later reclassify) any Lien in any one or more of the above categories to the extent applicable (including in part in one category and in part another category).

 

“Permitted Receivables Financing” means any receivables financing facility or arrangement pursuant to which a Securitization Subsidiary purchases or otherwise acquires accounts receivable of the Company or any of its Restricted Subsidiaries and enters into a third party financing thereof on terms that the Board of Directors of the Company or Parent has concluded are customary and market terms fair to the Company and its Restricted Subsidiaries.

 

“Permitted Refinancing Indebtedness” means:

 

(A)                                                      any Indebtedness of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock) issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock and intercompany Indebtedness); provided that:

 

(1)                                  the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable fees and expenses incurred in connection therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

 

(3)                                  if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the Loans or the Loan Guarantees, such Permitted Refinancing Indebtedness is contractually subordinated in right of payment to, the Loans on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

 

(4)                                  if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the Loans or any Loan Guarantees, such Permitted Refinancing Indebtedness is pari passu in right of payment with, or subordinated in right of payment to, the Loans or such Loan Guarantees; and

 

(5)                                  such Indebtedness is incurred either (a) by the Company or any Subsidiary Guarantor or (b) by the Restricted Subsidiary who is the obligor on the

 

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Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

 

(B)                                                        any Disqualified Stock of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace or refund other Disqualified Stock of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock held by the Company or any of its Restricted Subsidiaries); provided that:

 

(1)                                  the liquidation or face value of such Permitted Refinancing Indebtedness does not exceed the liquidation or face value of the Disqualified Stock so extended, refinanced, renewed, replaced or refunded (plus all accrued dividends thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable fees and expenses incurred in connection therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a final redemption date later than the final redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Disqualified Stock being extended, refinanced, renewed, replaced or refunded;

 

(3)                                  such Permitted Refinancing Indebtedness has a final redemption date later than the final maturity date of, and is contractually subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Disqualified Stock being extended, refinanced, renewed, replaced or refunded;

 

(4)                                  such Permitted Refinancing Indebtedness is not redeemable at the option of the holder thereof or mandatorily redeemable prior to the final maturity of the Disqualified Stock being extended, refinanced, renewed, replaced or refunded; and

 

(5)                                  such Disqualified Stock is issued either (a) by the Company or any Subsidiary Guarantor or (b) by the Restricted Subsidiary that is the Company of the Disqualified Stock being extended, refinanced, renewed, replaced or refunded.

 

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

 

“preferred stock” means, with respect to any Person, any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions upon liquidation.

 

“PIK Portion” means with respect to any Interest Period, an amount of interest on the Loans accruing at the rate of 6.375% per annum.

 

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“Premium” means a fraction, the numerator of which is 100 and the denominator of which is 98.

 

“Pro Forma Cost Savings”  means, with respect to any Relevant Transaction for any period, a reduction in net costs, achievement of integration and other synergies (including, without limitation, improvements to gross margins) and related adjustments in connection with such Relevant Transaction that (1) are directly attributable to the Relevant Transaction and calculated on a basis that is consistent with Regulation S-X under the Securities Act as in effect and applied as of the Closing Date, (2) were actually implemented within 12 months after the date of the Relevant Transaction and prior to the Calculation Date that are supportable and quantifiable by underlying accounting records or (3) in connection with acquisitions only, the Company reasonably determines are expected to be realized within 12 months of the Calculation Date and, in the case of each of (1), (2) and (3), are described, as provided below, in an Officers’ Certificate, measured as if all such reductions in costs and integration and other synergies had been effected as of the beginning of such period.  Pro Forma Cost Savings described above shall be established by a certificate delivered to the Administrative Agent from the Company’s Chief Financial Officer or another Officer authorized by the Board of Directors of the Company or Holdings to deliver an Officers’ Certificate under this Agreement that outlines the specific actions taken or to be taken and the benefit achieved or to be achieved from each such action and, in the case of clause (3) above, that states such benefits have been determined to be probable.  Notwithstanding the foregoing, the aggregate Pro Forma Cost Savings taken into account in any determination of the Fixed Charge Coverage Ratio or the Consolidated Secured Debt Ratio, exclusive of Pro Forma Cost Savings consistent with Regulation S-X under the Securities Act, shall not exceed 10.0% of Consolidated Cash Flow as measured without giving effect to any Pro Forma Cost Savings.

 

“Principal Office” means, for the Administrative Agent, the “Principal Office” as set forth on Appendix A delivered on or prior to the Closing Date, or such other office or office of a third party or sub-agent, as appropriate, as the Administrative Agent may from time to time designate in writing to Company and each Lender.

 

“Promissory Note” means a promissory note in form and substance reasonably satisfactory to the Initial Lenders and the Company, as it may be amended, restated, supplemented or otherwise modified, renewed or replaced from time to time.

 

“Pro Rata Share” means with respect to all payments, computations and other matters relating to the Loans of any Lender, the percentage obtained by dividing (a) the principal amount of Loans (or, prior to the Closing Date, Commitments) held by such Lender by (b) the aggregate principal amount of all Loans (or, prior to the Closing Date, all Commitments).

 

“Qualified Equity Offering” means (i) any sale of Capital Stock (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act or (ii) any sale of Capital Stock (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common equity securities registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act, in each case other than public offerings with respect to the Company’s Capital Stock, or options, warrants or rights, registered on Form S-4 or S-8.

 

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“Rating Agency” means each of (1) S&P, (2) Moody’s and (3) if either S&P or Moody’s no longer provide ratings, any other ratings agency which is nationally recognized for rating debt securities.

 

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any material real property.

 

“Relevant Transaction” as defined in clause (i) of the proviso to the definition of “Fixed Charge Coverage Ratio”.

 

“Refinancing Transaction” or “refinancing transaction” means the issuance of the Notes, the execution and delivery of and entry into the ABL Facility, the incurrence of the Loans, the execution and delivery of the related documentation, the exchange by the Initial Lenders of a portion of their Existing Lender Loans pursuant to which the Company is the sole borrower for a portion of the Loans and the use of proceeds in respect of the foregoing as described in the offering memorandum for the Notes under “Use of Proceeds”, including for the payment in full of the Existing First Lien Credit Agreement and the satisfaction of all obligations of the borrowers thereunder.

 

“Register” as defined in Section 2.7(b).

 

“Related Agreements” means, the First Lien Facility, ABL Credit Facility and each other document and instrument executed with respect to any of the foregoing agreements.

 

“Related Fund” means, with respect to any Lender (or, for the purposes of the definition of Independent Outside Director, any Person that is a Person listed in clause (i) of paragraph (b) of the definition of Independent Outside Director) that is an investment fund, account or vehicle, any other investment fund, account or vehicle that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender (or, for such purpose, any such Person that is a Person listed in clause (i) of paragraph (b) of the definition of Independent Outside Director) or by an Affiliate of such investment advisor.

 

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material).

 

“Remedial Action” means all actions taken to (i) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment; (ii) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (iii) any response actions authorized by 42 U.S.C. 9601 et. seq.

 

“Replacement Assets” means (1) tangible assets that will be used or useful in a Permitted Business or (2) substantially all the assets of a Permitted Business or a majority of the Voting Stock of any Person engaged in a Permitted Business that will become on the date of acquisition thereof a Restricted Subsidiary.

 

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“Replacement Lender” as defined in Section 2.24.

 

“Requisite Lenders” means one or more Lenders holding more than fifty percent (50%) of the aggregate unpaid principal amount of the Loans.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor to the rating agency business thereto.

 

“Sale and Leaseback Transaction” means, with respect to any Person, any transaction involving any of the assets or properties of such Person whether now owned or hereafter acquired, whereby such Person sells or transfers such assets or properties and then or thereafter leases such assets or properties or any part thereof.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Securitization Subsidiary” means a Subsidiary of the Company

 

(1)   that is designated a “Securitization Subsidiary” by the Board of Directors of the Company or Parent,

 

(2)   that does not engage in, and whose charter prohibits it from engaging in, any activities other than Permitted Receivables Financings and any activity necessary, incidental or related thereto,

 

(3)   no portion of the Indebtedness or any other obligation, contingent or otherwise, of which

 

(a)           is Guaranteed by the Company, any Guarantor or any Restricted Subsidiary of the Company,

 

(b)           is recourse to or obligates the Company, any Guarantor or any Restricted Subsidiary of the Company in any way, or

 

(c)           subjects any property or asset of the Company, any Guarantor or any Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, and

 

(4)   with respect to which neither the Company, any Guarantor nor any Restricted Subsidiary of the Company (other than an Unrestricted Subsidiary) has any obligation to maintain or preserve such its financial condition or cause it to achieve certain levels of operating results,

 

other than, in respect of clauses (3) and (4), pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Permitted Receivables Financing.

 

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“Settlement Confirmation” as defined in Section 11.6(b).

 

“Settlement Service” as defined in Section 11.6(d).

 

“Significant Subsidiary” means any Restricted Subsidiary that would constitute a “significant subsidiary” within the meaning of Article 1 of Regulation S-X under the Securities Act.

 

“Solvent” means, with respect to the Company and its Subsidiaries, taken as a whole, that as of the Closing Date both (a) Company’s and its Subsidiaries’ cash is not unreasonably small in relation to its business as contemplated on the Closing Date; and (b) Company and its Subsidiaries have not incurred and do not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due.

 

“Special Mandatory Repayment” as defined in Section 2.14(c).

 

“Spot Exchange Rate” means, at any date of determination thereof, the spot rate of exchange in London that appears on the display page applicable to the relevant currency on the Telerate System Incorporated Service (or such other page as may replace such page on such service for the purpose of displaying the spot rate of exchange in London for the conversion of Dollars into such currency or such currency into Dollars); provided that if there shall at any time no longer exist such a page on such service, the spot rate of exchange shall be determined by reference to another similar rate publishing service selected by the Administrative Agents and reasonably acceptable to the Company.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Sterling” and “” means the lawful currency of the United Kingdom.

 

“Stockholders Agreement” means the Stockholders Agreement dated as of June 29, 2009, among Holdings and the stockholders named therein, as such agreement may be amended, restated, supplemented, modified and/or replaced from time to time.

 

“Subsidiary” means, with respect to any specified Person:

 

(1)   any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person (or a combination thereof); and

 

(2)   any partnership (a) the sole general partner or the managing general partner of which is such Person or a subsidiary of such Person or (b) the only general partners of which are such Person or one or more subsidiaries of such Person (or any combination thereof).

 

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“Subsidiary Guarantor” means a Guarantor that is a Restricted Subsidiary of the Company.

 

“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed (including any penalty, interest or additional amounts with respect thereto).

 

“Terminated Lender” as defined in Section 2.24.

 

“Treaty on European Union” means the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed in Maastricht on February 7, 1992 and came into force on November 1, 1993).

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

 

“Unrestricted Subsidiary” means (i) any Securitization Subsidiary and (ii) any Subsidiary of the Company that is designated as an Unrestricted Subsidiary pursuant to a resolution of the Company’s or Parent’s Board of Directors in compliance with Section 6.9  of this Agreement  and any Subsidiary of such Subsidiary.

 

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock at any date, the number of years obtained by dividing:

 

(1)   the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal or liquidation or face value, including payment at final maturity or redemption, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2)   the then outstanding principal or liquidation or face value amount of such Indebtedness or Disqualified Stock.

 

“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or Investments by foreign nationals mandated by applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.

 

1.2.   Accounting Terms.

 

Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information required to be delivered by Company to Lenders pursuant to

 

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Section 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation.  Subject to the foregoing, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements.

 

1.3.   Interpretation, etc.

 

Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.  References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided.  The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.  The term “documents” means all writings, however evidenced and whether in physical or electronic form, including all documents, instruments, agreements, notices, demands, certificates, forms, financial statements, opinions and reports. Definition of all agreements, instruments and documents shall, unless otherwise specified in such definition, refer to such agreement, instrument or document as amended, modified, supplemented, refinanced, restated or renewed from time to time in accordance with its terms and the terms of this Agreement.

 

SECTION 2.                                                                            LOANS

 

2.1.   The Loans.  Subject to the terms and conditions set forth herein, on the Closing Date:

 

(a)           Each Initial Lender shall, in lieu of the cash repayment due to it on account of its Designated Existing Lender Loans pursuant to which the Company is the sole borrower and in satisfaction of such Designated Existing Lender Loans, be deemed to have made Loans to the Company equal in amount to the product of (x) the Premium and (y) the principal amount of its Designated Existing Lender Loans on the Closing Date.

 

(b)           Each Lender shall make an advance to the Company in Dollars equal to (i) its Commitment less (ii) the amount of its Designated Existing Lender Loans deemed repaid pursuant to Section 2.1(a), and shall be deemed to have advanced to the Company on account thereof an amount equal to the product of (x) the Premium and (y) the actual Dollar amount advanced by such Lender.

 

(c)           The Company shall have the right to reduce (and, in no event, increase) the Commitments to no less than $98.0 million (such Commitments being reduced ratably based on each Lender’s Pro Rata Share). Any reductions to Commitments to be made by written notice (the “Borrowing Notice”) delivered to the Administrative Agent and the Initial Lenders no fewer than three (3) Business Days prior to the Closing Date. Immediately after the making of the Loans on the Closing Date, the Loans of each Lender shall be as set forth on Schedule 2.1(c),

 

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which Schedule shall be prepared by the Administrative Agent and appended to this Agreement upon receipt of the Borrowing Notice and prior to the Closing Date.

 

(d)           The Commitments of the Lenders hereunder are several and not joint. No failure by any Lender to perform its obligations under this Agreement shall relieve any other Lender or the Company of any of its obligations hereunder, and no Lender shall be responsible for the obligations of, or any action taken or omitted by, any other Lender hereunder.

 

2.2.         [INTENTIONALLY OMITTED.]

 

2.3.         [INTENTIONALLY OMITTED.]

 

2.4.         [INTENTIONALLY OMITTED.]

 

2.5.         [INTENTIONALLY OMITTED.]

 

2.6.         [INTENTIONALLY OMITTED.]

 

2.7.         Evidence of Debt; Register; Lenders’ Books and Records; Promissory Notes

 

(a)      Lenders’ Evidence of Debt.  Each Lender shall maintain on its internal records an account or accounts evidencing the Credit Document Obligations of the Company to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof.  Any such recordation shall be conclusive and binding on the Company, absent manifest error; provided, that the failure to make any such recordation, or any error in such recordation, shall not affect any of the Company’s Obligations in respect of any applicable Loans; and provided  further, in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

 

(b)      Register.  Administrative Agent shall maintain at its Principal Office a register for the recordation of the names and addresses of Lenders from time to time (the “Register”).  Information contained in the Register, as set forth therein at the close of business on the preceding Business Day, shall be available for inspection by any Lender and Company at any reasonable time and from time to time upon reasonable prior notice and shall be made available to Lenders and Company by electronic mail.  Administrative Agent shall record, or shall cause to be recorded, in the Register the Loans in accordance with the provisions of Section 11.6, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on Company and each Lender making Loans to the Company, absent manifest error; provided, failure to make any such recordation, or any error in such recordation, shall not affect Company’s obligations to repay any Obligation.  Company hereby designates Administrative Agent to serve as Company’s agent solely for tax purposes and solely for purposes of maintaining the Register as provided in this Section 2.7(b), and Company hereby agrees that, to the extent Administrative Agent  serves in such capacity, Administrative Agent  and its agents, sub-agents and affiliates and officers, directors and employees of any of them shall constitute “Indemnitees.”

 

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(c)      Promissory Notes.  If so requested by any Lender by written notice to the Company (with a copy to Administrative Agents) at least two Business Days prior to the Closing Date, or at any time thereafter, the Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 11.6) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after the Company’s receipt of such notice) a Promissory Note or Promissory Notes to evidence such Lender’s Loans.

 

2.8.   Interest on Loans.  (a)  The Loans shall accrue interest at the Interest Rate and accrued interest on each Loan shall, subject to Section 2.8(b), be payable in arrears in cash on each Interest Payment Date; provided that interest accrued pursuant to Section 2.10 shall be payable on demand and (y) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.

 

(b)           The Company may, at its option, elect to pay a portion of the interest on the Loans equal to the PIK Portion by increasing the outstanding principal amount of the Loans by the PIK Portion (a “PIK Election”); provided that (i) the Company may only make a PIK Election for any Interest Period by providing notice to the Administrative Agent at least five (5) Business Days prior to the start of such Interest Period and (ii) the Company may not make more than six (6) PIK Elections during the term of this Agreement.

 

(c)          All interest hereunder shall be computed on the basis of a year of 360 days.

 

2.9.   [INTENTIONALLY OMITTED.]

 

2.10.       Default Interest.  Upon the occurrence and during the continuance of an Event of Default, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand in cash at a rate that is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans.  Payment or acceptance of the increased rates of interest provided for in this Section 2.10 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender.

 

2.11.   Fees.  On the Closing Date and on each anniversary thereof, the Company shall pay to the Administrative Agent for its own account, a nonrefundable annual administration fee in the amount specified in the Administrative Agent’s Fee Letter.

 

2.12.   Repayment of Loans at Maturity.(a)     Subject to the other paragraphs of this Section, to the extent not previously paid, outstanding Loans shall be due and payable on the Maturity Date (which, for the avoidance of doubt, shall include any increase in the principal amount of the outstanding Loans as a result of the Company’s exercise of the PIK Election, less any repayments prior to the Maturity Date).

 

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2.13.   Voluntary Prepayments.        (a)           If the Maturity Date as of the Closing Date:

 

(i) is five and one-half (5 1/2) years, except as set forth in clause (b) of this Section 2.13, the Company shall not have the option to prepay the Loans prior to the second anniversary of the Closing Date.  On or after such date, and subject to five (5) Business Days’ prior notice to the Administrative Agent, the Company shall have the option to prepay the Loans, in whole or in part, at the prices (expressed as percentages of the Loans) set forth below, plus accrued and unpaid interest, if any, to the applicable prepayment date:

 

	
Prepayment Date
    	
 
    	
Percentage
    
	
 
    	
 
    	
 
    
	
On or after the second anniversary of the   Closing Date but prior to the third anniversary of the Closing Date
    	
 
    	
103%
    
	
 
    	
 
    	
 
    
	
On or after the third anniversary of the   Closing Date but prior to the fourth anniversary of the Closing Date
    	
 
    	
102%
    
	
 
    	
 
    	
 
    
	
On or after the fourth anniversary of the   Closing Date
    	
 
    	
100%
    


 

(ii) is more than five and one-half (5 1/2) years, except as set forth in clause (b) of this Section 2.13, the Company shall not have the option to prepay the Loans prior to the third anniversary of the Closing Date.  On or after such date, and subject to five (5) Business Days’ prior notice to the Administrative Agent, the Company shall have the option to prepay the Loans, in whole or in part, at the prices (expressed as percentages of the Loans) set forth below, plus accrued and unpaid interest, if any, to the applicable prepayment date:

 

	
Prepayment Date
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On or after the third anniversary of the   Closing Date but prior to the fourth anniversary of the Closing Date
    	
 
    	
103%
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On or after the fourth anniversary of the   Closing Date but prior to the fifth anniversary of the Closing Date
    	
 
    	
102%
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On or after the fifth anniversary of the   Closing Date
    	
 
    	
100%
    	
 
    


 

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(b)   Notwithstanding the provisions of clause (a) of this Section 2.13, at any time prior to the second anniversary of the Closing Date, the Company may on one or more occasions prepay up to 35% of the aggregate principal amount of the Loans outstanding on the Closing Date at a prepayment price (expressed as a percentage of the Loans) of 100% plus the cash-pay Interest Rate of the principal amount thereof, plus accrued and unpaid interest, if any, to the prepayment date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that each prepayment occurs within 10 days of the closing of each such Qualified Equity Offering.

 

2.14.       Mandatory Prepayment Offers.

 

(a)      Change of Control Prepayment Offer.  Upon the occurrence of a Change of Control, each Lender will have the right to require the Company to prepay all or any part of such Lender’s Loans at a prepayment price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of prepayment, except to the extent that the Company has previously elected to prepay Loans pursuant to Section 2.13(a).

 

Within thirty (30) Business Days following any Change of Control, except to the extent that the Company has exercised its right to prepay the Loans as described in Section 2.13(a), the Company shall mail a notice (a “Change of Control Offer”) to each Lender with a copy to the Administrative Agent stating:

 

(1)           that a Change of Control has occurred and that such Lender has the right to require the Company to prepay such Lender’s Loans at a prepayment price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of prepayment (the “Change of Control Prepayment”);

 

(2)           the circumstances and relevant facts and financial information regarding such Change of Control;

 

(3)           the prepayment date (the “Change of Control Payment Date”) (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

 

(4)           the instructions determined by the Company, consistent with this Section 2.14, that a Lender must follow in order to have its Loans repaid.

 

On the Change of Control Payment Date, if the Change of Control shall have occurred, the Company will pay an amount equal to the Change of Control Payment in respect of all Loans so tendered.

 

(b)      Asset Sales.  The Company shall make any prepayments or offer to make any prepayments as may be required pursuant to Section 6.7.

 

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(c)   AHYDO Prepayment.  Company shall pay on the first Interest Payment Date occurring after the fifth anniversary of the Closing Date and on each subsequent Interest Payment Date (or, if earlier, before the close of any “accrual period” (as defined in Section 1272(a)(5) of the Internal Revenue Code) ending after the fifth anniversary of the Closing Date) a portion of the accrued but unpaid interest on the Loans (including any such accrued interest added to principal pursuant to Section 2.8) in an amount sufficient to ensure that the Loans will not be an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Internal Revenue Code (each payment a “Special Mandatory Repayment”) and that the Loans shall be treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Internal Revenue Code.  This Section 2.14(c) shall be interpreted in a manner consistent with the intent that the Loans will not be an “applicable high yield discount obligation” and that the Loans will be treated as not having “significant original issue discount”, as such terms are defined above. For purposes of determining the amount of any payments required to be made by this Section 2.14(c), the issue price of entire amount of the Loans (as defined in Sections 1273(b) of the Internal Revenue Code) shall be determined based on the amount of cash actually advanced by the Lenders for a portion of the Loans pursuant to Section 2.1(b), as set forth on Schedule 2.1(c).

 

2.15.   [INTENTIONALLY OMITTED.]

 

2.16.   General Provisions Regarding Payments.

 

(a)      All payments by the Company of principal, interest, fees and other Credit Document Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent not later than 2:00 p.m. (Local Time) on the date due at the Principal Office designated by the Administrative Agent for the account of Lenders; for purposes of computing interest and fees, funds received by the Administrative Agent after that time on such due date shall be deemed to have been paid by the Company on the next succeeding Business Day.

 

(b)      All payments in respect of the principal amount of any Loan shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.

 

(c)      The Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including, without limitation, all fees payable with respect thereto, to the extent received by the Administrative Agent.

 

(d)      [INTENTIONALLY OMITTED.]

 

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(e)      Whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and, such extension of time shall be included in the computation of the payment of interest hereunder.

 

(f)       The Administrative Agent shall deem any payment by or on behalf of the Company hereunder that is not made in same day funds prior to 2:00 p.m. (Local Time) to be a non-conforming payment.  Any such payment shall not be deemed to have been received by the Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day.  The Administrative Agent shall give prompt written notice to the Company and each applicable Lender if any payment is non-conforming.  Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a).  Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.10 from the date such amount was due and payable until the date such amount is paid in full.

 

2.17.   Ratable Sharing.  Lenders hereby agree among themselves that, except as otherwise provided in Sections 2.14(a) and (b), if any of them shall, whether by voluntary payment, through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code or any other applicable legislation, receive payment or reduction of a proportion of the aggregate amount of principal, interest, fees and other amounts then due and owing to such Lender in its capacity as a Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify the Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of the Company or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest.

 

2.18.   Making or Maintaining Loans.

 

(a)      [INTENTIONALLY OMITTED.]

 

(b)      Illegality or Impracticability of Loans.  In the event that on any date any Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto absent manifest error but shall be made only after

 

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consultation with the Company and Administrative Agents) that the making, maintaining or continuation of its Loans has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (in writing) to the Company and Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender).  Thereafter the Affected Lender’s obligation to maintain its outstanding Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and the Affected Loans shall be repaid by the Company, on the date of such termination, together with all interest accrued thereon.

 

(c)      [INTENTIONALLY OMITTED.]

 

(d)      Booking of Loans.  Any Lender may make, carry or transfer Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.

 

2.19.       Increased Costs; Capital Adequacy.

 

(a)      Compensation For Increased Costs and Taxes.  Subject to the provisions of Section 2.20 (which shall be controlling with respect to the matters covered thereby), in the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the Closing Date, or compliance by such Lender with any guideline, request or directive issued or made after the Closing Date by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (i) subjects such Lender (or its applicable lending office) to any additional Tax (which Tax shall (A) exclude any Tax imposed by a Governmental Authority as a result of a connection or former connection between a Lender and the jurisdiction imposing such Tax, including, without limitation, any connection arising from being a citizen, domiciliary or resident of such jurisdiction, being organized in such jurisdiction, or having a permanent establishment or fixed place of business therein, but excluding any connection arising solely from the rights and obligations as a Lender, or the activities of such Lender, pursuant to or in respect of this Agreement or the other Credit Documents, and (B) include any Tax (other than a net income tax) imposed both as a result of a connection between a Lender and the jurisdiction imposing such Tax and as a result of a connection between the Company and the jurisdiction imposing such Tax) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable

 

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lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender; or (iii) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, the Company shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder.  Such Lender shall deliver to the Company (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.19(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

(b)      Capital Adequacy Adjustment.  In the event that any Lender shall have determined that the adoption, effectiveness, phase-in or applicability after the Closing Date of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans, or other obligations hereunder with respect to the Loans to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by the Company from such Lender of the statement referred to in the next sentence, the Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver to the Company (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.19(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

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2.20.       Taxes; Withholding, etc.

 

(a)   Payments to Be Free and Clear.  Subject to Section 2.20(b), sums payable by or on behalf of any Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax imposed, levied, collected, withheld or assessed by any Governmental Authority.

 

(b)   Withholding of Taxes.  If any Credit Party or any other Person is required by law to make any deduction or withholding from any sum paid or payable by any Credit Party to the Administrative Agent or any Lender under any of the Credit Documents on account of any Tax (which Tax shall (A) exclude any Tax imposed by a Governmental Authority as a result of a connection or former connection between such Lender or Applicable Administrative Agent (as the case may be) and the jurisdiction imposing such Tax, including, without limitation, any connection arising from being a citizen, domiciliary or resident of such jurisdiction, being organized in such jurisdiction, or having a permanent establishment or fixed place of business therein, but excluding any connection arising solely from the rights and obligations as a Lender, or the activities of such Lender, pursuant to or in respect of this Agreement or the other Credit Documents, (B) exclude any Tax on the overall net income of any Lender, and (C) include any Tax (other than a net income tax) imposed both as a result of a connection between a Lender or the Administrative Agent (as the case may be) and the jurisdiction imposing such Tax and as a result of a connection between the Company and the jurisdiction imposing such Tax) (i) Company shall notify the Administrative Agent of any such requirement or any change in any such requirement as soon as Company becomes aware of it; (ii) Company shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on the Administrative Agent or such Lender, as the case may be) on behalf of and in the name of the Administrative Agent or such Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, the Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty days after the due date of payment of any Tax which it is required by clause (ii) above to pay, Company shall deliver to the Administrative Agent evidence satisfactory to the Administrative Agent of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided, no such additional amount shall be required to be paid to any Lender under clause (iii) above that is attributable to such Lender’s failure to comply with (x) the requirements of paragraph (g), (h) or (i) of this Section or that are United States withholding taxes imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Company with respect to Taxes pursuant to this Section 2.20, or (y) FATCA.  For the avoidance of doubt, no additional amount shall be required to be paid to any Lender under clause (iii) above in respect of United States withholding taxes

 

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that are attributable to such Lender’s status as a “10-percent shareholder” (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Company.

 

(c)   [INTENTIONALLY OMITTED.]

 

(d)   [INTENTIONALLY OMITTED.]

 

(e)   [INTENTIONALLY OMITTED.]

 

(f)   In addition, the Company shall pay any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Credit Document to the relevant Governmental Authority in accordance with applicable law.

 

(g)   Evidence of Exemption From U.S. Withholding Tax.  The Administrative Agent and each Lender making a Loan to Company that is not a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-U.S. Lender”) shall deliver to the Administrative Agent for transmission to the Company on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Company or the Administrative Agent (each in the reasonable exercise of its discretion), (i) two original copies of Internal Revenue Service Form W-8BEN, W-8IMY, W8-EXP or W-8ECI (or any successor forms), properly completed and duly executed by such Lender, and such other documentation reasonably requested by Company to establish that such Lender is not subject to (or is subject to a reduced rate of) deduction or withholding of United States federal income tax with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) if such Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot comply with clause (i) above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender, and such other documentation reasonably requested in writing by Company to establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of interest payable under any of the Credit Documents.  The Administrative Agent and each Lender making a Loan to Company that is a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) and is not a person whose name indicates that it is an “exempt recipient” (as such term is defined in Section 1.6049-4(c)(ii) of the United States Treasury Regulations) shall deliver to the Company and the Administrative Agent on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of

 

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Company or Administrative Agent (each in the reasonable exercise of its discretion) two original copies of Form W-9 (or successor forms).  Each Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 2.20(g) hereby agrees, from time to time after the initial delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Lender shall promptly deliver to Administrative Agent for transmission to Company two new original copies of Internal Revenue Service Form W-9, W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN (or any successor form), as the case may be, properly completed and duly executed by such Lender, and such other documentation reasonably requested by Company to confirm or establish that such Lender is not subject to (or, in the case of a Lender that has properly claimed a reduced rate of withholding on the date it became a party to this Agreement, is subject to the same reduced rate of) deduction or withholding of United States federal income tax with respect to payments to such Lender under the Credit Documents.  Credit Parties shall not be required to pay any additional amount with respect to U.S. withholding taxes to any Non-U.S. Lender under Section 2.20(b)(iii) if such Lender shall have failed to deliver the forms, certificates or other evidence referred to in the fourth sentence of this Section 2.20(g); provided, if such Lender shall have satisfied the requirements of the first and second sentences of this Section 2.20(g) on or prior to the Closing Date or on the date of the Assignment Agreement pursuant to which it became a Lender, as applicable, nothing in this fifth sentence of Section 2.20(g) shall relieve Company of its obligation to pay any additional amounts pursuant this Section 2.20 in the event that, as a result of any change after such Lender becomes a party to this Agreement in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender is not subject to withholding as described herein.

 

(h)   A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Company is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall cooperate with the Company in completing any procedural formalities necessary for the Company to obtain authorization to make payments without withholding or at a reduced rate, provided that such Lender is legally entitled to complete, execute and deliver any necessary documentation and in such Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender, but the Lender shall be obliged, and undertakes, to complete any steps forming part of such procedural formalities that are within its own control as promptly as is reasonably possible following it becoming a party to this Agreement, subject to the Lender receiving from the Company all the necessary information and documentation reasonably requested by the Lender.

 

(i)   In addition, each Lender and the Administrative Agent shall deliver to the Administrative Agent and the Company such other tax forms or other documents as

 

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shall be prescribed by applicable law to demonstrate, where applicable, that payments under this Agreement and the other Credit Documents to such Lender or the Administrative Agent are exempt from application of the United States federal withholding taxes imposed pursuant to FATCA.

 

2.21.   Obligation to Mitigate.  Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) maintain its Loans through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially reduced and if, as determined by such Lender in its sole discretion, the making or maintaining of such Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Loans or the interests of such Lender; provided, such Lender will not be obligated to utilize such other office pursuant to this Section 2.21 unless the Company agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described in clause (a) above.  A certificate as to the amount of any such expenses payable by the Company pursuant to this Section 2.21 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to the Company (with a copy to the Administrative Agent) shall be conclusive absent manifest error.

 

2.22.   Refunds.  If any Lender receives a refund in respect of any amounts paid by the Company pursuant to Section 2.19 (insofar as it relates to Taxes) or Section 2.20, which refund in the reasonable discretion of such Lender is allocable to such payment, it shall promptly notify the Company of such refund and shall promptly pay the amount of such refund to the Company, together with all interest received by such Lender on such amount, but after deducting any cost incurred by such Lender in connection with such refund; provided that the Company, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Company (including any applicable interest, fees and penalties) in the event that the Administrative Agent or such Lender is required to repay such refund to the relevant Governmental Authority.

 

2.23.   [INTENTIONALLY OMITTED.]

 

2.24.   Removal or Replacement of a Lender.  Anything contained herein to the contrary notwithstanding, in the event that: (A) (i) any Lender shall give notice to Company that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.19 or 2.20, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five Business Days after Company’s request for such withdrawal; then, with respect to such Lender, (the “Terminated Lender”) and (B) at any time after the Initial Lenders have transferred all or a portion of the Loans held by them on the Closing Date, any Lender becomes a “Non-Consenting Lender” (as defined below in

 

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this Section 2.24), Company may by giving written notice to Administrative Agent and any Terminated Lender of their election to do so, elect to cause such Terminated Lender or such Non-Consenting lender, as the case may be (and such Terminated Lender or such Non-Consenting Lender, as the case may be, hereby irrevocably agrees) to assign its outstanding Loans, if any, in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 11.6 (but without the requirement to execute a Settlement Confirmation or an Assignment Agreement) and Company or the Replacement Lender shall pay any fees payable thereunder in connection with such assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender or the Non-Consenting Lender, as the case may be, an amount equal to the sum of an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Terminated Lender or the Non-Consenting Lender, as the case may be, and expenses and other indemnification payments due and payable under this Agreement; and (2) in the case of the Terminated Lender on the date of such assignment, Company shall pay any amounts payable to such Terminated Lender pursuant to Section 2.19 or 2.20; or otherwise as if it were a prepayment.  Upon the prepayment of all amounts owing to any Terminated Lender or any Non-Consenting Lender, as the case may be, such Terminated Lender or such Non-Consenting Lender, as the case may be, shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender or such Non-Consenting Lender, as the case may be, to indemnification hereunder shall survive as to such Terminated Lender or such Non-Consenting Lender, as the case may be.

 

In the event that (i) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Credit Documents or to agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 11.5 and (iii) the Requisite Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender.”

 

SECTION 3.                                                                            CONDITIONS PRECEDENT

 

3.1.   Conditions to Closing Date.

 

The obligation of each Lender to make or advance Loans hereunder (whether deemed or not) is subject to the satisfaction of the following conditions precedent:

 

(a)      Execution of Credit Documents.  The Administrative Agent shall have received copies of each Credit Document, including, without limitation, the Promissory Notes, if any, and the Holdings Guaranty, originally executed and delivered by each applicable Credit Party or other Person for each Lender.

 

(b)      Organizational Documents; Incumbency.  The Administrative Agent shall have received (i) one copy of each Organizational Document executed and delivered by each Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, dated the Closing Date or a recent date prior thereto; (ii) signature and incumbency certificates of the officers of such

 

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Person executing the Credit Documents to which it is a party; (iii) resolutions of the board of directors or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents and the Related Agreements to which it is a party or by which it or its assets may be bound as of the Closing Date, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate from the applicable Governmental Authority of each Credit Party’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Closing Date; and (v) such other documents as Administrative Agents may reasonably request.

 

(c)      Organizational Structure.  Either the organizational structure of Holdings and its Subsidiaries shall be substantially as set forth on Schedule 3.1(c) on the Closing Date or Holdings and its Subsidiaries shall have taken steps to effect the organizational structure set forth on Schedule 3.1(c) within 90 days after the Closing Date.

 

(d)      Existing First Lien Credit Agreement.  The Obligations under the Existing First Lien Credit Agreement, including the Existing Lender Loans (other than Designated Existing Lender Loans) and interest owing on the Existing Lender Loans to the Closing Date, shall have been paid in full and the liens in respect thereof released and discharged.

 

(e)      First Lien Facility.  The Company shall have issued the notes contemplated by the First Lien Facility in an aggregate principal amount equal to $375 million plus, if applicable, the difference between $125.0 million and the actual amount of Loans made or deemed made by the Initial Lenders to the Company pursuant to Section 2.1.  The Stated Maturity of the First Lien Facility shall be a date no earlier than five (5) years from the Closing Date.

 

(f)       ABL Credit Facility.  The ABL Credit Facility shall have become effective on terms substantially consistent with the term sheet for the ABL Credit Facility previously delivered to the Initial Lenders and availability thereunder shall not be less than $70.0 million.

 

(g)      Absence of Default. There shall be no Default under this Agreement or any Related Agreement.

 

(h)      Related Agreements.  The Company shall have delivered to the Administrative Agent complete and correct copies of each Related Agreement and all exhibits and schedules thereto as of the Closing Date.

 

(i)       Governmental Authorizations and Consents.  Each Credit Party shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary in connection with the transactions contemplated by the Credit Documents and the Related Agreements and each of the foregoing shall be in full force and effect unless in each case the failure to obtain such Governmental Authorization or

 

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such consents could not have been reasonably expected to have a Material Adverse Effect.

 

(j)       Administrative Agent.  A Person reasonably acceptable to the Initial Lenders shall have accepted an appointment as “Administrative Agent” hereunder.

 

(k)      Financial Statements.  Lenders shall have received from Company the Historical Financial Statements.  The Historical Financial Statements for fiscal year 2010 shall not differ in a manner that is material and adverse to the Lenders from the preliminary financial statements delivered to the Initial Lenders on or prior to the date hereof.

 

(l)       Evidence of Insurance.  Administrative Agent shall have received a certificate form the Company’s insurance broker or other evidence reasonably satisfactory to it that all insurance required to be maintained pursuant to Section 5.5 is in full force and effect.

 

(m)     Opinions of Counsel to Credit Parties.  Lenders and their respective counsel shall have received originally executed copies of the favorable written opinions of (i) Fried, Frank, Harris, Shriver & Jacobson LLP, New York counsel for Credit Parties and (ii) local counsel in each jurisdiction in which a Significant Subsidiary is formed, incorporated or organized, as to such matters as the Administrative Agent may reasonably request, each dated as of the Closing Date and otherwise in form and substance reasonably satisfactory to the Administrative Agent.

 

(n)      Fees and Expenses.  All fees and expenses payable hereunder (including all reasonable fees and expenses of counsel) invoiced to the Company prior to the Closing Date shall have been paid.

 

(i)       Solvency Certificate.  The Administrative Agent shall have received a customary certificate, dated as of the Closing Date, certified by the chief financial officer of the Company, stating that the Company and its Subsidiaries, on a consolidated basis after giving effect to the Refinancing Transaction are Solvent.

 

(o)      Closing Date.  The Closing Date shall have occurred on or prior to March 31, 2011.

 

(p)      Accuracy of Representations and Warranties.  The representations and warranties of the Company and each other Credit Party contained in Article IV shall be true and correct in all material respects on and as of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (provided that the representations and warranties that are qualified by materiality shall be true and correct in all respects).

 

(q)      Certain transactions prior to Closing Date.  From the date hereof until the Closing Date, Holdings and its Subsidiaries shall not have (i) made any Restricted Payments, (ii) made any Investments, (iii) incurred any Indebtedness or (iv) permitted,

 

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created incurred, assumed or suffered to exist any Lien, except for those transactions (a) made in the ordinary course or (b) made in connection with the Refinancing Transactions.

 

SECTION 4.                                                                            REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Agreement, each Credit Party represents and warrants to each Lender, on the Closing Date, that the following statements are true and correct in all material respects or, with respect to any of the following statements that are subject to a Material Adverse Effect qualification, in all respects (except to the extent such representations specifically relate to an earlier date in which case such representations and warranties shall have been true and correct in all material respects or in all respects, as applicable, on and as of such earlier date):

 

4.1.         Organization; Requisite Power and Authority; Qualification.  Each of Company and its Subsidiaries (a) is duly organized, validly existing and (to the extent such concept is relevant) in good standing under the laws of its jurisdiction of organization or incorporation, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or (to the extent such concept is relevant) in good standing has not had, and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

4.2.   Capital Stock and Ownership.  All of the oustanding shares of Capital Stock of each of Company and its Subsidiaries has been duly authorized and validly issued and is fully paid and non-assessable.  Except as set forth on Schedule 4.2, as of the date hereof, there is no existing option, warrant, call, right, commitment or other agreement to which Company or any of its Subsidiaries is a party requiring, and there is no membership interest or other Capital Stock of Company or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Company or any of its Subsidiaries of any additional membership interests or other Capital Stock of Company or any of its Subsidiaries or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Capital Stock of Company or any of its Subsidiaries.

 

4.3.   Due Authorization.  The execution, delivery and performance of the Credit Documents have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.

 

4.4.   No Conflict.  The execution, delivery and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the Refinancing Transaction contemplated by the Credit Documents do not and will not (a) violate any provision of any law or any governmental rule or regulation applicable to Company or any of its

 

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Subsidiaries, any of the Organizational Documents of Company or any of its Subsidiaries, or any order, judgment or decree of any court or other agency of government in any jurisdiction binding on Company or any of its Subsidiaries except to the extent such violation could not be reasonably expected to have a Material Adverse Effect; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Company or any of its Subsidiaries except to the extent such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien, other than Permitted Liens, upon any of the properties or assets of Company or any of its Subsidiaries; or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Company or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date and except for any such approvals or consents the failure of which to obtain could not reasonably be expected to have a Material Adverse Effect.

 

4.5.   Governmental Consents.  The execution, delivery and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except as contemplated in Section 3.1 or as otherwise in connection with the Related Agreements, except for filings and recordings expressly set forth on Schedule 4.5 and except for any registration, consents, approvals, notices or other actions, the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

4.6.   Binding Obligation.  Each Credit Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought.

 

4.7.   Historical Financial Statements.  The Historical Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments. As of December 31, 2010, neither the Company nor any of its Subsidiaries has any contingent liability for taxes, long term lease or unusual forward or long term commitment that is not reflected in the Historical Financial Statements for fiscal year 2010 or the notes thereto and which in any such case is material in relation to the business, operations, properties, assets, condition (financial or otherwise) of Company and any of its Subsidiaries taken as a whole.

 

4.8.   [INTENTIONALLY OMITTED.]

 

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4.9.   No Material Adverse Change.  Since December 31, 2010, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.

 

4.10.   Adverse Proceedings, etc.  There are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.  Neither Company nor any of its Subsidiaries (a) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

4.11.   Taxes.  Except as otherwise permitted under Section 5.3, each of the Company and its Subsidiaries has filed all federal, state and foreign income and franchise tax returns required to be filed by them or received timely extensions thereof and has paid all taxes shown as due thereon, except where the failure to so file such returns and pay such taxes would not, individually or in the aggregate, have a Material Adverse Effect.  Other than tax deficiencies that the Company or any of its Subsidiaries is contesting in good faith and for which the Company or such Subsidiary has provided appropriate reserves, there is no tax deficiency that has been assessed against the Company or any of its Subsidiaries that would, individually or in the aggregate, have a Material Adverse Effect.

 

4.12.       Properties.(a)       Each of Company and its Subsidiaries has title to all material real property and title to all material personal property and assets reflected in their respective Historical Financial Statements referred to in Section 4.7, in each case except for assets disposed of since the date of such financial statements in the ordinary course of business, free and clear of all Liens, except (i) Permitted Liens, (ii) Liens contemplated by the Credit Documents, the Notes Indenture, the ABL Credit Facility or any documents or agreements related to the foregoing, or (iii) to the extent that failure to have such title or to the extent that the existence of such Liens would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

4.13.       Environmental Matters.  Except as would not, individually or in the aggregate, have a Material Adverse Effect, (A) the Company and each of its Subsidiaries are in compliance with and not subject to liability under applicable Environmental Laws (as defined below), (B) each of the Company and its Subsidiaries has made all filings and provided all notices required under any applicable Environmental Law, and has and is in compliance with all permits required under any applicable Environmental Laws and each of them is in full force and effect, (C) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of the Company or its Subsidiaries, threatened against the Company or any of its Subsidiaries under any Environmental Law, (D) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Company or any of its Subsidiaries, (E) none of the Company or its Subsidiaries has received notice that it has been identified as a potentially

 

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responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), or any comparable state law, (F) no property or facility of the Company or any of its Subsidiaries is (i) listed or proposed for listing on the National Priorities List under CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any state or local governmental authority and (G) none of the Company or any of its Subsidiaries is conducting or paying for in whole or in part any investigation, response or other corrective action pursuant to any Environmental Law at any site or facility, nor is any of them subject to or a party to any order, judgment, decree, contract or agreement which imposes any obligation or liability under any Environmental Law.

 

4.14.   No Defaults.  Neither Company nor any of its Subsidiaries is in breach of or default under (nor has any event occurred that, with notice or passage of time or both, would constitute a default under), or in violation of any of the terms or provisions under, any of its Contractual Obligations, except for any such breach, default, violation or event that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

4.15.   [INTENTIONALLY OMITTED.]

 

4.16.   Governmental Regulation.  Neither Company nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal, state or foreign statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Credit Document Obligations unenforceable.  Neither Company nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.17.   Margin Stock.  Neither Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the Loans made to such Credit Party will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors.

 

4.18.   Employee Matters.  Neither Company nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect.  There is (a) no unfair labor practice complaint pending against Company or any of its Subsidiaries, or to the best knowledge of Company, threatened against Company or any of its Subsidiaries before the National Labor Relations Board (or any foreign equivalent thereof) and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against Company or any of its Subsidiaries or to the best knowledge of Company, threatened against Company or any of its Subsidiaries, (b) no strike or work stoppage in existence or threatened involving Company or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect,  and (c) to the best knowledge of Company, no union representation question existing with respect to the employees of Company

 

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or any of its Subsidiaries and, to the best knowledge of Company, no union organization activity that is taking place, except (with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) such as is not reasonably likely to have a Material Adverse Effect.

 

4.19.       ERISA.  Except as would not, individually or in the aggregate, have a Material Adverse Effect, none of the Company or its Subsidiaries has any liability for any prohibited transaction or funding deficiency or any complete or partial withdrawal liability with respect to any pension, profit sharing or other plan that is subject to ERISA, to which the Company or any of its Subsidiaries makes or ever has made a contribution and in which any employee of the Company or any of its Subsidiaries is or has ever been a participant.  With respect to such plans, each of the Company and its Subsidiaries is in compliance in all material respects with all applicable provisions of ERISA except for any non-compliance that would not, individually or in the aggregate, have a Material Adverse Effect.

 

4.20.       Certain Fees.  No broker’s or finder’s fee or commission will be payable with respect hereto or any of the transactions contemplated hereby.

 

4.21.       Solvency.   The Company and its Subsidiaries, taken as a whole, are Solvent.

 

4.22.       Related Agreements.

 

(a)      Representations and Warranties.  Except to the extent otherwise expressly set forth herein or in the schedules hereto, and subject to the qualifications set forth therein, each of the representations and warranties given by any Credit Party in any Related Agreement is true and correct in all material respects as of the Closing Date (or as of any earlier date to which such representation and warranty specifically relates).

 

(b)      Governmental Approvals.  All Governmental Authorizations and all other authorizations, approvals and consents of any other Person required by the Related Agreements or to consummate the Refinancing Transaction have been obtained and are in full force and effect.

 

(c)      Conditions Precedent.  On the Closing Date, (i) all of the conditions to effecting or consummating the Refinancing Transaction set forth in the Related Agreements will have been duly satisfied and (ii)  and the Refinancing Transaction will have been consummated substantially in accordance with the Related Agreements applicable thereto and all applicable laws.

 

4.23.       Compliance with Statutes, etc.  Each of Company and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any Governmental Authorizations issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of Company or any of its Subsidiaries), except such

 

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non-compliance that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

4.24.       Disclosure.  No representation or warranty of any Credit Party contained in any Credit Document or in any other documents, certificates or written statements furnished to Lenders by or on behalf of Company or any of its Subsidiaries for use in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact (known to Company, in the case of any document not furnished by it) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made.

 

4.25.       Patriot Act.  To the extent applicable, each Credit Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the Untied States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Act”).  No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

SECTION 5.                                                                            AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that from the Closing Date until payment in full of all Credit Document Obligations, each Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.  Notwithstanding anything to the contrary in any Credit Document, the requirement of any delivery by any Credit Party, under this Section 5, Section 2 or otherwise under this Agreement or under any Credit Document, shall be satisfied solely where such delivery is by (i) Company on behalf of such Credit Party and each Credit Party authorizes Company to make such delivery and prepare and execute on such Credit Party’s behalf the documents to be delivered thereunder and acknowledges that the Administrative Agent and Lenders may rely on such documents prepared and transmitted by Company or (ii) transmission or physical delivery by Company following due execution by the applicable Credit Party.

 

5.1.   Financial Statements and Other Reports.  Company and each other Credit Party will deliver to Administrative Agents and Lenders:

 

(a)      [INTENTIONALLY OMITTED.];

 

(b)      Quarterly Financial Statements.  As soon as available, and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of operations and changes in equity and cash flows of Company and its Subsidiaries for such Fiscal Quarter and

 

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for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in comparative form the corresponding figures for the previous Fiscal Year, together with a Financial Officer Certification and MD&A with respect thereto; provided, however, that the timely filing by the Company with the Comission of a quarterly report on Form 10-Q (or any successor form) shall satisfy the requirements under this Section 5.1(b);

 

(c)      Annual Financial Statements.  As soon as available, and in any event within 120 days after the end of each Fiscal Year (preceded by the delivery of unaudited financial statements required by this clause (c) within 90 days after the end of such Fiscal Year), (i) the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of operations, changes in equity and cash flows of Company and its Subsidiaries for such Fiscal Year, setting forth in comparative form the corresponding figures for the previous Fiscal Year, together with a Financial Officer Certification and MD&A with respect thereto; and (ii) with respect to such consolidated financial statements a report thereon of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by Company; provided, however, that the timely filing by the Company with the Comission of an annual report on Form 10-K (or any successor form) shall satisfy the requirements under this Section 5.1(c);

 

(d)      Certificate of No Default.  Together with each delivery of financial statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed Officer’s Certificate certifying that no Default or Event of Default has occurred and is continuing under this Agreement or the other Credit Documents or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature of the Default or Event of Default and what action the Company has taken, is taking and proposes to take with respect thereto;

 

(e)      [INTENTIONALLY OMITTED.];

 

(f)       Notice of Default.  Promptly upon any officer of Company obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Company with respect thereto; (ii) that any Person has given any notice to Company or any of its Subsidiaries or taken any other action with respect to any event or condition set forth in Section 8.1(a)(5); or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, an Officer’s Certificate specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action Company has taken, is taking and proposes to take with respect thereto;

 

(g)      Notice of Litigation.  Promptly upon an Officer of the Company obtaining knowledge thereof, written notice of any Adverse Proceeding commenced or threatened against any Credit Party that would reasonably be expected to have a Material Adverse Effect;

 

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(h)      Other Information.  (A) Promptly upon their becoming available, copies of (i) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Company or any of its Subsidiaries with the Commission, and (ii) all press releases and other statements made available generally by Company or any of its Subsidiaries to the public concerning material developments in the business of Company or any of its Subsidiaries taken as a whole, (B) any other information and data with respect to the Company or any of its Subsidiaries as from time to time may be delivered under the First Lien Facility and/or to the extent reasonably requested by any Lender then holding ten percent (10%) or more of the aggregate Loans outstanding, the ABL Credit Facility or any other financing facility, financing arrangement or indenture in respect of Indebtedness in excess of $25.0 million and (C) such other information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent or any Lender then holding ten percent (10%) or more of the aggregate Loans outstanding.

 

Notwithstanding anything in this Section 5.1 to the contrary, the Company will not be deemed to have failed to comply with any of its agreements set forth under this Section 5.1 for purposes of clause (4) under Section 8.1 until 30 days after the date any report required to be provided under this Section 5.1 is due, and any failure to comply with this Section 5.1 shall be automatically cured when the Company or Holdings provides all required reports or files all required reports with the Commission.

 

5.2.         Existence.   Except as otherwise permitted under Section 6.5, each Credit Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business; provided, no Credit Party or any of its Subsidiaries shall be required to preserve any such existence, right or franchise, licenses and permits if (i) such Person’s Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to Lenders or (ii) the failure to preserve and keep in full force and effect would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

5.3.   Payment of Taxes and Claims.  Each Credit Party will, and will cause each of its Subsidiaries to, pay all federal and other material Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor.  No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Holdings, Company or any of their Subsidiaries).

 

5.4.   Maintenance of Properties.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition,

 

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ordinary wear and tear excepted, all material properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof except where the failure of any of the foregoing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.5.   Insurance.  Company will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Company and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to any reasonable self insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons.

 

5.6.   Inspections; Access to Management and Information  Each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by any Lender and any legal or financial consultants or advisors to the Administrative Agent or any Lender (any such consultant or advisor, an “Advisor”) to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested.  If such visit and inspection occurs at a time when no Default or Event of Default has occurred and is continuing, such visit and inspection by Lenders shall be coordinated through the Administrative Agent, shall be limited to one visit and inspection during any consecutive three-month period and any travel expenses shall be at the expense of such Lender.

 

5.7.         Lenders Meetings.  Company will, upon the request of Administrative Agent or Requisite Lenders participate in a meeting with Administrative Agent and Lenders once during each Fiscal Quarter to be held at Company’s corporate offices (or at such other location as may be agreed to by Company and Administrative Agent) at such time as may be agreed to by Company and Administrative Agents.

 

5.8.         Compliance with Laws.  Each Credit Party will comply, and shall cause each of its Subsidiaries and all other Persons, if any, on or occupying any Facilities to comply, with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.9.         [INTENTIONALLY OMITTED.]

 

5.10.       Subsidiaries.  If the Company or any of its Restricted Subsidiaries (A) acquires or creates another Wholly Owned Restricted Subsidiary (other than an Excluded Subsidiary) on or after the date of this Agreement or (B) any Restricted Subsidiary of the Company becomes a guarantor of the First Lien Facility or any other Indebtedness of the Company or any Subsidiary

 

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Guarantor or becomes an obligor with respect to the ABL Credit Facility, then, within 45 days of the date of such event, as applicable, such Subsidiary must (a) execute and deliver to Administrative Agent a Counterpart Agreement or another guaranty agreement with respect to the Obligations under this Agreement in form and substance reasonably satisfactory to Administrative Agent and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are similar to those described in Section 3.1(b) and 3.1(m).  With respect to each such Subsidiary, Company shall promptly send to Administrative Agent written notice setting forth with respect to such Person (i) to the extent applicable, the date on which such Person became a Subsidiary of Company, and (ii) all of the data required to be set forth in Schedule 4.2 with respect to all Subsidiaries of Company; provided, such written notice shall be deemed to supplement Schedule 4.2 for all purposes hereof. This Section 5.10 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. In addition, in the event that any Wholly Owned Restricted Subsidiary that is an Excluded Subsidiary ceases to be an Excluded Subsidiary, or if any Excluded Subsidiary becomes a guarantor or obligor with respect to the ABL Credit Facility or any other Indebtedness of the Company or any Subsidiary Guarantor, then, within 45 days of the date of such event, as applicable, such Subsidiary must (a) execute and deliver to Administrative Agent a Counterpart Agreement or another guaranty agreement with respect to the Obligations under this Agreement in form and substance reasonably satisfactory to Administrative Agent and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are similar to those described in Section 3.1(b) and 3.1(m).

 

5.11.   Further Assurances.  At any time or from time to time upon the request of the Administrative Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent may reasonably request in order to effect fully the purposes of the Credit Documents.  In furtherance and not in limitation of the foregoing (and to the extent not already in effect and to the extent permitted by applicable laws), each Credit Party shall take such actions as the Administrative Agent may reasonably request from time to time to ensure that the Credit Document Obligations (or relevant part thereof) are guarantied by the Guarantors.

 

SECTION 6.                                                                            NEGATIVE COVENANTS

 

The Company covenants and agrees that, from the Closing Date until payment in full of all Indebtedness under the Loans, the Company shall perform, and shall cause each of its Restricted Subsidiaries as applicable to perform, all covenants in this Section 6.

 

6.1.         Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

 

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness (including Acquired Debt) or issue any shares of Disqualified Stock, and the Company will not permit any of its Restricted Subsidiaries to issue

 

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any preferred stock (other than in each case Disqualified Stock or preferred stock of Restricted Subsidiaries held by the Company or a Restricted Subsidiary, so long as so held); provided, however, that (i) the Company or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and issue Disqualified Stock and (ii) any Subsidiary Guarantor may issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred, at the beginning of such four-quarter period.

 

(b) The provisions of Section 6.1(a) hereof will not prohibit the incurrence or issuance of any of the following (collectively, “Permitted Debt”):

 

(1) Indebtedness incurred by the Company or any Subsidiary Guarantor (as borrower, co-borrower, guarantor, obligor, co-obligor or otherwise) under one or more Credit Facilities (including the ABL Credit Facility) in an aggregate principal amount at any one time outstanding under the provision described in this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (A) $70.0 million and (B) the Borrowing Base as of the date of such incurrence;

 

(2) Indebtedness under the Obligations with respect to the Loans, the Loan Guarantees, this Agreement and any documents related to the foregoing;

 

(3) Indebtedness incurred by the Company and the Subsidiary Guarantors represented by the Notes and the Note Guarantees;

 

(4) Indebtedness of the Company and the Subsidiary Guarantors existing on the Closing Date (other than Indebtedness described in clauses (1), (2) and (3);

 

(5) Indebtedness of the Company or any of its Restricted Subsidiaries (including without limitation Capital Lease Obligations, mortgage financings or purchase money obligations), Disqualified Stock issued by the Company or any Restricted Subsidiary and preferred stock issued by any Restricted Subsidiary, in each case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary or in a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)), in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (5), not to exceed as of any date of incurrence the greater of (a) 3.75% of the Company’s Consolidated Total Assets and (b) $25.0 million;

 

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(6) Permitted Refinancing Indebtedness incurred by the Company or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Agreement to be incurred or Disqualified Stock or Preferred Stock permitted to be issued under Section 6.1(a) hereof or clause (2), (3), (4), (6), (9) or (19) of this Section 6.1(b);

 

(7) Intercompany Indebtedness incurred by the Company or any of its Restricted Subsidiaries and owing to and held by the Company or any of its Restricted Subsidiaries; provided, however, that:

 

(a)            if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is a Person other than the Company or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Loans, in the case of the Company, or the Loan Guarantee, in the case of a Subsidiary Guarantor; and

 

(b)           (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by the provision described in this clause (7);

 

(8) (a) the Guarantee by the Company or any of the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant; (b) the Guarantee by any Foreign Subsidiary, New US LLC 1 or New US LLC 2 of Indebtedness of another Foreign Subsidiary of the Company or New US LLC 1 or New US LLC 2 that was permitted to be incurred by another provision of this covenant, (c) any Guarantee by a Restricted Subsidiary of the Company of Indebtedness of the Company (so long as such Restricted Subsidiary also guarantees the Loans if required pursuant to this Agreement or (d) any Guarantee by a Subsidiary Guarantor of any Indebtedness of any Subsidiary Guarantor;

 

(9)  (x) Indebtedness, Disqualified Stock or Preferred Stock of the Company or any of its Subsidiary Guarantors incurred to finance an acquisition or (y) Acquired Debt; provided that, in either case, after giving effect to the transactions that result in the incurrence or issuance thereof, on a pro forma basis, (i) either (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant or (b) the Fixed Charge Coverage Ratio for the Company would not be greater than immediately prior to such transactions;

 

(10) preferred stock of a Restricted Subsidiary of the Company issued to the Company or another Restricted Subsidiary of the Company; provided that (a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock

 

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being held by a Person other than the Company or a Restricted Subsidiary thereof and (b) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary thereof will be deemed, in each case, to constitute an issuance of such preferred stock that was not permitted by the provision described in this clause (10);

 

(11) ABL Debt of the Company or any Subsidiary Guarantor under the following: (a) ABL Hedge Agreements that are incurred in the ordinary course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder, (b) ABL Bank Products Agreements in the ordinary course of business and (c) ABL Cash Management Agreements in the ordinary course of business;

 

(12) additional Indebtedness of the Company or any of its Restricted Subsidiaries incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (12), not to exceed as of any date of incurrence the greater of (x) 5.0% of the Company’s Consolidated Total Assets and (y) $35.0 million;

 

(13) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes;

 

(14) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;

 

(15) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;

 

(16) Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under this Agreement;

 

(17) Indebtedness of Foreign Subsidiaries, New US LLC 1 and New US LLC 2 incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (17), not to exceed as of any date of incurrence $25.0 million;

 

(18) Indebtedness issued by the Company or any of its Restricted Subsidiaries to any current, future or former director, officer, consultant or employee of the Company, the direct or indirect parent of the Company or any Restricted Subsidiary of the Company (or any of their Affiliates), or their estates or the beneficiaries of such estates to finance the

 

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purchase, redemption, acquisition or retirement for value of Equity Interests permitted by clause (2) of Section 6.3(B) in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (18), not to exceed $2.5 million as of any date of incurrence;

 

(19) Contribution Indebtedness;

 

(20) (a)  Indebtedness incurred in connection with any Sale and Leaseback and any refinancing, refunding, renewal or extension of the Attributable Debt in respect thereof (provided that, except to the extent otherwise permitted hereunder, the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and the direct and contingent obligors with respect to such Indebtedness are not changed), provided the Attributable Debt with respect to all Sale and Leaseback transactions and any refinancing, refunding, renewal or extension in respect thereof shall not exceed as of any date of incurrence $40.0 million in the aggregate;

 

(b)            Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;

 

(c)            Indebtedness representing deferred compensation to employees of the Company (or any direct or indirect parent of the Company) and its Restricted Subsidiaries incurred in the ordinary course of business; and

 

(21) Cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts.

 

For purposes of determining compliance with Section 6.1, in the event that any proposed Indebtedness or preferred stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (21) above, or is entitled to be incurred or issued pursuant to Section 6.1(a) hereof, the Company, in its sole discretion, will be permitted to divide and classify at the time of its incurrence or issuance, and may from time to time divide or reclassify, all or a portion of such item of Indebtedness or Disqualified Stock or preferred stock such that it will be deemed to have been incurred pursuant to one or more of such clauses (in whole or in part) or Section 6.1(a) hereof, to the extent that such reclassified Indebtedness could be incurred pursuant to such new clause or the first paragraph of this covenant at the time of such reclassification (including in part pursuant to one or more clauses and/or in part pursuant to the first paragraph of this covenant), provided, however, that Indebtedness under an ABL Credit Facility may only be deemed to have been incurred under clause (1) of the definition of Permitted Debt.

 

For the purpose of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant

 

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currency exchange rate in effect on the date such Indebtedness was incurred or first committed (in the case of revolving credit debt); provided that if such Indebtedness denominated in a foreign currency is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar- denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness.  The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

 

Notwithstanding any other provision of Section 6.1, the maximum amount of Indebtedness that may be incurred pursuant to Section 6.1 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies.  In addition, for purposes of determining any particular amount of Indebtedness, any Guarantees, Liens or obligations with respect to letters of credit, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included.

 

The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Loans and the applicable Loan Guarantees on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

 

6.2.         Liens

 

The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under this Agreement and the Loans are secured equally and ratably with the obligations so secured until such time as such obligations are no longer secured by a Lien, except that the foregoing shall not apply to Liens securing Indebtedness permitted to be incurred pursuant to Section 6.1 hereof; provided that, at the time of incurrence of such Indebtedness, and after giving pro forma effect thereto and to the application of the net proceeds thereof, the Consolidated Secured Debt Ratio would be no greater than 3.75 to 1.00.

 

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6.3.         Restricted Payments

 

(A)          The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)           declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends, payments or distributions (a) payable in Equity Interests (other than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary of the Company or (b) payable by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

 

(2)           purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any Restricted Subsidiary of the Company held by Persons other than the Company or any Restricted Subsidiary of the Company;

 

(3)           make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Subsidiary Guarantor that is contractually subordinated to the Loans or to any Loan Guarantee (excluding any intercompany Indebtedness between or among the Company and any of the Guarantors), except payments of (x) interest payable in accordance with the terms governing the applicable Indebtedness (including, for the avoidance of doubt, any AHYDO catch-up payment thereon similar to the Special Mandatory Repayment), (y) principal at the Stated Maturity thereof (or the satisfaction of a sinking fund obligation) or (z) principal and accrued interest, due within one year of the date of such payment, purchase, redemption, defeasance, acquisition or retirement; or

 

(4)           make any Restricted Investment (all such restricted payments and other restricted actions set forth in those clauses (1) through  (4) above (other than any exceptions thereto) being collectively referred to as “Restricted  Payments”),

 

unless, at the time of and after giving effect to such Restricted Payment:

 

(1)           no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(2)           the Company would, at the time of such Restricted Payment and after giving pro  forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 6.1(a) hereof; and

 

(3)           such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Closing Date permitted by the provisions described in clauses (1), (6), (7), (8), (9), (11), (12)(c), (d)

 

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and (e), (13), and (14) of the next succeeding paragraph (B), is less than the sum, without duplication, of:

 

(a)           50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter after the Closing Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

 

(b)           100% of the aggregate net cash proceeds and the fair market value of assets received by the Company since the Closing Date as a contribution to its equity capital or from the issue or sale of Equity Interests of the Company or from the issue or sale of Equity Interests of any direct or indirect parent of the Company to the extent such net cash proceeds are actually contributed to the Company as equity (other than Excluded Contributions, Refunding Capital Stock, Disqualified Stock and Designated Preferred Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company); plus

 

(c)           the net cash proceeds and the fair market value of assets received by the Company or any Restricted Subsidiary of the Company from (i) the disposition, sale, liquidation, retirement or redemption of all or any portion of any Restricted Investment made after the Closing Date, net of disposition costs and repurchases and redemptions of such Restricted Investments from the Company or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees which constitute Restricted Investments by the Company or its Restricted Subsidiaries, and (ii) the sale (other than to the Company or a Restricted Subsidiary of the Company) of the Capital Stock of an Unrestricted Subsidiary; plus

 

(d)           without duplication, (i) to the extent that any Unrestricted Subsidiary of the Company that was designated as such after the Closing Date is redesignated as a Restricted Subsidiary, the fair market value of the Company’s direct or indirect Investment in such Subsidiary as of the date of such redesignation, plus (ii) an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from payments of dividends, repayments of the principal of loans or advances or other transfers of assets from Unrestricted Subsidiaries of the Company to the Company or any Restricted Subsidiary of the Company after the Closing Date, except, in each case, to the extent that any such Investment or net reduction in Investment is included in the calculation of Consolidated Net Income or were used to reduce Permitted Investments; plus

 

(e)           without duplication, in the event the Company or any Restricted Subsidiary of the Company makes any Investment in a Person that, as a result of or in connection with such Investment, becomes a Restricted Subsidiary of the

 

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Company, an amount equal to the fair market value of the existing Investment in such Person made after the Closing Date that was previously treated as a Restricted Payment.

 

(B)           The provisions of Section 6.3(A) hereof will not prohibit:

 

(1)           the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof or the giving of a redemption notice related thereto, as the case may be, if at said date of declaration or notice such payment would have complied with the provisions of this Agreement;

 

(2)           (a)  the making of any Restricted Payment in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Company or any direct or indirect parent of the Company (other than any Disqualified Stock or any Equity Interests sold to a Restricted Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company) or from substantially concurrent contributions to the equity capital of the Company (collectively, including any such contributions, “Refunding Capital Stock”); and

 

(b)           the declaration and payment of accrued dividends on any Equity Interests redeemed, repurchased, retired, defeased or acquired out of the proceeds of the sale of Refunding Capital Stock within 45 days of such sale;

 

provided that the amount of any such proceeds or contributions that are utilized for any Restricted Payment pursuant to this clause (2) shall be excluded from the amount described in clause (3)(b) of Section 6.3(A) hereof and clause (4) of Section 6.3(B) hereof and shall not constitute an Excluded Contribution;

 

(3)           the payment, repayment, defeasance, redemption, repurchase, retirement or other acquisition of (a) Indebtedness of the Company or any Guarantor that is contractually subordinated to the Loans or to any Loan Guarantee or (b) Disqualified Stock of the Company or any Restricted Subsidiary thereof, in each such case in exchange for, or out of the net cash proceeds from, an incurrence of Permitted Refinancing Indebtedness;

 

(4)           Restricted Investments acquired (a) from the proceeds of a capital contribution to, or out of the net cash proceeds of substantially concurrent contributions to, the equity capital of the Company or (b) from the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company) of, or in exchange for, Equity Interests of the Company (other than Disqualified Stock) or any direct or indirect parent of the Company (so long as such proceeds are contributed to the Company); provided, that for the purposes hereof, the amount of any such net cash proceeds that are utilized for any such acquisition and the fair market value of any assets so acquired or exchanged shall be excluded from the amount described in clause (3)(b) of Section 6.3(A) hereof and clause (2) of Section 6.3(B) hereof and shall not constitute an Excluded Contribution;

 

(5)           the repurchase of Equity Interests deemed to occur (i) upon the exercise of options or warrants if such Equity Interests represent all or a portion of the exercise price thereof and (ii) in connection with the withholding of a portion of the Equity Interests

 

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granted or awarded to a director or an employee to pay for the taxes payable by such director or employee upon such grant or award;

 

(6)           the payment of dividends on the Company’s common stock (or the payment of dividends to Holdings or any other direct or indirect parent of the Company to fund the payment of dividends on its common stock) following any public offering of common stock of the Company or Holdings or any other direct or indirect parent of the Company, in an aggregate amount of up to 6.0% per annum of the net proceeds received by the Company (or by Holdings or any other direct or indirect parent of the Company and contributed to the Company) from such public offering; provided, however, that the aggregate amount of all such dividends pursuant to this clause (6) since the Closing Date shall not exceed the aggregate amount of net proceeds received by the Company (or by a direct or indirect parent of the Company and contributed to the Company) from such public offering;

 

(7)           the purchase, redemption, retirement or other acquisition for value of any Equity Interests of the Company, Holdings or any other direct or indirect parent of the Company held by any current, future or former director, officer, consultant or employee of the Company, Holdings or any other direct or indirect parent of the Company or any Restricted Subsidiary of the Company, or their estates or the beneficiaries of such estates (including the payment of dividends and distributions to Holdings or any other direct or indirect parent of the Company to enable Holdings or such other parent to repurchase Equity Interests owned by its directors, officers, consultants and employees), in an amount not to exceed $5.0 million in any calendar year; provided that the Company may carry over and make in subsequent calendar years, in addition to the amounts permitted for such calendar year, the amount of purchases, redemptions, acquisitions or retirements for value (and dividends and distributions) permitted to have been but not made in any preceding calendar year up to a maximum of $10.0 million in any calendar year, provided, further, that such amounts will be increased by (a) the cash proceeds from the sale after the Closing Date of Equity Interests of the Company or, to the extent contributed to the Company, Equity Interests of Holdings or any other direct or indirect parent of the Company, in each case to directors, officers, consultants or employees of Holdings, the Company or any other direct or indirect parent of the Company or any Restricted Subsidiary of the Company after the Closing Date, plus (b) the cash proceeds of key man life insurance policies received by the Company, its Restricted Subsidiaries, Holdings or any other direct or indirect parent of the Company and contributed to the Company after the Closing Date, in the case of each of clauses (a) and (b), to the extent such net cash proceeds are not otherwise applied to make or otherwise increase the amounts available for Restricted Payments pursuant to clause (3)(b) of Section 6.3(A) hereof or clauses (2), (4) or (16) of Section 6.3(B) hereof;

 

(8)           upon the occurrence of a Change of Control (or similarly defined term in other Indebtedness) and within 90 days after completion of any offer to prepay or repurchase Loans pursuant to Section 2.14  hereof, any prepayment, repurchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Loans or to any Loan Guarantee that is required to be repurchased or redeemed pursuant to the terms thereof as a result of such Change of Control (or similarly defined term in other Indebtedness), at a purchase price not

 

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greater than 101% of the outstanding principal amount thereof (plus accrued and unpaid interest, if any);

 

(9)           within 90 days after completion of any offer to prepay or repurchase Loans or other Pari Passu Obligations pursuant to Section 6.7 hereof, any prepayment, repurchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Loans or to any Loan Guarantee that is required to be repurchased or redeemed pursuant to the terms thereof as a result of such Asset Sale (or similarly defined term in such other Indebtedness), at a purchase price not greater than 100% of the outstanding principal amount thereof (plus accrued and unpaid interest and liquidated damages, if any);

 

(10)         payments or distributions, in the nature of satisfaction of dissenters’ rights, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of Section 6.5 hereof;

 

(11)         the payment of cash in lieu of the issuance of fractional shares of Equity Interests upon exercise or conversion of securities exercisable or convertible into Equity Interests of the Company or Holdings or any direct or indirect parent of the Company (and payments of dividends to Holdings or any direct or indirect parent of the Company for such purposes);

 

(12)         the declaration and payment of dividends or distributions by the Company or any Restricted Subsidiary to, or the making of loans to, Holdings or any other direct or indirect parent of the Company in amounts sufficient for Holdings or any other direct or indirect parent of the Company to pay, in each case without duplication:

 

(a)           franchise and excise taxes and other fees, taxes and expenses, in each case, to the extent required to maintain their corporate existence, and any taxes required to be withheld and paid by Holdings or any other direct or indirect parent of the Company;

 

(b)           with respect to any taxable period during which the Company or any of its Subsidiaries is a member of a consolidated, unitary, combined or similar income tax group in which Holdings (or the direct or indirect parent of Holdings) is the common parent, the portion of its consolidated, unitary, combined or similar U.S. federal, state, local and/or non-U.S. income taxes (as applicable) of such income tax group attributable to the income of the Company and any of its Subsidiaries, in an amount not to exceed the income tax liabilities that would have been payable by the Company and/or its Subsidiaries (as applicable) on a stand-alone basis (or as a stand-alone group), reduced, in each case, by any such income taxes paid or to be paid directly by the Company or its Subsidiaries; provided, that the amount of any such payments attributable to any income of an Unrestricted Subsidiary shall be limited to the cash distributions made by such Unrestricted Subsidiary to the Company or its Restricted Subsidiaries for such purpose;

 

(c)           (1) customary salary, bonus and other benefits payable to officers and employees of Holdings or any other direct or indirect parent of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries and (2)

 

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any reasonable and customary indemnification claims made by directors or officers of the Company, Holdings or any other direct or indirect parent of the Company;

 

(d)           general corporate administrative, operating and overhead costs and expenses of Holdings or any other direct or indirect parent of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries; and

 

(e)           fees and expenses related to any equity or debt offering or acquisition by Holdings or such other parent entity (whether or not successful);

 

(13)         the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries and preferred stock of any Restricted Subsidiary issued or incurred in accordance with Section 6.1 hereof to the extent such dividends are included in the definition of “Fixed Charges”;

 

(14)         the declaration and payment of dividends or distributions:

 

(a)           to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of the Company issued after the Closing Date;

 

(b)           to Holdings or any other direct or indirect parent of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of Holdings or any other direct or indirect parent of the Company issued after the Closing Date; provided, however, that the aggregate amount of dividends declared and paid pursuant to this clause (14)(b) does not exceed the net cash proceeds actually received by the Company from any such sale of Designated Preferred Stock; and

 

(c)           on Refunding Capital Stock that is preferred stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of Section 6.3(B) hereof;

 

provided, however, in the case of each of (a), (b) and (c) of this clause (14), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is preferred stock, after giving effect to such issuance or declaration on a pro forma basis, the Company would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

 

(15)        other Restricted Payments in an amount which, taken together with all other Restricted Payments made pursuant to this clause (15), do not exceed $25.0 million;

 

(16)         the Refinancing Transaction;

 

(17)         Restricted Payments in an aggregate amount not to exceed the amount of all Excluded Contributions; and

 

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(18) the payment, repayment, defeasance, redemption, repurchase, retirement or other acquisition of amounts outstanding under the Loans to the extent required to be redeemed to prevent it from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Internal Revenue Code;”

 

provided that, in the case of clauses (4) and (6) through (9) above, no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof.

 

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.  In determining whether any Restricted Payment is permitted by Section 6.3 hereof, the Company and its Restricted Subsidiaries may allocate all or any portion of such Restricted Payment among the categories described in clauses (1) through (17) of the immediately preceding paragraph or among such categories and the types of Restricted Payments described in Section 6.3(A) hereof (including categorization in whole or in part as a Permitted Investment); provided that, at the time of such allocation, each Restricted Payment, or allocated portions thereof, would be permitted under the various provisions of Section 6.3 hereof into which such particular Restricted Payment is allocated; and provided,  further, that the Company and its Restricted Subsidiaries may reclassify all or a portion of such Restricted Payment or Permitted Investment in any manner that complies with Section 6.3 hereof, and following such reclassification such Restricted Payment or Permitted Investment shall be treated as having been made pursuant to only the clause or clauses of Section 6.3 hereof to which such Restricted Payment or Permitted Investment has been reclassified.  The cancellation of Indebtedness owing to the Company from members of management, directors or consultants of the Company, any of its direct or indirect parents, Holdings or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parents or Holdings will not be deemed to constitute a Restricted Payment for purposes of this Agreement.

 

6.4.         Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

 

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

 

(1)           pay dividends or make any other distributions on its Capital Stock (or with respect to any other interest or participation in, or measured by, its profits) to the Company or any of its Restricted Subsidiaries or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;

 

(2)           immediately after giving effect to such transaction no Event of Default exists;

 

(3)           transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

 

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(b) The restrictions in Section 6.4(a) hereof will not apply to encumbrances or restrictions:

 

(1)           existing under, by reason of or with respect to the ABL Documents, Indebtedness existing on the Closing Date, or any other agreements in effect on the Closing Date and any amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings thereof; provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, than those in effect on the Closing Date;

 

(2)           existing under, by reason of or with respect to any other Credit Facility of the Company permitted under this Agreement; provided that the applicable encumbrances and restrictions contained in the agreement or agreements governing the other Credit Facility are not materially more restrictive, taken as a whole, than those contained in the ABL Credit Facility and/or this Agreement, in each case as in effect on the Closing Date;

 

(3)           existing under, by reason of or with respect to applicable law, rule, regulation or administrative or court order;

 

(4)           with respect to any Person or the property or assets of a Person acquired by the Company or any of its Restricted Subsidiaries existing at the time of such acquisition and not incurred in connection with or in contemplation of such acquisition, which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired and any amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings thereof; provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacement or refinancings are entered into in the ordinary course of business or not materially more restrictive, taken as a whole, than those contained in the ABL Credit Facility, this Agreement, Indebtedness existing on the Closing Date or such other agreements as in effect on the date of the acquisition;

 

(5)           in the case of the provision described in clause (3) of Section 6.4(a) hereof:

 

(a)           that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset,

 

(b)           existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary thereof not otherwise prohibited by the indenture,

 

(c)           existing under, by reason of or with respect to (i) purchase money obligations for property acquired in the ordinary course of business or (ii) capital leases or operating leases that impose encumbrances or restrictions on the property so acquired or covered thereby, or

 

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(d)           arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary thereof in any manner material to the Company or any Restricted Subsidiary thereof;

 

(6)           existing under, by reason of or with respect to customary provisions in joint venture, operating or similar agreements, asset sale agreements and stock sale agreements arising in connection with the entering into of such transactions;

 

(7)           existing under, by reason of or with respect to any agreement for the sale or other disposition of some or all of the Capital Stock of, or any property and assets of, a Restricted Subsidiary that restricted distributions by that Restricted Subsidiary pending the closing of such sale or other disposition;

 

(8)           existing under, by reason of or with respect to Permitted Refinancing Indebtedness; provided that the encumbrances and restrictions contained in the agreements governing that Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(9)           restricting cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(10)         existing under, by reason of or with respect to customary provisions contained in leases or licenses of intellectual property and other agreements, in each case, entered into in the ordinary course of business;

 

(11)         existing under, by reason of or with respect to (a) the Notes Indenture, the Notes (and any additional notes), the Note Guarantees and the security documents (including any exchange notes or exchange guarantees issued in respect thereof), (b) the Loans and the documents related thereto, (c) the intercreditor agreements with respect to the Consolidated Secured Indebtedness or (d) any amendments, supplements, modifications, restatements, replacements, renewals, refundings, restructurings, increases or refinancing of any of the foregoing;

 

(12)         existing under, by reason of or with respect to Indebtedness of the Company or a Restricted Subsidiary not prohibited to be incurred under the indenture; provided that (a) such encumbrances or restrictions are ordinary and customary in light of the type of Indebtedness being incurred and the jurisdiction of the obligor and (b) such encumbrances or restrictions will not affect in any material respect the Company’s or any Guarantor’s ability to make principal and interest payments on the Loans, as determined in good faith by the Company;

 

(13)         consisting of customary restrictions pursuant to any Permitted Receivables Financing; or

 

(14)         existing under, by reason of or with respect to, any Consolidated Secured Indebtedness.

 

For purposes of determining compliance with this Section 6.4, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to distributions

 

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being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Company or a Restricted Subsidiary of the Company to other Indebtedness incurred by the Company or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

6.5.         Merger, Consolidation or Sale of Assets

 

The Company will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation) or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person or Persons, unless:

 

(1)           either:  (a) the Company is the surviving corporation; or (b) the Person formed by or surviving such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance, lease or other disposition shall have been made (i) is a corporation, limited liability company, partnership (including a limited partnership) or trust organized or existing under the laws of the United States, any state or territory thereof or the District of Columbia and (ii) assumes all the obligations of the Company under the Loans, this Agreement and the documents related to the foregoing pursuant to agreements reasonably satisfactory to the Requisite Lenders;

 

(2)           immediately after giving effect to such transaction no Event of Default exists;

 

(3)           immediately after giving effect to such transaction and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, on a pro forma basis, either (a) the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company) would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 6.1(a) hereof; or (b) the Fixed Coverage Ratio for the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company) would not be greater than immediately prior to such transactions;

 

(4)           each Guarantor, unless such Guarantor is the Person with which the Company has entered into a transaction under the covenant described under this Section 6.5 shall have by amendment to its Loan Guarantee confirmed that its Loan Guarantee shall apply to the obligations of the Company or the surviving Person in accordance with the Loans and this Agreement; and

 

(5)           at the time of the transaction the Company will have delivered, or caused to be delivered, to the Requisite Lenders an Officers’ Certificate and opinion of counsel, each to the effect that such merger, consolidation or sale of assets comply with this Agreement.

 

The provision described in clause (3) of this Section 6.5 will not apply to (a) any merger, consolidation or sale, assignment, lease, transfer, conveyance or other disposition of assets between or among the Company, any of its Restricted Subsidiaries and/or any of the Guarantors or (b) any merger between the Company and an Affiliate of the Company, or between a Restricted Subsidiary and an Affiliate of the Company, in each case in this clause (b)

 

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solely for the purpose of reincorporating the Company or such Restricted Subsidiary, as the case may be, in the United States, any state thereof, the District of Columbia or any territory thereof, so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

 

6.6.         Merger, Consolidation or Sale of GuarantorsA Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Company or another Guarantor, unless:

 

(1)           immediately after giving effect to that transaction, no Default or Event of Default exists; and;

 

(2)           either:

 

(a)           the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) (i) is organized or existing under the laws of the United States, any state thereof or the District of Columbia (provided that the provisions described in this clause (i) shall not apply if such Guarantor is organized under the laws of a jurisdiction other than the United States, any state thereof or the District of Columbia) and (ii) assumes all the obligations of that Guarantor under the Loans and this Agreement; or

 

(b)           in the case of a Subsidiary Guarantor, such sale or other disposition or consolidation or merger complies with Section 6.7 hereof.

 

Notwithstanding the foregoing, any Guarantor may (i) merge with the Company or another Guarantor solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (ii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in clause (1) of the preceding paragraph.

 

6.7.         Asset Sales

 

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(1)           the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

 

(2)           with respect to Asset Sales involving aggregate consideration in excess of $25.0 million, such fair market value is determined in good faith by the Board of Directors of the Company or Holdings; and

 

(3)           other than in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form

 

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of cash or Cash Equivalents or a combination thereof; provided that, for purposes of this provision, each of the following shall be deemed to be cash:

 

(a)           any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto, or as would be shown on such balance sheet or footnotes if such liability was incurred subsequent to the date of such balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities, Indebtedness that is by its terms contractually subordinated in right of payment to the Loans or any Loan Guarantee, liabilities to the extent owed to the Company or any Restricted Subsidiary of the Company and liabilities incurred in contemplation of such Asset Sale) that are assumed by the transferee of any such assets or Equity Interests pursuant to an agreement that releases the Company or such Restricted Subsidiary, as the case may be, from further liability, or that are assumed or released as a matter of law;

 

(b)           any securities, notes or other obligations received by the Company or any such Restricted Subsidiary, as the case may be, from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents within 180 days (to the extent of the cash or Cash Equivalents received in that conversion); and

 

(c)           any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (c) that is at the time outstanding, not to exceed the greater of (x) $50.0 million and (y) 7.5% of the Company’s Consolidated Total Assets at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.

 

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or such Restricted Subsidiary may apply such Net Proceeds at its option and to the extent it so elects:

 

(1)           to prepay, repay, redeem or repurchase or offer to prepay, repay, redeem or repurchase Consolidated Secured Indebtedness;

 

(2)           if such Asset Sale is by a Restricted Subsidiary that is not a Guarantor, to repay Indebtedness and other obligations of a Restricted Subsidiary that is not a Guarantor other than Indebtedness owed to the Company or a Guarantor;

 

(3)           [INTENTIONALLY OMITTED.];

 

(4)           to prepay, repay, repurchase or redeem or offer to prepay, repay, repurchase or redeem the Loans, and, to the extent required by the terms of any Indebtedness that is Pari Passu with the Loans (“Pari Passu Obligations”), any such Pari Passu Obligation;

 

(5)           to make an Investment in other assets or property;

 

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(6)           to make an Investment in Capital Stock of another Permitted Business if, after giving effect to such Investment, the Permitted Business becomes a Subsidiary Guarantor or is merged into or consolidated with the Company or any Subsidiary Guarantor;

 

(7)           to make an Investment in Replacement Assets or to make a capital expenditure with respect to assets; or

 

(8)           any combination of the foregoing;

 

provided that the Company will be deemed to have complied with the provision described in clauses (5), (6) and (7) of this paragraph if, and to the extent that, within 365 days after the Asset Sale that generated the Net Proceeds, the Company or such Restricted Subsidiary has entered into and not abandoned or rejected a binding agreement to make an Investment in assets or property or make an Investment in Capital Stock of another Permitted Business or to make an Investment in Replacement Assets or to make a capital expenditure with respect to assets in compliance with the provisions described in clauses (5), (6) and (7) of this paragraph, and that purchase, Investment or capital expenditure is thereafter completed within 180 days after the end of such 365-day period.

 

Any Net Proceeds from Asset Sales that are not applied or invested as described in the two preceding paragraphs will constitute “Excess Proceeds.”  Within 10 business days after the aggregate amount of Excess Proceeds exceeds $25.0 million, the Company will make an offer to all holders of the Loans, and to the extent required, the Pari Passu Obligations, to repay, repurchase or redeem the maximum principal amount of Loans and such other Pari Passu Obligations that may be purchased out of the Excess Proceeds.  The offer price in any such asset sale offer will be equal to 100% of the principal amount of the Loans and such Pari Passu Obligations purchased, plus accrued and unpaid interest on the Loans and such Pari Passu Obligations to the date of purchase, and will be payable in cash.  If any Excess Proceeds remain after consummation of such an asset sale offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by this Agreement.  If the aggregate principal amount of Loans and such Pari Passu Obligations tendered into such asset sale offer exceeds the amount of Excess Proceeds, the Loans and such Pari Passu Obligations shall be purchased on a pro rata basis based on the principal amount of Loans and such Pari Passu Obligations tendered.  Upon completion of each asset sale offer, the amount of Excess Proceeds shall be reset at zero.  The Company may satisfy the foregoing obligation with respect to any Net Proceeds by making an asset sale offer prior to the expiration of the relevant 365-day period (as such period may be extended) or with respect to Excess Proceeds of $25.0 million or less.

 

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6.8.   Transactions with Affiliates

 

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, conduct any business or enter into or permit to exist any transaction or series of related transactions (including, but not limited to, the purchase, sale or exchange of property, the making of any Investment, the giving of any Guarantee or the rendering of any service) with any Affiliate of the Company or any Restricted Subsidiary involving consideration in excess of $3.0 million other than transactions solely among any of the Company and its Restricted Subsidiaries (an “Affiliate Transaction”), unless:

 

(1)           such business, transaction or series of related transactions is on terms no less favorable, taken as a whole, to the Company or such Restricted Subsidiary than those that could be obtained in a comparable arm’s-length transaction with an unaffiliated party; and

 

(2)           the Company delivers to the Requisite Lenders:

 

(i)            with respect to any Affiliate Transaction involving an amount or having a value in excess of $10.0 million, an Officers’ Certificate stating that such business, transaction or series of related transactions complies with clause (1) above;

 

(ii)            with respect to any Affiliate Transaction involving an amount or having a value in excess of $20.0 million, a resolution of the Board of Directors of Holdings set forth in an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this Section 6.8  and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the disinterested members of Holdings’ Board of Directors;

 

(iii)            with respect to any Affiliate Transaction involving an amount or having a value in excess of $40.0 million, a written opinion of a nationally recognized investment banking, accounting or appraisal firm stating that the transaction (or relevant purchase price or valuation) is fair to the Company or such Restricted Subsidiary from a financial point of view.

 

(b) The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 6.8(a) hereof  :

 

(1)           transactions between or among the Company, its Restricted Subsidiaries, and/or any Guarantors;

 

(2)           payment of reasonable fees and compensation to, and indemnification and similar arrangements on behalf of, current, former or future directors of Holdings, any other direct or indirect parent of the Company, the Company or any Restricted Subsidiary of the Company;

 

(3)           Restricted Payments that are permitted by the provisions of Section 6.3 hereof, or the definition of “Permitted Investments” (including any payments that are excluded from the definitions of “Restricted Payment” and “Restricted Investment”);

 

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(4)           any sale of Equity Interests (other than Disqualified Stock) of the Company;

 

(5)           loans and advances to officers and employees of Holdings, any other direct or indirect parent of the Company, the Company or any of the Company’s Restricted Subsidiaries or guarantees in respect thereof or otherwise made on the Company’s or any of its Restricted Subsidiaries’ behalf (or the cancellation of such loans, advances or guarantees), in both cases for bona fide business purposes in the ordinary course of business;

 

(6)           any employment, consulting, service or termination agreement, or customary indemnification arrangements, entered into by the Company or any of its Restricted Subsidiaries or Holdings with current, former or future officers and employees of Holdings, any direct or indirect parent of the Company, the Company or any of its Restricted Subsidiaries and the payment of compensation to officers and employees of Holdings, any direct or indirect parent of the Company, the Company or any of its Restricted Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), in each case in the ordinary course of business;

 

(7)           transactions with a Person that is an Affiliate of the Company solely because the Company, directly or indirectly, owns Equity Interests in, or controls, such Person;;

 

(8)           any contracts, instruments or other agreements or arrangements in each case as in effect on the Closing Date, and any transactions pursuant thereto or contemplated thereby, or any amendment, modification or supplement thereto or any replacement thereof entered into from time to time, as long as such agreement or arrangement as so amended, modified, supplemented or replaced, taken as a whole, is not materially more disadvantageous to the Company and its Restricted Subsidiaries at the time executed than the original agreement or arrangement as in effect on the Closing Date;

 

(9)           any Guarantee by Holdings or any other direct or indirect parent of the Company of Indebtedness or other liabilities or obligations of the Company or any Guarantor that was permitted by this Agreement;

 

(10)         transactions with Affiliates solely in their capacity as holders of Indebtedness or Equity Interests of the Company or any of its Subsidiaries, so long as such transaction is with all holders of such class (and there are such non-Affiliate holders) and such Affiliates are treated no more favorably than all other holders of such class generally;

 

(11)         transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services (including pursuant to joint venture agreements) in the ordinary course of business on terms not materially less favorable as might reasonably have been obtained at such time from a Person that is not an Affiliate of the Company, as determined in good faith by Holdings or the Company;

 

(12)         transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Requisite Lenders a letter from an independent financial advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of prong (1) of Section 6.8(a) hereof;

 

(13)         any contribution to the common equity capital of the Company;

 

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(14)                            any transaction with any Person who is not an Affiliate immediately before the consummation of such transaction that becomes an Affiliate as a result of such transaction;

 

(15)                            the pledge of Equity Interests of any Unrestricted Subsidiary;

 

(16)                            subject to the limitations described under clause (12)(b) of paragraph (B) under Section 6.3, payments by the Company (or Holdings or any other direct or indirect parent of the Company) or any of the Restricted Subsidiaries pursuant to any tax sharing, allocation or similar agreement;

 

(17)                            the incurrence of Indebtedness represented by the Notes, the Note Guarantees and the Notes Indenture, the execution, delivery and performance under any document related to the Notes, the Note Guarantees and the Notes Indenture and any amendment, modification, refinancing, restructuring or replacement thereof;

 

(18)                            the use of proceeds of the Notes and the Loans to repay the Company’s outstanding indebtedness;

 

(19)                            sales of accounts receivable, or participations therein, or any related transaction, in connection with any Permitted Receivables Financing;

 

(20)                            the payment, repayment, defeasance, redemption, repurchase, retirement or other acquisition of the Notes and amounts outstanding under the Loans to the extent otherwise permitted hereunder;

 

(22)                            any agreement that provides customary registration rights to the equity holders of the Company or any direct or indirect parent of the Company and the performance by the parties thereto of their obligations, duties and rights under their obligations, duties and rights under such agreement, and any shareholders agreement (including but not limited to the Shareholders Agreement) among some or all of the shareholders of the Company or any direct or indirect parent of the Company and the performance by the parties thereto of such agreement;

 

(23)                            Guarantees by Holdings of Indebtedness or other liabilities or obligations of Foreign Subsidiaries, New US LLC 1 and/or New US LLC 2 that are permitted by this Agreement; and

 

(24)                            transactions between the Company or any Restricted Subsidiary, on the one hand, and any person that is an Affiliate of the Company or any Restricted Subsidiary, on the other hand, solely because a director of such Person is also a director of the Company or any direct or indirect parent of the Company.

 

6.9.   Designation of Restricted and Unrestricted Subsidiaries.

 

The Board of Directors of the Company or Holdings may designate any Subsidiary (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary; provided that:

 

(1)          any Guarantee by the Company or any Restricted Subsidiary of the Company of any Indebtedness of the Subsidiary being so designated will be deemed to be an incurrence of Indebtedness by the Company or such Restricted Subsidiary (or both, if applicable) at the

 

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time of such designation, and such incurrence of Indebtedness would be permitted under Section 6.1;

 

(2)          the aggregate fair market value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary being so designated (including any Guarantee by the Company or any Restricted Subsidiary of the Company of any Indebtedness of such Subsidiary) will be deemed to be an Investment made as of the time of such designation and that such Investment would be permitted under Section 6.3;

 

(3)          such Subsidiary does not own any Equity Interests of, or hold any Liens on any property of, the Company or any Restricted Subsidiary of the Company (other than Equity Interests of any Restricted Subsidiary of such Subsidiary that is concurrently being designated as an Unrestricted Subsidiary);

 

(4)          the Subsidiary being so designated, after giving effect to such designation:

 

(a)                                  is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company that would not be permitted under Section 6.8 after giving effect to the exceptions thereto;

 

(b)                                 is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results except to the extent permitted under Section 6.1 and Section 6.3; and

 

(c)                                  (i) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries, except to the extent such Guarantee or credit support would be released upon such designation or would be permitted under Section 6.3 and (ii) to the extent the Indebtedness of the Subsidiary is non-recourse Indebtedness, any Guarantee or credit support by the Company or a Restricted Subsidiary would be permitted under Section 6.1 and Section 6.3; and

 

(5)          no Event of Default would be in existence following such designation.

 

Any designation of a Restricted Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Requisite Lenders by delivering to the Administrative Agent of a certified copy of the resolution of the Board of Directors of the Company or Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by this Agreement.  If, at any time, any Unrestricted Subsidiary would fail to meet any of the preceding requirements described in clause (4) above, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness, Investments or Liens on the property of such Subsidiary shall be deemed to be incurred or made by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness, Investments or Liens are not permitted to be incurred or made as of such date under this Agreement, the Company shall be in default under this Agreement.

 

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The Board of Directors of the Company or Holdings may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

 

(1)          such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if such Indebtedness is permitted under Section 6.1; calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period;

 

(2)          all outstanding Investments owned by such Unrestricted Subsidiary will be deemed to be made as of the time of such designation and such Investments shall only be permitted if such Investments would be permitted under Section 6.3;

 

(3)          all Liens upon property or assets of such Unrestricted Subsidiary existing at the time of such designation would be permitted under Section 6.2; and

 

(4)          no Default or Event of Default would be in existence following such designation.

 

SECTION 7.                                                                            LOAN GUARANTEE

 

7.1.                            Guaranty of the Obligations.  Subject to the provisions of Section 7.2, Subsidiary Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual payment in full of all Credit Document Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a), or any equivalent provision in any applicable jurisdiction) (collectively, the “Guaranteed Obligations”).

 

7.2.                            Contribution by Subsidiary Guarantors.  All Subsidiary Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair and equitable manner, their obligations arising under this Loan Guarantee.  Accordingly, in the event any payment or distribution is made on any date by a Subsidiary Guarantor (a “Funding Guarantor”) under this Loan Guarantee such that its Aggregate Payments exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such date.  “Fair Share” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Loan Guarantee in respect of the obligations Guaranteed.  “Fair Share Contribution Amount” means, with respect to a Contributing Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Contributing Guarantor under this Loan Guarantee that would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any

 

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Contributing Guarantor for purposes of this Section 7.2, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Contributing Guarantor.  “Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (1) the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Loan Guarantee (including, without limitation, in respect of this Section 7.2), minus (2) the aggregate amount of all payments received on or before such date by such Contributing Guarantor from the other Contributing Guarantors as contributions under this Section 7.2.  The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor.  The allocation among Contributing Guarantors of their obligations as set forth in this Section 7.2 shall not be construed in any way to limit the liability of any Contributing Guarantor hereunder.  Each Subsidiary Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 7.2.

 

7.3.                            Payment by Subsidiary Guarantors.  Subject to Section 7.2, Subsidiary Guarantors hereby jointly and severally agree, in furtherance of the foregoing and not in limitation of any other right which any Beneficiary may have at law or in equity against any Subsidiary Guarantor by virtue hereof, that upon the failure of Company to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a), or any equivalent provision in any applicable jurisdiction), Subsidiary Guarantors will upon demand pay, or cause to be paid, in cash, to Administrative Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for the Company’s becoming the subject of a case under the Bankruptcy Code or other similar legislation in any jurisdiction, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against Company for such interest in the related bankruptcy case) and all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.

 

7.4.                            Liability of Subsidiary Guarantors Absolute.  Each Subsidiary Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations or valid release of a Guarantor in accordance with the Credit Documents.  In furtherance of the foregoing and without limiting the generality thereof, each Subsidiary Guarantor agrees as follows:

 

(a)                  this Loan Guarantee is a guaranty of payment when due and not of collectability.  This Loan Guarantee is a primary obligation of each Subsidiary Guarantor and not merely a contract of surety;

 

(b)                 Administrative Agent may enforce this Loan Guarantee upon the occurrence of an Event of Default notwithstanding the existence of any dispute

 

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between Company and any Beneficiary with respect to the existence of such Event of Default;

 

(c)                  the obligations of each Subsidiary Guarantor hereunder are independent of the obligations of Company and the obligations of any other guarantor (including any other Guarantor) of the obligations of Company, and a separate action or actions may be brought and prosecuted against such Guarantor whether or not any action is brought against Company or any of such other guarantors and whether or not Company is joined in any such action or actions;

 

(d)                 payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed Obligations which has not been paid.  Without limiting the generality of the foregoing, if Administrative Agent is awarded a judgment in any suit brought to enforce any Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

 

(e)                  any Beneficiary, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Subsidiary Guarantor’s liability hereunder, from time to time may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or for the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that such Beneficiary may have against any such security, in each case as such Beneficiary in its discretion may determine consistent herewith and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against Company or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under the Credit Documents; and

 

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(f)                    this Loan Guarantee and the obligations of Subsidiary Guarantors hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any of the following, whether or not any Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Credit Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Document, or any agreement relating to such other guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Credit Documents or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though any Beneficiary might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any Beneficiary’s consent to the change, reorganization or termination of the corporate structure or existence of Company or any of its Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims which Company may allege or assert against any Beneficiary in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed Obligations.

 

7.5.                            Waivers by Guarantors.  Each Subsidiary Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to require any Beneficiary, as a condition of payment or performance by such Subsidiary Guarantor, to (i) proceed against Company, any other guarantor (including any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from Company, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of any Beneficiary in favor of Company or any other Person, or (iv) pursue any other remedy in the power of any Beneficiary whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Company or any other Guarantor including any defense based on or arising out of the lack of validity or the

 

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unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Company or any other Guarantor from any cause other than payment in full of the Guaranteed Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon any Beneficiary’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to  willful misconduct or gross negligence, as determined in a final, non-appealable judgment by a court of competent jurisdiction; (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Subsidiary Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations affecting such Subsidiary Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to Company and notices of any of the matters referred to in Section 7.4 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

 

7.6.                            Guarantors’ Rights of Subrogation, Contribution, etc.  Until the Guaranteed Obligations shall have been indefeasibly paid in full, each Subsidiary Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Subsidiary Guarantor now has or may hereafter have against Company or any other Guarantor or any of its assets in connection with this Loan Guarantee or the performance by such Subsidiary Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including without limitation (a) any right of subrogation, reimbursement or indemnification that such Subsidiary Guarantor now has or may hereafter have against Company with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or remedy that any Beneficiary now has or may hereafter have against Company, and (c) any benefit of, and any right to participate in, any collateral or security now or hereafter held by any Beneficiary.  In addition, until the Guaranteed Obligations shall have been indefeasibly paid in full, each Subsidiary Guarantor shall withhold exercise of any right of contribution such Subsidiary Guarantor may have against any other guarantor (including any other Guarantor) of the Guaranteed Obligations, including, without limitation, any such right of contribution as contemplated by Section 7.2.  Each Subsidiary Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification such Subsidiary Guarantor may have against Company or against any collateral or security, and any rights of contribution such Subsidiary Guarantor may have against any such other guarantor, shall be junior and subordinate to any rights any Beneficiary may have against Company, to all right, title and interest any Beneficiary may have in any such collateral or security, and to any right any Beneficiary may have against such other guarantor.  If any amount shall be paid to any Subsidiary Guarantor on account of any

 

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such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such amount shall be held in trust for the Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to the Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

 

7.7.                            Subordination of Other Obligations.  Any Indebtedness of Company or any Subsidiary Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is hereby subordinated in right of payment to the Guaranteed Obligations, and any such indebtedness collected or received by the Obligee Guarantor after an Event of Default has occurred and is continuing shall be held in trust for the Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to the Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Guarantor under any other provision hereof.

 

7.8.                            Continuing Guaranty.  This Loan Guarantee is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full.  Each Subsidiary Guarantor hereby irrevocably waives any right to revoke this Loan Guarantee as to future transactions giving rise to any Guaranteed Obligations.

 

7.9.                            Authority of Guarantors or Company.  It is not necessary for any Beneficiary to inquire into the capacity or powers of any Subsidiary Guarantor or Company or the officers, directors or any agents acting or purporting to act on behalf of any of them.

 

7.10.                     Financial Condition of Company.  Any Loan may be made to Company or continued from time to time may be entered into from time to time, without notice to or authorization from any Guarantor regardless of the financial or other condition of Company at the time of any such grant or continuation.  No Beneficiary shall have any obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the financial condition of Company.  Each Subsidiary Guarantor has adequate means to obtain information from Company on a continuing basis concerning the financial condition of Company and its ability to perform its obligations under the Credit Documents, and each Subsidiary Guarantor assumes the responsibility for being and keeping informed of the financial condition of Company and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.  Each Subsidiary Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary to disclose any matter, fact or thing relating to the business, operations or conditions of Company now known or hereafter known by any Beneficiary.

 

7.11.                     Bankruptcy, etc.  (a)    Without limiting any Guarantor’s ability to file a voluntary bankruptcy petition in respect of itself (but subject to the rights and remedies in respect thereof pursuant to Section 8.1), so long as any Guaranteed Obligations remain outstanding, no Subsidiary Guarantor shall, without the prior written consent of Administrative Agent acting pursuant to the instructions of Requisite Lenders, commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against Company or any other Guarantor.  The obligations of Subsidiary Guarantors hereunder shall not

 

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be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company or any Guarantor or by any defense which Company or any Guarantor may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.

 

(b)                 Each Subsidiary Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of Subsidiary Guarantors and Beneficiaries that the Guaranteed Obligations which are guaranteed by Subsidiary Guarantors pursuant hereto should be determined without regard to any rule of law or order which may relieve Company of any portion of such Guaranteed Obligations.  Subsidiary Guarantors will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person to pay Administrative Agent, or allow the claim of Administrative Agent in respect of, any such interest accruing after the date on which such case or proceeding is commenced.

 

(c)                  In the event that all or any portion of the Guaranteed Obligations are paid by Company, the obligations of Subsidiary Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from any Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

 

7.12.                     Release of Loan Guarantees

 

(a)    The Holdings Guaranty will automatically and unconditionally be released without the need for any further action by any party upon written notice from the Company to the Administrative Agent (1) if such entity is not a guarantor of any other Indebtedness of the Company or any other Guarantor, or (2) if such Guarantor merges or consolidates with, or transfers all or substantially all of its assets to, the Company or another Guarantor or (3) without limiting the foregoing clause (1), upon release of such Guarantor under the Notes (other than due to the payment in full of the Notes).

 

(b)                 The Loan Guarantee of a Subsidiary Guarantor will automatically and unconditionally be released without the need for any action by any party:

 

(1)          in connection with any sale or other disposition of Capital Stock of a Subsidiary Guarantor (including by way of consolidation or merger or otherwise) to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Company, such that, immediately after giving effect to such transaction, such Guarantor would no longer

 

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constitute a Subsidiary of the Company, if the sale of such Capital Stock of that Subsidiary Guarantor complies with Section 6.3 and Section 6.7;

 

(2)          in connection with the merger or consolidation of a Subsidiary Guarantor with the Company or any other Subsidiary Guarantor;

 

(3)          in the event of the release of the guarantee under the ABL Credit Facility and the Notes Indenture of a Subsidiary Guarantor if such Person is not a guarantor of any other Indebtedness of the Company or any other Guarantor;

 

(4)          if the Company properly designates any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary under this Agreement or the Notes Indenture; or

 

(6)          upon a liquidation or dissolution of a Subsidiary Guarantor permitted under this Agreement.

 

In addition, the Loan Guarantee of any Subsidiary Guarantor will be released in connection with a sale of all or substantially all of the assets of such Subsidiary Guarantor in a transaction that complies with the conditions in Section 6.6.

 

SECTION 8.                                                                            EVENTS OF DEFAULT

 

8.1.                            Events of Default.  In case of the happening of any of the following events (each, an “Event of Default”):

 

(1)                                  a default in any payment of interest on any Loans or fees due hereunder for 30 consecutive days,

 

(2)                                  a default in payment when due (whether at maturity, upon acceleration, redemption or otherwise) of the principal of, or premium, if any, on the Loans;

 

(3)                                  the failure by the Company or any of its Subsidiaries to comply with Sections 2.14, 5.10, 6.5 or 6.7 for 30 days after written notice by the Administrative Agent or Lenders holding more than 25% of the Loans then outstanding;

 

(4)                                  the failure by the Company or any of its Subsidiaries to comply for 60 days after written notice by the Administrative Agent or Lenders holding more than 25% of the Loans then outstanding with any of the other agreements contained in the Credit Documents other than those referred to in clauses (1)-(3) above;

 

(5)                                  default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any of its Significant Subsidiaries (or any group of Restricted Subsidiaries of the Company that together would constitute a Significant Subsidiary of the Company), or the payment of which is guaranteed by the Company or any of its Significant Subsidiaries (or any group of Restricted Subsidiaries of the Company that together would constitute a Significant Subsidiary of the Company), whether such Indebtedness or Guarantee now exists, or is created after the Closing Date, if that default causes (after giving effect to applicable grace periods)that Indebtedness to become or be

 

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declared due and payable (or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be, and the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness that has been declared due and payable aggregates $30.0 million or more;

 

(6)                                  failure by the Company or any of its Significant Subsidiaries (or any group of Restricted Subsidiaries of the Company that together would constitute a Significant Subsidiary of the Company) to pay non-appealable final judgments aggregating in excess of $30.0 million (excluding amounts covered by insurance or bonded) which judgments are not paid, discharged or stayed for a period of more than 60 days after such judgments have become final and non-appealable and, in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

 

(7)                                  except as permitted by this Agreement, any Loan Guarantee or the Holdings Guaranty shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect in any material respect or any Guarantor or Holdings, or any Person acting on their behalf, shall deny or disaffirm in writing its obligations under the Loan Guarantee or Holdings Guaranty if, and only if, in each such case, such Default continues for 21 days after notice of such Default shall have been given to the Administrative Agent;

 

(8)                                  the Company or any Subsidiary, pursuant to or within the meaning of the Bankruptcy Code (or any equivalent or similar law (foreign or domestic)):

 

(i)                                     commences a voluntary case;

 

(ii)                                  consents to the entry of an order for relief against it in any involuntary case;

 

(iii)                               consents to the appointment of a custodian, conservator, liquidator, sequestartor, receiver, administrator, trustee or other similar official of it or for any substantial part of its property; or

 

(iv)                              makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency;

 

(9)                                  a court of competent jurisdiction enters an order or decree under the Bankruptcy Code (or any equivalent or similar law (foreign or domestic)) and the order or decree remains unstayed and in effect for 60 days:

 

(i)                                     for relief against the Company or any of its Subsidiaries in an involuntary case;

 

(ii)                                  appoints a custodian, conservator, liquidator, sequestartor, receiver, administrator, trustee or other similar official of the Company or any of its Subsidiaries or for any substantial part of its or their property;

 

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(iii)                               orders the winding up or liquidation of the Company or any Subsidiary.

 

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

8.2.                            Acceleration.  Upon the occurrence and during the continuance of any Event of Default, Administrative Agent shall at the direction of Lenders holding at least 25% of the Loans then outstanding (or, prior to the Closing Date, obligations to make 25% of the Loans on the Closing Date):

 

(i)                                     declare the obligation of each Lender to make Loans on the Closing Date to be suspended or terminated, whereupon such obligation to make Loans on the Closing Date shall forthwith be suspended or terminated;

 

(ii)                                  declare all or any portion of the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, all premium, if any, and all other amounts owing or payable hereunder or under any other Credit Document to be immediately due and payable; without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party; and/or

 

(iii)                                               exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Credit Documents or applicable law;

 

provided, however, that upon the occurrence of any event specified in Sections 8.1(a)(8) or 8.1(a)(9) above, the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of Administrative Agent or any Lender.

 

SECTION 9.                                                                            ADMINISTRATIVE AGENT

 

9.1.                            Appointment of Administrative Agent.  Each Lender hereby authorizes Administrative Agent to act as such in accordance with the terms hereof and the other Credit Documents.  Administrative Agent hereby agrees to act upon the express conditions contained herein and the other Credit Documents, as applicable.  The provisions of this Section 9 are solely for the benefit of Administrative Agent and Lenders and no Credit Party shall have any rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties hereunder, Administrative Agent shall act solely for the benefit of the Lenders with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Administrative Agent” and similar and related terms in any Credit Document, which terms are used for title purposes only, and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Holdings or any of its Subsidiaries.

 

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9.2.                            Powers and Duties.  Each Lender irrevocably authorizes each Administrative Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Credit Documents as are specifically delegated or granted to Administrative Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto.  Administrative Agent shall have only those duties and responsibilities that are expressly specified herein and the other Credit Documents.  Administrative Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees.  Administrative Agent shall not have, by reason hereof or any of the other Credit Documents, a fiduciary relationship in respect of any Lender; and nothing herein or any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as to impose upon Administrative Agent any function, duty, responsibility, obligation or other liability in respect hereof or any of the other Credit Documents except as expressly set forth herein or therein.

 

9.3.                            General Immunity

 

(a)   No Responsibility for Certain Matters.  Administrative Agent shall not be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency hereof or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by Administrative Agent to Lenders or by or on behalf of any Credit Party, and Lender or any person providing the Settlement Service to any Agent or any Lender in connection with the Credit Documents and the transactions contemplated thereby or for the financial condition or business affairs of any Credit Party or any other Person liable for the payment of any Credit Document Obligations, nor shall Administrative Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Credit Documents or as to the use of the proceeds of the Loans or as to the existence or possible existence of any Event of Default or Default or to make any disclosures with respect to the foregoing.  Anything contained herein to the contrary notwithstanding, Administrative Agent shall not have any liability arising from confirmations of the amount of outstanding Loans or the component amounts thereof.

 

(b)   Exculpatory Provisions.  Neither Administrative Agent nor any of its officers, partners, directors, employees or agents shall be liable to Lenders for any action taken or omitted by Administrative Agent under or in connection with any of the Credit Documents except to the extent caused primarily by Administrative Agent’s gross negligence or willful misconduct (as determined in a final, non-appealable judgment by a court of competent jurisdiction).  Administrative Agent shall be entitled to refrain from any act or from taking of any action (including failing to take an action) in connection herewith or any of the other Credit Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until Administrative Agent shall have received instructions in respect thereof from Requisite Lenders (or, if applicable, such other Lenders as may be required to give such instructions under this Agreement), and, upon receipt of such instructions from

 

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Requisite Lenders (or, if applicable, such other Lenders as may be required to give such instructions under this Agreement), Administrative Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions.  Without prejudice to the generality of the foregoing, (i) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, including any Settlement Confirmation, any electronic transmission (including any information or document transmitted electronically by any means), any telephone message or any other communication issued by any Settlement Service, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Company and its Subsidiaries), accountants, experts and other professional advisors selected by it and shall not be responsible for any action of any sub-agent selected by it without gross negligence or willful misconduct, as determined in a final, non-appealable judgment by a court of competent jurisdiction; and (ii) no person shall have any right of action whatsoever against Administrative Agent as a result of Administrative Agent acting or (where so instructed) refraining from acting hereunder or any of the other Credit Documents in accordance with the instructions of Requisite Lenders (or, if applicable, such other Lenders as may be required to give such instructions under this Agreement, each of which instruction shall be deemed an authorization from all Lenders to such Agent and shall be binding on all Lenders).  Notwithstanding any instruction from the Lenders, Administrative Agent shall be not be required to take, or to omit to take, any action that is, in the opinion of Administrative Agent or its counsel, contrary to any Credit Document or applicable Requirement of Law.

 

(c)                  Delegation of Duties.  Administrative Agent may perform any and all of its duties and exercise its rights and powers under this Agreement or under any other Credit Document by or through any one or more sub-agents appointed by Administrative Agent.  Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through its respective Affiliates. The exculpatory, indemnification and other provisions of this Article 9 shall apply to any Affiliates of the Administrative Agent and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.  All of the rights, benefits, and privileges (including the exculpatory and indemnification provisions) of this Article 9 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and shall apply to their respective activities as sub-agent as if such sub-agent and Affiliates were named herein.  Notwithstanding anything herein to the contrary, with respect to each sub-agent appointed by Administrative Agent (unless otherwise provided by Administrative Agent), (i) such sub-agent shall be a third party beneficiary under this Agreement with respect to all such rights, benefits and privileges (including exculpatory rights and rights to indemnification) and shall have all of the rights and benefits of a third party beneficiary, including an independent right of action to enforce such rights, benefits and privileges (including exculpatory rights and rights to indemnification) directly, without the consent or joinder of any other Person, against any or all of the Credit Parties and the Lenders, (ii) such rights, benefits and privileges

 

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(including exculpatory rights and rights to indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have obligations to Administrative Agent and not to any Credit Party, Lender or any other Person and no Credit Party, Lender or any other Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise, against such sub-agent.

 

9.4.                            Administrative Agent Entitled to Act as Lender.  The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, Administrative Agent in its individual capacity as a Lender hereunder.  With respect to its participation in the Loans, Administrative Agent and its Affiliates shall have the same rights and powers hereunder as any other Lender and may exercise the same as if it were not performing the duties and functions delegated to it hereunder, and the term “Lender” shall, unless the context clearly otherwise indicates, include Administrative Agent in its individual capacity.  Administrative Agent and its Affiliates may lend money to, own securities of, and generally engage in any kind of business with Company or any of its Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company for services in connection herewith and otherwise without having to account for the same to Lenders.

 

9.5.                            Lenders’ Representations, Warranties and Acknowledgment.

 

(a)                  Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company and its Subsidiaries in connection with this Agreement and that it has made and shall continue to make its own appraisal of the creditworthiness of Company and its Subsidiaries without reliance upon Administrative Agent and without reliance upon any document solely or in part because such document was transmitted by Administrative Agent.  Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and Administrative Agent shall have no responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.  In addition (and without limiting the foregoing), (i) Administrative Agent shall not be responsible for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Credit Document, (ii) Administrative Agent makes no warranty or representation, and Administrative Agent shall not be responsible, to any Lender for any statement, document, information, representation or warranty made or furnished by or on behalf of any sub-agent or affiliate, in or in connection with any Credit Document or any transaction contemplated therein, whether or not transmitted by Administrative Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Administrative Agent in connection with the Credit Documents and (iii) Administrative Agent shall have no duty to ascertain or to inquire as to the performance or observance of any provision of any Credit Document, whether any condition set forth in any Credit Document is satisfied or waived, as to the

 

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financial condition of any Credit Party or as to the existence or continuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from the Company or any Lender describing such Default or Event of Default clearly labeled “notice of default”.

 

(b)                 Each Lender, by delivering its signature page to this Agreement shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by Administrative Agent, Requisite Lenders or Lenders, as applicable, on the Closing Date or the Closing Date.

 

9.6.                            Right to Indemnity.  Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify Administrative Agent, to the extent that Administrative Agent shall not have been reimbursed by any Credit Party (and without limiting any Credit Party’s obligation to do so), for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable advisors’ fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Administrative Agent in connection with any Credit Document or with any of its powers, rights, remedies or duties hereunder or under the other Credit Documents or otherwise in its capacity as Administrative Agent in any way relating to or arising out of or in connection with this Agreement or the other Credit Documents or the preparation thereof or any amendment, modification or termination thereof; provided, no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements primarily resulting from Administrative Agent’s gross negligence or willful misconduct (as determined in a final, non-appealable judgment by a court of competent jurisdiction).  If any indemnity furnished to Administrative Agent for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired, Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished; provided, in no event shall this sentence require any Lender to indemnify Administrative Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and provided  further, this sentence shall not be deemed to require any Lender to indemnify Administrative Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.

 

9.7.                            Successor Administrative Agent.  Administrative Agent may resign at any time by giving prior written notice thereof to Lenders and the Company, and Administrative Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to the Company and Administrative Agent, as applicable, and signed by Requisite Lenders.  The resignation of Administrative Agent shall be effective immediately upon the giving of such notice, whereupon Administrative Agent shall be discharged from its duties and obligations hereunder.  In such event, all Credit Document Obligations owing to Administrative Agent shall be due and payable by the Company upon giving of such notice.  Upon any such notice of resignation or any such removal, the Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Administrative Agent.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor

 

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Administrative Agent that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Administrative Agent.  After any retiring or removed Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder or otherwise required (or necessary or appropriate) to be taken by Administrative Agent thereafter.

 

9.8.                            Guaranties.

 

(a)                  Guaranties.  Each Lender hereby further authorizes the Administrative Agent on behalf of and for the benefit of Lenders, (i) to act as disbursing and collecting agent with respect of payments and collection in connection with Credit Documents, (ii) to file and prove claims and other documents necessary or desirable to allow the claims of the Lenders with respect to any Guaranteed Obligation in any proceeding described in Sections 8.1(8) and (9) and any other similar proceedings and (iv) execute any amendment, consent or waiver under the Credit Documents on behalf of any Lender that has consented in writing.  Subject to Section 11.5, without further written consent or authorization from Lenders, Administrative Agent may execute any documents or instruments necessary to release any Guarantor from the Loan Guarantee in accordance with Section 7.12 or in connection with a sale or other disposition (including by merger or consolidation) of such Guarantor to which, or otherwise to the extent to which, the Requisite Lenders (or, if applicable, such other Lenders as may be required to give such consent under this Agreement) have otherwise consented.

 

(b)                 Right to Enforce Loan Guarantee.  Anything contained in any of the Credit Documents to the contrary notwithstanding, Company, Administrative Agent and each Lender hereby agree that (i) no Lender shall have any right individually to enforce the Loan Guarantee, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf of Lenders in accordance with the terms hereof.

 

SECTION 10.                                                                     [RESERVED.]

 

SECTION 11.                                                                     MISCELLANEOUS

 

11.1.   Notices.  Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to a Credit Party, Lender or Administrative Agent shall be (i) in the English language and (ii) sent to such Person’s address (which, in the case of any Credit Party, may be sent to the Company’s address) as set forth on Appendix A or in the other relevant Credit Document, and in the case of any Lender, the address as indicated on Appendix A or otherwise indicated to Administrative Agent in writing or posted to Intralinks®  or another E-System as and to the extent provided below.  Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex,

 

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or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, no notice to Administrative Agent shall be effective until received by Administrative Agent; provided  further, any such notice or other communication shall at the request of the Administrative Agent be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto as designated by the Administrative Agent from time to time.  Each such notice may also be (i) posted to Intralinks® (to the extent such system is available and set up by or at the direction of the Administrative Agent prior to posting) in a reasonably appropriate location by uploading such notice, demand, request, direction or other communication to www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded coversheet or using such other means of posting to Intralinks® as may be available and reasonably acceptable to the Administrative Agent prior to such posting or (ii) posted to any other E-System set up by or at the direction of the Administrative Agent in an appropriate location; provided, no notice to Administrative Agent shall be effective until received by Administrative Agent.  Each such posting shall be effective on the later of the date of such posting in an appropriate location and the date access to such posting is given to the recipient thereof in accordance with the standard procedures applicable to such E-System.  Transmission by electronic mail (including E-Fax, even if transmitted to the fax numbers set forth on Appendix A) shall not be sufficient or effective to transmit any notice required or expressly authorized to be delivered hereunder unless such transmission is an available means to post to any E-System.

 

11.2.                     Expenses.  Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly (a) all the actual and reasonable out-of-pocket costs and expenses of preparation of the Credit Documents and any consents, amendments, waivers or other modifications thereto including the reasonable and documented fees, expenses and disbursements of (i) Wachtell, Lipton, Rosen & Katz, counsel to the Lenders and (ii) counsel to the Administrative Agent; (b) subject to Section 5.6, in the case of the costs and fees of the Advisor, all the actual out-of-pocket costs and reasonable and documented fees, expenses and disbursements of any auditors, accountants, consultants or appraisers; (c) all other out-of-pocket actual and reasonable and documented costs and expenses incurred by Administrative Agent in connection with the syndication of the Loans and the negotiation, preparation and execution of the Credit Documents and any consents, amendments, waivers or other modifications thereto and the transactions contemplated thereby; and (e) during the continuance of a Default or an Event of Default, all out-of-pocket costs and reasonable and documented expenses, including reasonable and documented attorneys’ fees and out-of-pocket costs of settlement, incurred by Administrative Agent and Lenders in enforcing any Credit Document Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the enforcement of the Loan Guarantee or Holdings Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

 

11.3.                     Indemnity.

 

(a)                  In addition to the payment of expenses pursuant to Section 11.2, whether or not the transactions contemplated hereby shall be consummated, each Credit Party agrees to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless, Administrative Agent and each Lender and the officers, partners,

 

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directors, trustees, employees, agents, sub-agents, investment advisors and Affiliates of Administrative Agent and each Lender (each, an “Indemnitee”), from and against any and all Indemnified Liabilities; provided, no Credit Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful misconduct of that Indemnitee, as determined in a final, non-appealable judgment by a court of competent jurisdiction).  To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this Section 11.3 may be unenforceable in whole or in part because they are violative of any law or public policy, the applicable Credit Party shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

 

(b)                 To the extent permitted by applicable law, no Credit Party shall assert, and each Credit Party hereby waives, any claim against Lenders, the Administrative Agent and their respective Affiliates, directors, employees, attorneys, agents, sub-agents, trustees or advisors, on any theory of liability, for special, indirect, consequential or punitive damages  (as opposed to direct or actual damages) (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, arising out of, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Credit Party hereby waives, releases and 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.

 

11.4.                     Set-Off.  In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of any Event of Default each Lender is hereby authorized by each Credit Party, without notice to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of any Credit Party against and on account of the obligations and liabilities of any Credit Party to such Lender hereunder, irrespective of whether or not (a) such Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or any other amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured.

 

11.5.                     Amendments and Waivers.

 

(a)                  Subject to Section 11.20, no amendment or waiver of any provision of this Agreement or any other Credit Document, and no consent with respect to any departure by any Credit Party therefrom, shall be effective unless the same shall be in writing and signed by the Requisite Lenders (or by the Administrative Agent with the consent of the Requisite Lenders) and the Company and then such waiver shall be

 

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effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders directly affected thereby (or by Administrative Agent with the consent of all the Lenders directly affected thereby), in addition to Administrative Agent (but only to the extent that Administrative Agent is directly affected thereby) and the Company, do any of the following:

 

(i)                                     increase or extend the obligation of any Lenders to make Loans or the outstanding principal balance of Loans of any Lender (or reinstate any obligation to make Loans terminated pursuant to Section 8.2(i));

 

(ii)                                  postpone or delay any date fixed for, or reduce or waive, any scheduled installment of principal or any payment of interest, fees or other amounts (other than principal) due to the Lenders (or any of them) hereunder or under any other Credit Document;

 

(iii)                               reduce the principal of, or the rate of interest specified herein (it being agreed that the waiver of the default interest margin shall only require the consent of the Requisite Lenders) or the amount of interest payable in cash specified herein on any Loan, or of any fees or other amounts payable hereunder or under any other Credit Document;

 

(iv)                              amend Section 2.17, 11.5 or the definition of “Requisite Lenders” or “Pro Rata Share” or any provision providing for consent or other action by all Lenders;

 

(v)                                 discharge any Material Credit Party from its respective Credit Document Obligations under the Credit Documents, except as may be provided in this Agreement or the other Credit Documents;

 

(vi)                              consent to the assignment or transfer by any Material Credit Party of any of its rights and obligations under any Credit Document (other than in connection with a disposition, merger or corporate reorganization permitted under this Agreement).

 

it being agreed that all Lenders shall be deemed to be directly affected by an amendment or waiver of the type described in the preceding clauses (i), (iv), (v) and (vi).

 

(b)                 No amendment, waiver or consent shall, unless in writing and signed by Administrative Agent, in addition to the Requisite Lenders or all Lenders directly affected thereby, as the case may be (or by Administrative Agent with the consent of the Requisite Lenders or all the Lenders directly affected thereby, as the case may be), affect the rights or duties of the Administrative Agent under this Agreement or any other Credit Document.

 

(c)                  Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such  Lender.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances.  Any amendment,

 

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modification, termination, waiver or consent effected in accordance with this Section 11.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party.

 

11.6.                     Successors and Assigns; Participations.

 

(a)                  Generally.  This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders.  No Credit Party’s rights or obligations hereunder nor any interest therein may be assigned or delegated by any Credit Party without the prior written consent of all Lenders.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of each of the Administrative Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                 Register.  Company, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Loans listed therein for all purposes hereof, and no assignment or transfer of any Loan shall be effective, in each case, unless and until recorded in the Register following receipt of (x) a written or electronic confirmation of an assignment issued by a Settlement Service pursuant to Section 11.6(d) (a “Settlement Confirmation”) or (y) an Assignment Agreement effecting the assignment or transfer thereof, in each case, as provided in Section 11.6(d).  Each assignment shall be recorded in the Register on the Business Day the Settlement Confirmation or Assignment Agreement is received by the Administrative Agent, if received by 12:00 p.m. (noon) (Local Time), and on the following Business Day if received after such time, prompt notice thereof shall be provided to Company and a copy of such Assignment Agreement or Settlement Confirmation shall be maintained, as applicable.  The date of such recordation of a transfer shall be referred to herein as the “Assignment Effective Date.”  Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Loans.

 

(c)                  Right to Assign.  With the consent of the Company (such consent not to be unreasonably, conditioned, delayed or withheld and, in any event, to be deemed granted if not denied within ten (10) Business Days after the request by the Administrative Agent), each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including, without limitation, all or a portion of the Loans owing to it or other Credit Document Obligations (provided, however, that each such assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any Loan):

 

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(i)                     to any Person meeting the criteria of clause (i) of the definition of the term of “Eligible Assignee” upon the giving of notice to Company and Administrative Agent; and

 

(ii)                  to any Person meeting the criteria of clause (ii) of the definition of the term of “Eligible Assignee”; provided, each such assignment pursuant to this Section 11.6(c)(ii) shall be in an aggregate amount of not less than $1,000,000 as of trade date, if specified (or such lesser amount as may be agreed to by Company and Administrative Agent or as shall constitute the aggregate amount of the Loans of the assigning Lender, it being understood that simultaneous assignments by two or more Related Funds shall in any event be aggregated for purposes of determining compliance with such $1,000,000 threshold);

 

provided, that after the occurrence and during the continuance of an Event of Default, the Company’s consent to any assignment shall not be required.

 

(d)                 Mechanics.  Assignments of Dollar Loans by Lenders may be made via an electronic settlement system acceptable to Administrative Agent as designated in writing from time to time to the Lenders by Administrative Agent (the “Settlement Service”).  Each such assignment shall be effected by the assigning Lender and proposed assignee pursuant to the procedures then in effect under the Settlement Service, which procedures shall be consistent with the other provisions of this Section 11.6.  Each assignor Lender and proposed assignee shall comply with the requirements of the Settlement Service in connection with effecting any transfer of Loans pursuant to the Settlement Service.  Administrative Agent’s consent shall be deemed to have been granted pursuant to Section 11.6(c)(ii) with respect to any transfer effected through the Settlement Service.  Subject to the other requirements of this Section 11.6, assignments and assumptions of the Loans may also be effected by manual execution delivery to Administrative Agent of an Assignment Agreement, together with a processing and recordation fee of $3,500, with the prior written consent of Administrative Agent (such consent not to be unreasonably withheld or delayed); provided that (i) the foregoing fee shall not be payable in the case of an assignment to another Lender, an Affiliate of a Lender or a Related Fund with respect to a Lender, and (ii) in the case of contemporaneous assignments by a Lender to more than one fund managed by the same investment advisor (which funds are not then Lenders hereunder), only a single such fee shall be payable for all such contemporaneous assignments.  Initially, assignments and assumptions of Loans shall be effected by such manual execution until Administrative Agent notifies Lenders to the contrary.  Assignments made pursuant to the foregoing provision shall be effective as of the Assignment Effective Date.  In connection with all assignments there shall be delivered to Administrative Agent such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be required to deliver pursuant to Section 2.20.  Notwithstanding anything herein or in any Assignment Agreement to the contrary and (i) unless notice to the contrary is delivered to the Lenders from the Administrative Agent or (ii) so long as no Default or Event of Default has occurred and is continuing, payment to the assignor by the assignee in respect of the settlement 

 

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of an assignment of any Loan shall include such compensation to the assignor as may be agreed upon by the assignor and the assignee with respect to all unpaid interest which has accrued on such Loan to but excluding the Assignment Effective Date.  On and after the applicable Assignment Effective Date, the applicable assignee shall be entitled to receive all interest paid or payable with respect to the assigned Loan, whether such interest accrued before or after the applicable Assignment Effective Date.

 

(e)                  Representations and Warranties of Assignee.  Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the Loans, as the case may be, represents and warrants as of the Closing Date or as of the Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in loans such as the applicable Loans; and (iii) it will make or invest in its Loans for its own account in the ordinary course and without a view to distribution of such Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this Section 11.6, the disposition of such Loans or any interests therein shall at all times remain within its exclusive control).

 

(f)                    Effect of Assignment.  Subject to the terms and conditions of this Section 11.6, as of the “Assignment Effective Date” (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent of its interest in the Loans as reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned to the assignee, relinquish its rights (other than any rights which survive the termination hereof under Section 11.9) and be released from its obligations hereunder (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment Effective Date; provided, anything contained in any of the Credit Documents to the contrary notwithstanding, such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); and (iii) if any such assignment occurs after the issuance of any Promissory Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its Promissory Note to Administrative Agent for cancellation, and thereupon Company, at such Company’s sole expense, shall issue and deliver a new Promissory Note, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect the outstanding Loans of the assignee and/or the assigning Lender.

 

(g)                 Participations.  Each Lender shall have the right at any time to sell one or more participations to any Person (each such Person, a “Participant”) (other than Holdings, any of its Subsidiaries or any of its Affiliates) in all or any part of its Loans or in any other Credit Document Obligations.  The holder of any such participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that would (i) extend the final scheduled 

 

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maturity of any Loan or Promissory Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default shall not constitute a change in the terms of such participation, and that an increase in any Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof) or (ii) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement.   Company agrees that each participant shall be entitled to the benefits of Sections 2.19 and 2.20 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (c) of this Section; provided, (i) a participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with the Company’s prior written consent and (ii) a participant shall not be entitled to the benefits of Section 2.20 unless Company is notified of the participation sold to such participant and such participant agrees, for the benefit of Company, to comply with Section 2.20 as though it were a Lender.  To the extent permitted by law, each participant also shall be entitled to the benefits of Section 11.4 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17 as though it were a Lender.

 

(h)                 Certain Other Assignments.  In addition to any other assignment permitted pursuant to this Section 11.6, any Lender may, without the consent of Company or Administrative Agent, assign and/or pledge all or any portion of its Loans, the other Credit Document Obligations owed by or to such Lender, and its Promissory Note, if any, to secure obligations of such Lender including, without limitation, any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any operating circular issued by such Federal Reserve Bank or any pledge or assignment to any holders of obligations owed, or securities issued, by such Lender as collateral security for such obligations or securities, or to any trustee for, or any other representative of, such holders; provided, no Lender, as between Company and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided  further, in no event shall the applicable Federal Reserve Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder, until such time as such Federal Reserve Bank, pledge or trustee has complied with the provisions of this Section 11.6 regarding assignments.

 

(i)                     Participant Register. Each Lender that grants a participation pursuant to Section 11.6(g) shall maintain a register as an agent of the Company on which it enters the name and address of each Participant and the principal and interest amount of each Participant’s interest in such Lender’s Loans or any other Credit Document Obligations (the “Participant Register”).  The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each person whose 

 

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name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

11.7.                     [INTENTIONALLY OMITTED].

 

11.8.                     Independence of Covenants.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

 

11.9.                     Survival of Representations, Warranties and Agreements.  All representations, warranties and agreements made herein shall survive the execution and delivery hereof.  Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in Sections 2.19, 2.20, 11.2, 11.3 and 11.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the Loans and the reimbursement of any amounts drawn thereunder, and the termination hereof.

 

11.10.   No Waiver; Remedies Cumulative.  No failure or delay on the part of Administrative Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege.  The rights, powers and remedies given to Administrative Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents.  Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

 

11.11.   Marshalling; Payments Set Aside.  Neither Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Credit Document Obligations.  To the extent that any Credit Party makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or Administrative Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

 

11.12.   Severability.  In case any provision in or obligation hereunder or under any Promissory Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, 

 

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legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

11.13.   Obligations Several; Independent Nature of Lenders’ Rights. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations of any other Lender hereunder.  Nothing contained herein or in any other Credit Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled to protect and enforce its rights arising out hereof and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

 

11.14.   Headings.  Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

 

11.15.   APPLICABLE LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATION LAWS).

 

11.16.   CONSENT TO JURISDICTION.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 11.1; (iv) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE  CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (v) AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

 

11.17.   WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR 

 

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UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 11.17 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

11.18.   Confidentiality.  Each Lender and Advisor shall hold all non-public information regarding Company and its Subsidiaries and their businesses identified as such by Company and obtained by such Lender or Advisor pursuant to the requirements hereof  in accordance with such Lender’s or Advisor’s customary procedures for handling confidential information of  such nature, it being understood and agreed by Company that, in any event, a Lender or Advisor may make (i) disclosures of such information to Affiliates of such Lender and to their agents, employees, officers, directors, trustees, attorneys, accountants and advisors (and to other persons authorized by a Lender or Administrative Agent to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 11.18), (ii) disclosures of such information reasonably required by any bona fide or potential assignee, transferee, pledgee or participant in connection with the contemplated assignment, transfer or participation by such Lender of any Loans or any participations therein (provided, such assignees, transferees, participants, counterparties and advisors are advised of and agree to be bound by the provisions of this Section 11.18), (iii) disclosure to any rating agency when required by it; provided that, prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information relating to the Credit Parties received by it from Administrative Agent or any Lender, and (iv) disclosures required or requested by any governmental agency or representative thereof or by the NAIC or pursuant to legal or judicial process; provided, unless specifically prohibited by applicable law or court order, each Lender shall make reasonable efforts to notify Company of any request by any governmental agency or representative thereof (other than any such request in connection with 

 

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any examination of the financial condition or other routine examination of such Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information.  Notwithstanding anything to the contrary set forth herein, each party (and each of their respective employees, representatives or other agents) may disclose to any and all persons, without limitations of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions and other tax analyses) that are provided to any such party relating to such tax treatment and tax structure.  However, any information relating to the tax treatment or tax structure shall remain subject to the confidentiality provisions hereof (and the foregoing sentence shall not apply) to the extent reasonably necessary to enable the parties hereto, their respective Affiliates, and their and their respective Affiliates’ directors and employees to comply with applicable securities laws.  For this purpose, “tax structure” means any facts relevant to the federal income tax treatment of the transactions contemplated by this Agreement but does not include information relating to the identity of any of the parties hereto or any of their respective Affiliates.  In the event of any conflict between this Section 11.18 and any other Contractual Obligation entered into with any Credit Party, the terms of this Section 11.18 shall govern.  Nothing contained in this Section 11.18 shall limit any obligation which any Lender or Advisor has separately undertaken in any confidentiality agreement with the Company.

 

11.19.   Usury Savings Clause.  Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Credit Document Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate.  If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect.  In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, Company shall pay to Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect.  Notwithstanding the foregoing, it is the intention of Lenders and Company to conform strictly to any applicable usury laws.  Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding amount of the Loans made hereunder or be refunded to Company.

 

11.20.   Changes to First Lien Facility Prior to Closing Date.  If any changes are made to the First Lien Facility’s description of notes attached hereto as Exhibit 11.20 (other than changes in respect of collateral, the amount of notes issued or the interest rate and fees charged) prior to the Closing Date that are favorable to the holders of notes under such First Lien Facility, correlative changes shall, at the election of the Requisite Lenders, be made to this Agreement by the Administrative Agent without any action by or required consent of the Credit Parties or the Lenders.

 

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11.21.   Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

11.22.   Effectiveness.  This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Company and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof.

 

11.23.   Patriot Act.  Each Lender and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Company that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies Company, which information includes the name and address of Company and other information that will allow such Lender or Administrative Agent, as applicable, to identify Company in accordance with the Act.

 

11.24.   Electronic Transmissions.

 

(a)                  Authorization.  Subject to the provisions of Section 11.1, Administrative Agent, Company, Lender and each of their affiliates and sub-agent and each of their respective employees, agents, officers and directors is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Credit Document and the transactions contemplated therein.  Each Credit Party, Administrative Agent and each Lender hereby acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.

 

(b)                 Signatures.  Without limiting the generality of the foregoing, (i)(A) no posting to any E-System shall be denied legal effect merely because it is made electronically, (B) each E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a “signature” and (C) each such posting shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to any Credit Document, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which each Secured Party and Credit Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any 

 

117











 

applicable Requirement of Law requiring certain documents to be in writing or signed; provided, however, that nothing herein shall limit such party’s or beneficiary’s right to contest whether any posting to any E-System or E-Signature has been altered after transmission.

 

(c)                  Separate Agreements.  All uses of an E-System shall be governed by and subject to, in addition to this Agreement, separate terms and conditions posted or referenced in such E-System and related Contractual Obligations executed by Persons in connection with the use of such E-System.

 

(d)                 LIMITATION OF LIABILITY.  ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”.  NEITHER ADMINISTRATIVE AGENT NOR ANY OF ITS SUB-AGENTS, AFFILIATES AND NONE OF THEIR RESPECTIVE EMPLOYEES, AGENTS, DIRECTORS OR OFFICERS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND EACH DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN.  NO WARRANTY OF ANY KIND IS MADE BY ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES, SUB-AGENTS OR ANY OF ITS EMPLOYEES, AGENTS, DIRECTORS OR OFFICERS IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS.   Each Credit Party and each Lender agrees that the Administrative Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.

 

11.25.   Public Disclosures.  Each Credit Party agrees that it shall not, and none of its Affiliates shall, issue any press release or other public disclosure (other than any document filed with any Governmental Authority relating to a public offering of the securities of any Credit Party) using the name, logo or otherwise referring to the Administrative Agent, the Lenders or any of their Affiliates, the Credit Documents or any transaction contemplated therein to which the Administrative Agent or the Lenders are party without at least 2 Business Days’ prior notice to Administrative Agent and without the prior consent of Administrative Agent except to the extent required to do so under applicable Requirements of Law and then, only after consulting with Administrative Agent prior thereto.

 

11.26.   Alternative Transaction Fee and Right of First Refusal.

 

(a)   In the event the Closing Date shall occur but the Company shall, pursuant to Section 2.1, cause the aggregate Loans hereunder to be less than $125 million, then the Company shall pay to the Lenders on the Closing Date, in accordance with their Pro Rata Shares, a fee in an amount equal to 2.0% of the difference between (a) $125.0 million and (b) the principal amount of Loans as of the Closing Date.

 

118











 

(b)   Subject to Section 11.26(c), in the event that prior to May 16, 2011 the Closing Date does not occur and any of Holdings, the Company or the Company’s Subsidiaries has entered into an Alternative Transaction, the Company shall, on the date that it enters into the Alternative Transaction, pay to the Initial Lenders their Pro Rata Share of a fee equal to $2.5 million (the “Alternative Transaction Fee”); provided that any Initial Lender that is in breach of its obligations to fund Loans on the Closing Date shall not be entitled to receive its Pro Rata Share of the Alternative Transaction Fee, which shall be retained by Company.  The Company’s payment of the Alternative Transaction Fee shall not relieve the Company of its separate obligations under clause (c) of this Section 11.26.

 

(c)                  So long as a Lender has not has not breached its obligations to fund Loans on the Closing Date under the Agreement, at least five (5) Business Days prior to entering into an Alternative Transaction, the Company shall notify (an “Alternative Transaction Notification”) such Lender of its intention to enter into an Alternative Transaction and shall provide such Lender with the definitive documentation to be executed in connection with such Alternative Transaction.  Each Lender shall have the right (but not the obligation) to participate as a lender or purchaser in such Alternative Transaction in an amount of up to sum of (x) its Pro Rata Share of the Maximum Available Amount and (y) the portion of the Maximum Available Amount allocable to other Lenders pursuant to the formula set forth in the foregoing clause (x) that has been declined by such other Lenders subject, in each case, to a total aggregate funding cap on the Lenders of $125.0 million, by notifying the Company within two (2) Business Days of receiving an Alternative Transaction Notification of its desired participation in the Alternative Transaction.  If a Lender elects to participate in an Alternative Transaction, no Alternative Transaction Fee shall be due and payable to such Lender; provided, that if such participation is in a principal amount less than its Pro Rata Share of $125.0 million, then the Alternative Transaction Fee shall be payable in an amount equal to 2.0% multiplied by the difference between its Pro Rata Share of $125.0 million and the principal amount of such Lender’s participation in the Alternative Transaction.  If any Lender declines to participate in an Alternative Transaction, the Alternative Transaction Fee shall be due and payable on the terms set forth in Section 11.26(b) to such Lender. For the avoidance of doubt, the provisions of this Section 11.26(c) shall terminate and be of no further force and effect if the Closing Date occurs.

 

11.27.   Effectiveness of Agreement.  The provisions and terms of this Agreement shall be in full force and effect from the date of execution of this Agreement.  For the avoidance of doubt, until the occurrence of the Closing Date, (i) none of the representations and warranties set forth in Article IV shall be made or deemed; and (ii) none of the affirmative and negative covenants set forth in Article V or Article VI shall apply to any Credit Party.

 

[Remainder of page intentionally left blank]

 

119









 

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

 

	
 
    	
Company:
    
	
 
    	
 
    
	
 
    	
EURAMAX INTERNATIONAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Scott Vansant
    
	
 
    	
 
    	
Name:
    	
R. Scott Vansant
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Holdings:
    
	
 
    	
 
    
	
 
    	
EURAMAX HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Scott Vansant
    
	
 
    	
 
    	
Name:
    	
R. Scott Vansant
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    


 











 

	
 
    	
Subsidiaries:
    
	
 
    	
 
    
	
 
    	
AMERIMAX BUILDING PRODUCTS, INC.
    
	
 
    	
AMERIMAX FABRICATED PRODUCTS, INC.
    
	
 
    	
AMERIMAX HOME PRODUCTS, INC.
    
	
 
    	
AMERIMAX RICHMOND COMPANY
    
	
 
    	
FABRAL HOLDINGS, INC.
    
	
 
    	
FABRAL, INC.
    
	
 
    	
AMP COMMERCIAL, INC.
    
	
 
    	
BERGER BUILDING PRODUCTS, INC.
    
	
 
    	
BERGER HOLDINGS, LTD.
    
	
 
    	
AMERIMAX UK, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Scott Vansant
    
	
 
    	
 
    	
Name:
    	
R. Scott Vansant
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AMERIMAX FINANCE COMPANY, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mitchell B. Lewis
    
	
 
    	
 
    	
Name:
    	
Mitchell B. Lewis
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    


 











 

	
 
    	
ARMSTRONG LOAN FUNDING, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc., Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BRENTWOOD CLO LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LOAN FUNDING IV LLC.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
 
    	
EASTLAND CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GLENEAGLES CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GRAYSON CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
 
    	
GREENBRIAR CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HIGHLAND CREDIT OPPORTUNITIES CDO LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
 
    	
JASPER CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIBERTY CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LONGHORN CREDIT FUNDING, LLC
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
 
    	
RED RIVER CLO LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROCKWALL CDO LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
STRATFORD CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
 
    	
TUNSTALL SPECIAL SITUATIONS MASTER FUND, L.P.
    
	
 
    	
By: Tunstall GP, LLC,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LOAN FUNDING VII LLC
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Manager
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WESTCHESTER CLO, LTD.
    
	
 
    	
By: Highland Capital Management, L.P.,
    
	
 
    	
As Collateral Servicer
    
	
 
    	
By: Strand Advisors, Inc.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James D. Dondero
    
	
 
    	
 
    	
Name:
    	
James D. Dondero
    
	
 
    	
 
    	
Title:
    	
President, Strand Advisors, Inc., General Partner of Highland Capital   Management, L.P.
    


 











 

	
LEVINE LEICHTMAN MANAGED FUNDS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LEVINE LEICHTMAN CAPITAL PARTNERS DEEP VALUE   FUND, L.P.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CAL FUND CLO INVESTMENT 2008-1, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TC CAPITAL PARTNERS, L.P.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    


 









 

APPENDIX A

TO CREDIT AND GUARANTY AGREEMENT

 

Notice Addresses

 

THE COMPANY AND THE GUARANTORS:

 

Euramax International, Inc. and each Guarantor

 

5445 Triangle Parkway,

Norcross, GA 30092

Suite 350

Attention: R. Scott Vansant

 

PRINCIPAL OFFICE OF THE ADMINISTRATIVE AGENT:

 

To be provided on or prior to the Closing Date.

 

LENDERS:

 

Highland Capital Management, L.P.

 

13455 Noel Road

Suite 800

Dallas, TX 75240

Attention: Jake Tomlin

 

Levine Leichtman Capital Partners

 

335 N. Maple Drive

Suite 130

Beverly Hills, CA 90210

Attention: Brian Stewart

 











 

SCHEDULE 1

 

Commitments(1)

 

	
Initial Lender
    	
 
    	
Commitment
    
	
 
    	
 
    	
 
    
	
Highland Capital managed   funds (it being understood and agreed that Highland Credit Opportunities CDO   Ltd. shall have no obligation to advance Dollars on the Closing Date)
    	
 
    	
$
    	
77.42 million
    
	
 
    	
 
    	
 
    
	
Levine Leichtman managed funds
    	
 
    	
$
    	
45.08 million
    


 




(1)          To be designated among affiliated investments funds at the discretion of the Initial Lender.

 











 

SCHEDULE 2.1(c)

 

Loans

 

	
Name of Lender
    	
 
    	
Loans
    	
 
    
	
Armstrong Loan Funding   Ltd
    	
 
    	
$
    	
3,626,613.46
    	
 
    
	
Brentwood CLO Ltd
    	
 
    	
$
    	
1,015,565.84
    	
 
    
	
Cal Fund CLO Investment   2008-1, LLC
    	
 
    	
$
    	
3,000,000.00
    	
 
    
	
Eastland CLO Ltd
    	
 
    	
$
    	
1,020,747.28
    	
 
    
	
Gleneagles CLO Ltd
    	
 
    	
$
    	
1,018,149.95
    	
 
    
	
Grayson CLO Ltd
    	
 
    	
$
    	
4,546,892.52
    	
 
    
	
Greenbriar CLO Ltd
    	
 
    	
$
    	
4,257,126.09
    	
 
    
	
Highland Credit   Opportunities CDO Ltd
    	
 
    	
$
    	
28,584,546.26
    	
 
    
	
Jasper CLO Ltd
    	
 
    	
$
    	
4,472,786.77
    	
 
    
	
Levine Leichtman Capital   Partners Deep Value Fund, L.P.
    	
 
    	
$
    	
41,000,000.00
    	
 
    
	
Liberty CLO Ltd
    	
 
    	
$
    	
6,361,089.56
    	
 
    
	
Loan Funding IV LLC
    	
 
    	
$
    	
1,020,747.28
    	
 
    
	
Loan Funding VII LLC
    	
 
    	
$
    	
1,018,149.97
    	
 
    
	
Longhorn Credit Funding   LLC
    	
 
    	
$
    	
4,771,786.39
    	
 
    
	
Red River CLO Ltd
    	
 
    	
$
    	
6,404,266.66
    	
 
    
	
Rockwall CDO Ltd
    	
 
    	
$
    	
5,472,883.88
    	
 
    
	
Stratford CLO Ltd
    	
 
    	
$
    	
1,023,357.91
    	
 
    
	
TC Capital Partners,   L.P.
    	
 
    	
$
    	
2,000,000.00
    	
 
    
	
Tunstall Special   Situations Master Fund, L.P.
    	
 
    	
$
    	
3,364,542.90
    	
 
    
	
Westchester CLO Ltd
    	
 
    	
$
    	
1,020,747.28
    	
 
    


 











 

SCHEDULE 3.1(c)

 

Organizational Structure

 

Post-Transaction Structure

Simplified post-restructure legal structure (with significant debt reflected)

 



 











 

SCHEDULE 4.2

 

Capital Stock and Ownership

 

None.

 











 

SCHEDULE 4.5

 

Governmental Consents

 

None.

 











 

EXHIBIT 11.20

 

Description of Notes

 

[See attached.]

 









 

DESCRIPTION OF NOTES

 

You can find the definitions of certain terms used in this description under “—Certain Definitions.” Certain defined terms used in this description but not defined below under the caption “—Certain Definitions” have the meanings assigned to them in the indenture and the Intercreditor Agreements. In this description, the term “Issuer” refers only to Euramax International, Inc., a Delaware corporation, and not to any of its subsidiaries.

 

The Issuer will issue the notes offered hereby (the “notes”) under an indenture (the “indenture”) among the Issuer, the Guarantors and Wells Fargo Bank, National Association, as trustee and collateral trustee, in a private transaction that is not subject to the registration requirements of the Securities Act of 1933, as amended, which is referred to in this offering memorandum as the Securities Act. See “Notice to Investors.” The terms of the notes include those stated in the indenture and, following the registration of the notes under the Securities Act pursuant to the Registration Rights Agreement, the Trust Indenture Act of 1933, as amended, or the Trust Indenture Act.

 

The following description is a summary of the material provisions of the indenture, the security documents and the Intercreditor Agreements. It does not restate those agreements in their entirety. We urge you to read the indenture, the security documents and the Intercreditor Agreements because they, and not this description, define your rights as a holder of the notes. Anyone who receives this offering memorandum may obtain a copy of the indenture, the security documents and the Intercreditor Agreements from the Issuer without charge upon request.

 

The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders will have rights under the indenture.

 

Brief Description of the Notes and the Note Guarantees

 

The Notes

 

The notes:

 

·                  will be general senior secured obligations of the Issuer;

 

·                  will share, equally and ratably with all obligations of the Issuer under any other Notes Priority Debt, in the benefits of Liens held by the Collateral Trustee on all Collateral from time to time owned by the Issuer, which Liens will be (i) senior to all Liens on the Notes Priority Collateral securing ABL Obligations and Subordinated Lien Obligations, if any, (ii) senior to all Liens on the ABL Priority Collateral securing Subordinated Lien Obligations, if any, and (iii) junior to all Liens on the ABL Priority Collateral securing ABL Obligations, in each case subject to Permitted Liens;

 

·                  will be structurally subordinated to any existing and future Indebtedness and other liabilities of the Issuer’s non-Guarantor Subsidiaries;

 

·                  will be pari passu in right of payment with all existing and future Indebtedness of the Issuer that is not subordinated;

 

·                  will be senior in right of payment to any existing and future subordinated Indebtedness of the Issuer;

 

·                  will be effectively senior to the Senior Unsecured Loan to the extent of the value of the Notes Priority Collateral and the ABL Priority Collateral securing the notes; and

 

120











 

·                  will be guaranteed on a senior secured basis by the Guarantors, as described under the caption “—The Note Guarantees.”

 

As of December 31, 2010, after giving effect to the Refinancing Transaction, the Issuer would have had outstanding:

 

·                  $16.4 million in aggregate principal amount of ABL Debt, with $53.6 million of additional availability;

 

·                  no Notes Priority Debt (other than the notes offered hereby);

 

·                  no Subordinated Lien Debt;

 

·                  $125.0 million in aggregate principal amount of unsecured Indebtedness (consisting solely of the Senior Unsecured Loan);

 

·                  $55.9 million in aggregate principal amount of total liabilities outstanding (including trade payables) at Subsidiaries that are not Guarantors.

 

For the year ended December 31, 2010, the Issuer’s Subsidiaries that are not Guarantors generated 33.9%, 84.7% and 37.4% of the Issuer’s consolidated net sales, consolidated operating income and consolidated Adjusted EBITDA, respectively. As of December 31, 2010, the Issuer’s Subsidiaries that are not Guarantors represented 51% of the Issuer’s consolidated assets.

 

The Note Guarantees

 

The notes will be guaranteed by (i) Euramax Holdings, Inc. (“Parent”), (ii) each of the Issuer’s future Wholly Owned Restricted Subsidiaries (other than any Excluded Subsidiaries) and (iii) any Restricted Subsidiary that guarantees any Indebtedness of the Issuer or a Guarantor or otherwise becomes an obligor under the ABL Credit Facility.

 

Each Note Guarantee of a Guarantor:

 

·                  will be a general senior secured obligation of that Guarantor;

 

·                  will share, equally and ratably with all obligations of that Guarantor under any other Notes Priority Debt, in the benefits of Liens held by the Collateral Trustee on all Collateral from time to time owned by that Guarantor, which Liens will be (i) senior to all Liens on the Notes Priority Collateral securing ABL Obligations and Subordinated Lien Obligations, if any, (ii) senior to all Liens on the ABL Priority Collateral securing Subordinated Lien Obligations, if any, and (iii) junior to all Liens on the ABL Priority Collateral securing ABL Obligations;

 

·                  will be pari passu in right of payment with all existing and future Indebtedness of that Guarantor that is not subordinated;

 

·                  will be effectively senior to all obligations of that Guarantor under the Senior Unsecured Loan to the extent of the value of the Notes Priority Collateral and the ABL Priority Collateral owned by such Guarantor; and

 

·                  will be senior in right of payment to any future subordinated Indebtedness of that Guarantor.

 

As of the date hereof, all of the Issuer’s Wholly Owned Restricted Subsidiaries (other than any Excluded Subsidiaries) will be Guarantors of the notes. However, it is possible that in the future one or more of the Issuer’s Subsidiaries will not guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-Guarantor Subsidiaries, the non-Guarantor Subsidiaries will pay the holders of their debt and their trade creditors before 

 

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they will be able to distribute any of their assets to the Issuer. See “Risk Factors—Risks Related to the Notes and Our Indebtedness—In the event of our bankruptcy, the ability of the holders of the notes to realize upon the collateral will be subject to certain bankruptcy law limitations.”

 

If the Issuer or any of its Restricted Subsidiaries acquires or creates another Wholly Owned Restricted Subsidiary (other than an Excluded Subsidiary) on or after the date of the indenture, such Wholly Owned Restricted Subsidiary must become a Guarantor, execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee. In addition, any Restricted Subsidiary of the Issuer that guarantees, or otherwise becomes an obligor with respect to, any Indebtedness of the Issuer or any Guarantor, including the ABL Credit Facility, must become a Guarantor, execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee.

 

The Note Guarantee of a Guarantor will be released under specified circumstances, including, in connection with a disposition of the Guarantor’s Capital Stock if various conditions are satisfied. See “—Certain Covenants—Guarantees.”

 

As of the date of the indenture, all of the Issuer’s Subsidiaries will be “Restricted Subsidiaries.” However, under the circumstances described below under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” the Issuer will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries.”

 

Any Unrestricted Subsidiaries will not be subject to any of the covenants in the indenture and will not guarantee the notes. The covenants in the indenture applicable to the Issuer and its Restricted Subsidiaries do not apply to Parent and its Subsidiaries (other than the Issuer and its Restricted Subsidiaries).

 

Principal, Maturity and Interest

 

The indenture provides for the issuance by the Issuer of notes with an unlimited principal amount, of which $375.0 million will be issued in this offering. The Issuer may issue additional notes (the “additional notes”) from time to time after this offering. Any offering of additional notes is subject to the covenants described below under the captions “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Certain Covenants—Liens.” The notes and any additional notes subsequently issued under the indenture would be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Additional notes may not be fungible with the notes for U.S. federal income tax purposes. Notes and any additional notes, if any, will be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. The notes will mature on April 1, 2016.

 

Interest on the notes will accrue at the rate of 9.5% per annum and will be payable semiannually in arrears on April 1 and October 1, commencing on October 1, 2011. The Issuer will make each interest payment to the holders of record on the immediately preceding March 15 and September 15, respectively.

 

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.

 

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Methods of Receiving Payments on the Notes

 

If a holder has given wire transfer instructions to the Issuer, the Issuer will pay all principal, interest and premium on that holder’s notes in accordance with those instructions. All other payments on the notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless the Issuer elects to make interest payments by check mailed to the holders at their addresses set forth in the register of holders.

 

Paying Agent and Registrar for the Notes

 

The Trustee will initially act as paying agent and registrar. The Issuer may change the paying agent or registrar without prior notice to the holders, and the Issuer or any of its Subsidiaries may act as paying agent or registrar.

 

Transfer and Exchange

 

A holder may transfer or exchange notes in accordance with the indenture and the procedures described in “Notice to Investors.” The registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a holder to pay any taxes and fees required by law or permitted by the indenture. The Issuer is not required to transfer or exchange any note selected for redemption. Also, the Issuer is not required to transfer or exchange any note (1) for a period of 15 days before a selection of notes to be redeemed or (2) tendered and not withdrawn in connection with a Change of Control Offer or Asset Sale Offer.

 

Security

 

The statements under this section are summaries of the material terms and provisions of the indenture, the Intercreditor Agreements and the other security documents. They do not purport to be complete and are qualified in their entirety by reference to all the provisions in such documents. Therefore, we urge you to read the indenture, the Intercreditor Agreements and the other security documents because they, and not this description, define your rights as holders of the notes.

 

The obligations of the Issuer with respect to the notes, the obligations of the Guarantors under the Note Guarantees, and the obligations of the Issuer and the Guarantors with respect to any other Notes Priority Lien Obligations will be secured by Liens held by the Collateral Trustee on the Collateral. The Liens on the Collateral securing the foregoing obligations will be senior to the Liens on the Collateral securing the Subordinated Lien Obligations, if any. All such Liens will be subject to Permitted Liens. The holders of notes will not possess a first-priority Lien on the ABL Priority Collateral.

 

Security for the Notes

 

General

 

The holders of Notes Priority Obligations will have the benefit of the Collateral, which will consist of and be divided into (i) the Notes Priority Collateral, as to which the holders of Notes Priority Obligations will have first-priority Liens, the holders of Subordinated Lien Obligations (designated as second priority), if any, will have junior priority Liens to the holders of Notes Priority Obligations, the holders of ABL Obligations will have junior- priority Liens to the holders of Notes Priority Obligations and Subordinated Lien Obligations (designated as second-priority), if any, and the holders of Subordinated Lien Obligations (not designated as 

 

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second priority), if any, will have junior-priority Liens to each of the holders of Notes Priority Obligations, ABL Obligations and the Subordinated Lien Obligations (designated as second- priority), in each case subject to Permitted Liens, and (ii) the ABL Priority Collateral, as to which the holders of ABL Obligations will have first-priority Liens, the holders of the Notes Priority Obligations will have junior-priority Liens to the holders of the ABL Obligations and the holders of Subordinated Lien Obligations, if any, will have junior-priority Liens to the holders of the ABL Obligations and the Notes Priority Obligations, in each case subject to Permitted Liens. The General Intercreditor Agreement will govern the priorities of the security interests and certain related creditor rights in the Collateral among the holders of the ABL Obligations, the holders of the Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any.

 

Notes Priority Collateral

 

The Notes Priority Collateral consists of substantially all the assets of the Issuer and the Guarantors, other than the ABL Priority Collateral and Excluded Assets. The Notes Priority Collateral includes but is not limited to: (i) all of the Capital Stock of the Issuer, (ii) all of the Capital Stock held by the Issuer or any Guarantor (other than Capital Stock of any Excluded Subsidiary), (iii) 65% of the voting capital stock and 100% of any non-voting Capital Stock of controlled foreign corporations directly owned by the Issuer or any Guarantor and (iv) substantially all of the tangible and intangible assets of the Issuer and each Guarantor, other than the ABL Priority Collateral and Excluded Assets.

 

The holders of Notes Priority Obligations will have first-priority Liens on the Notes Priority Collateral (subject to certain Permitted Liens). In addition, the Issuer and the Guarantors will grant junior-priority Liens on the Notes Priority Collateral for the holders of the ABL Obligations which initially will consist of the loans outstanding under the ABL Credit Facility, obligations with respect to letters of credit issued under the ABL Credit Facility, certain hedging and cash management obligations and other bank products incurred with the lenders, agents or arrangers party to the ABL Credit Facility or their respective affiliates and other obligations incurred under the ABL Credit Facility. The holders of Subordinated Lien Obligations (designated as second priority), if any, may be given junior-priority Liens on the Notes Priority Collateral, subject to the limitations in the indenture and the ABL Credit Facility, that is junior to the Liens of the holders of the Notes Priority Obligations but senior to the Liens of the holders of ABL Obligations. Except as provided in the General Intercreditor Agreement, holders of such junior Liens will not be able to take any enforcement action with respect to the Notes Priority Collateral so long as any Notes Priority Obligations are outstanding.

 

ABL Priority Collateral

 

The Notes Priority Obligations will also be secured by second-priority Liens on the ABL Priority Collateral (subject to certain Permitted Liens). “ABL Priority Collateral” is defined as (i)(1) all accounts (and all rights to receive payments, indebtedness and other obligations (whether constituting an account, chattel paper, instrument, document or general intangible) which arise as a result of the sale or lease of inventory, goods (excluding equipment) or merchandise or provision of services, including the right to payment of any interest or finance charges) and (2) all promissory notes and other writings evidencing the foregoing obligations, however evidenced and whenever made, (ii) inventory, (iii) payment intangibles (including corporate and other tax refunds), documents of title, customs receipts, insurance, shipping and other documents and other written materials related to any inventory (including to the purchase or import of any inventory), (iv) all letter of credit rights, chattel paper, instruments, 

 

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investment property, documents and general intangibles pertaining to any ABL Priority Collateral, (v) deposit accounts, collection accounts, disbursement accounts, lock-boxes, commodity accounts and securities accounts, including all cash, marketable securities, securities entitlements, financial assets and other funds and assets held in, on deposit in, or credited to any of the foregoing (excluding, in each case, certain cash proceeds of Notes Priority Collateral and the deposit account(s) in which such cash is to be held), (vi) all books and records and “supporting obligations” (as defined in Article 9 of the Uniform Commercial Code) relating to any of the foregoing, (vii) related letters of credit, guaranties, collateral, liens, commercial tort claims or other claims and causes of action, and (viii) to the extent not otherwise included, all substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, investment property, licenses, royalties, income, payments, claims, damages and proceeds of suit but excluding, for the avoidance of doubt, any real estate, equipment, intellectual property and Capital Stock) of any or all of the foregoing, in each case held by the Issuer or any of the Guarantors, other than any assets that would otherwise be included in the ABL Priority Collateral that constitute Excluded Assets. Generally, the second-priority Liens on the ABL Priority Collateral granted to secure the Notes Priority Obligations and the junior-priority Liens on the ABL Priority Collateral granted to secure the Subordinated Lien Obligations, if any, will be terminated and automatically released if the Lien on such ABL Priority Collateral in favor of the ABL Obligations is released.

 

The Issuer and the Guarantors will grant first-priority Liens on the ABL Priority Collateral for the holders of the ABL Obligations, which initially will consist of the loans outstanding under the ABL Credit Facility, obligations with respect to letters of credit issued under the ABL Credit Facility, certain hedging and cash management obligations and other bank products incurred with the lenders, agents or arrangers party to the ABL Credit Facility or their respective affiliates and other obligations incurred under the ABL Credit Facility. The holders of Notes Priority Obligations will have second-priority Liens on the ABL Priority Collateral. The holders of Subordinated Lien Obligations, if any, will be secured by junior-priority Liens on the ABL Priority Collateral that is junior to the Liens of the holders of the ABL Obligations and the Notes Priority Obligations on the ABL Priority Collateral, subject to the limitations in the indenture and the ABL Credit Facility. Except as provided in the General Intercreditor Agreement, holders of such junior liens will not be able to take any enforcement action with respect to the ABL Priority Collateral so long as any ABL Obligations are outstanding and commitments have not been terminated.

 

Excluded Assets

 

Notwithstanding the foregoing, the Collateral will not include (clauses (1) to (13) collectively, the “Excluded Assets”):

 

(1)                                  any intellectual property, lease, license, contract, property rights or agreement to which the Issuer or any Guarantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Issuer or any Guarantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided, however, that the Collateral shall include, and such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the 

 

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extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) above;

 

(2)                                  any assets (other than accounts receivable or inventory) of the Issuer or any Guarantor, subject to certain exceptions, which is subject to or secured by a Capital Lease Obligation or purchase money indebtedness permitted by clause (5) of the definition of “Permitted Debt” so long as the documents governing such Capital Lease Obligation or purchase money indebtedness do not permit other liens on such assets;

 

(3)                                  any of the outstanding voting capital stock of a controlled foreign corporation in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporation entitled to vote; provided that immediately upon the amendment of the United States Internal Revenue Code of 1986, as amended, to allow the pledge of a greater percentage of the voting power of capital stock in a controlled foreign corporation without adverse tax consequences, the Collateral shall include, and the security interest granted by the Issuer and each Guarantor shall attach to, such greater percentage of capital stock of each controlled foreign corporation directly owned by the Issuer or any Guarantor;

 

(4)                                  (i) any property or assets owned by any Excluded Subsidiary (subject to such Excluded Subsidiary otherwise becoming a Guarantor to the extent required by the terms of the indenture) or any Unrestricted Subsidiary and (ii) any property or assets owned by Parent that is not owned by the Issuer or its Restricted Subsidiaries and (iii) any of the outstanding capital stock of any Unrestricted Subsidiary;

 

(5)                                  any Capital Stock and other securities of a Subsidiary to the extent that the pledge of such Capital Stock and other securities results in the Issuer being required to file separate financial statements of such Subsidiary with the Commission, but only to the extent necessary to not be subject to such requirement and only for so long as such requirement is in existence and only with respect to the relevant notes affected. In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the Commission to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the Commission (or any other governmental agency) of separate financial statements of any Subsidiary of the Issuer due to the fact that such Subsidiary’s Capital Stock secures the notes affected thereby, then the Capital Stock of such Subsidiary will automatically be deemed not to be part of the Collateral securing the relevant notes affected thereby but only to the extent necessary to not be subject to such requirement and only for so long as required to not be subject to such requirement. In such event, the Collateral Documents may be amended or modified, without the consent of any holder of such notes, to the extent necessary to release the security interests in favor of such creditor on the shares of Capital Stock that are so deemed to no longer constitute part of the Collateral for the relevant notes. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary’s Capital Stock to secure the notes in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock of such Subsidiary will automatically be deemed to be a part of the Collateral for the relevant notes;

 

(6)                                  any leasehold interests in real property;

 

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(7)                                  any fee-owned real property with a book value of less than $2.5 million;

 

(8)                                  commercial tort claims of less than $10.0 million;

 

(9)                                  pledges and security interests prohibited by, or requiring any consent of any governmental authority pursuant to, law, rule or regulation;

 

(10)                            Equity Interests in any joint venture with a third party that is not an Affiliate, to the extent a pledge of such Equity Interests is prohibited by the documents covering such joint venture;

 

(11)                            (i) deposit or securities accounts the balance of which consists exclusively of (a) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Issuer or any Guarantor to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of the Issuer or its Subsidiaries and (b) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3 102 on behalf of employees of the Issuer or its Subsidiaries, and (ii) all segregated deposit or securities accounts constituting (and the balance of which consists solely of funds set aside in connection with) payroll accounts and trust accounts;

 

(12)                            with respect to perfection only, any item of personal property which constitutes Notes Priority Collateral as to which the Collateral Trustee shall determine in writing in its reasonable discretion after consultation with the Issuer that the costs of perfecting a security interest in such item are excessive in relation to the value of such security being perfected thereby; and

 

(13)                            proceeds and products of any of the foregoing to the extent they constitute Excluded Asset described in clauses (1) through (12).

 

Notwithstanding the foregoing, (i) in the event of the amendment of the United States Internal Revenue Code of 1986, as amended, to allow the pledge in excess of 65% of the voting power of all classes of capital stock of any controlled foreign corporation entitled to vote without adverse tax consequences, the Issuer will use its commercially reasonable efforts to grant a security interest in such Capital Stock, subject to the limitations of paragraph (3) above, and (ii) in the event of any change in facts and circumstances (including but not limited to the modification, amendment or interpretation of Rule 3-16 of Regulation S-X under the Securities Act) that would permit the pledge of all or a portion of the Capital Stock of a Subsidiary formed under the laws of the Netherlands in excess of the amount then pledged without the filing of separate financial statements of such Subsidiary with the SEC (or any other governmental agency), the Issuer will use its commercially reasonable efforts to grant a security interest in such Capital Stock, subject to the limitations of paragraph (5) above.

 

In addition, neither the Issuer nor any of the Guarantors shall be required to perfect the security interest in the following other than by filing of a UCC financing statement: (i) vehicles and other equipment subject to a certificate of title statute, (ii) letter of credit rights, (iii) deposit or security accounts or any other asset or property requiring perfection through control agreement and (iv) fixtures, except to the extent that the same are equipment under the UCC or are related to real property covered by a mortgage in favor of the Collateral Agent. Furthermore, the security interest in certain property or assets which constitute ABL Priority Collateral will not be perfected to the extent that the ABL Collateral Agent determines in writing in its reasonable discretion, and in consultation with the Issuer, that the costs of perfecting such security interest are excessive in relation to the value of the security to be afforded thereby. In addition neither the Issuer nor any of its Subsidiaries shall be required to obtain bailee or landlord waivers, estoppels or collateral access agreements.

 

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Certain security interests in the Collateral may not be granted and/or perfected on the date of the indenture. We do not expect that mortgages on all of our real properties intended to constitute Collateral will be in place at the time of issuance of the notes. We have agreed to deliver mortgages, financing statements, title insurance policies, surveys, certificates and opinions of counsel as shall be reasonably necessary to vest in the Collateral Agent perfected security interests in and mortgage liens on all of our real property intended to constitute Collateral in favor of the Collateral Trustee for the benefit of the secured parties within 90 days of the Issue Date. If such security interests are not perfected within 90 days, we will use commercially reasonable efforts to do so as soon as practicable thereafter. See “Risk Factors—Security interests over certain collateral, in particular the Issuer’s real properties, may not be in place by closing or may not be perfected by closing. Such security interests will be subject to increased risk that they could be avoidable in bankruptcy” and “Risk Factors—With respect to our real property to be mortgaged as security for the notes for which we expect to obtain surveys and title insurance, we do not expect all surveys and title insurance policies will be in place at the time of the issuance of the notes. Any issues that we are not able to resolve in connection with the issuance of such surveys and title policies may impact the value of the collateral. There will be no independent assurance prior to the issuance of the notes, therefore, that all properties contemplated to be mortgaged as security for the notes will be mortgaged, or that we hold the real property interest we represent we hold or that we may mortgage such interests, or that there will be no lien encumbering such real property interests other than those permitted by the indenture.”

 

General Intercreditor Agreement

 

The Issuer, the Guarantors, the Trustee, the Collateral Trustee and the ABL Collateral Agent will enter into the General Intercreditor Agreement to establish the respective lien priorities of the holders of ABL Obligations, the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, in the Collateral, all as set forth above, and their respective rights and obligations with respect to such Collateral. Although the holders of the notes are not party to the General Intercreditor Agreement, by their acceptance of the notes they will agree to be bound thereby and the holders of the notes and other Notes Priority Obligations also specifically authorize the Trustee and the Collateral Trustee to enter into the General Intercreditor Agreement on their behalf and to take all actions provided for under the terms of the General Intercreditor Agreement and the holders of notes and other Notes Priority Obligations will be bound by such actions. Pursuant to the terms of the General Intercreditor Agreement, the Collateral Trustee will determine the time and method by which the security interests in the Notes Priority Collateral will be enforced and the ABL Collateral Agent will determine the time and method by which the security interests in the ABL Priority Collateral will be enforced.

 

The aggregate amount of the obligations secured by the ABL Priority Collateral may, subject to the limitations set forth in the indenture, be increased. All or a portion of the obligations secured by the ABL Priority Collateral consists, or may consist, of indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently re-borrowed and such obligations may, subject to the limitations set forth in the indenture, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the subordination of the Liens held by the holders of Notes Priority Obligations or the provisions of the General Intercreditor Agreement defining the relative rights of the parties thereto. The lien priorities provided for in the General Intercreditor Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, 

 

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restatement or refinancing of either the obligations secured by the ABL Priority Collateral or the obligations secured by the Notes Priority Collateral, by the release of any Collateral or of any guarantees securing any secured obligations or by any action that any representative or secured party may take or fail to take in respect of any Collateral.

 

Maintenance of Collateral

 

The Indenture and/or the security documents will provide that the Issuer will, and will cause each of its Restricted Subsidiaries to (i) at all times maintain, preserve and protect all property material to the conduct of its business and keep such property in good repair, working order and condition (other than wear and tear occurring in the ordinary course of business); (ii) from time to time make, or cause to be made, all necessary and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times; and (iii) keep its insurable property insured at all times by financially sound and reputable insurers.

 

After-Acquired Property

 

Promptly following the acquisition by the Issuer or any Guarantor, the Issuer, or such Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and opinions of counsel as shall be reasonably necessary to vest in the Collateral Trustee a perfected security interest in such After-Acquired Property and to have such After-Acquired Property added to the Collateral and thereupon all provisions of the Indenture relating to the Collateral shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.

 

Further Assurances

 

The Issuer and the Guarantors shall execute any and all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Collateral Trustee may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests and Liens created or intended to be created by the security documents. In addition, from time to time, the Issuer will reasonably promptly secure the obligations under the notes, the Indenture and the security documents by pledging or creating, or causing to be pledged or created, perfected security interests and Liens with respect to the Collateral. Such security interests and Liens will be created under the security documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Collateral Trustee.

 

Sufficiency of Collateral

 

No appraisal of the value of the Collateral has been made in connection with this offering. The Fair Market Value of the Collateral is subject to fluctuations based on factors that include, among others, the ability to sell the Collateral in an orderly sale, general economic conditions, the availability of buyers and similar factors. The amount to be received upon a sale of the Collateral would also be dependent on numerous factors, including, but not limited to, the actual Fair Market Value of the Collateral at such time and the timing and the manner of the sale. By its nature, portions of the Collateral may be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral can be sold in a short period of time or in an orderly manner. In addition, in the event of a bankruptcy, the ability of the holders to realize upon any of the Collateral may be subject to certain bankruptcy law limitations as described below. The Collateral will be pledged pursuant to the security documents, which contain provisions relating to the administration, preservation and disposition of the Collateral. The following is a summary of some of the covenants and provisions set forth in the security documents and the Indenture as they relate to the Collateral.

 

No Action with Respect to the ABL Priority Collateral

 

The General Intercreditor Agreement will provide that the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, may not commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the ABL Priority Collateral under any security document, applicable law or otherwise, at any time when the ABL Priority Collateral is subject to any first-priority security interest and any ABL Obligations remain outstanding or any commitment to extend credit that would constitute such ABL Obligations remains in effect and (ii) only the ABL Collateral Agent shall be entitled to take any such actions or exercise any such remedies. The relative rights of the holders of Notes Priority Obligations in respect of the right to take enforcement actions is described below under the caption—Collateral Trust and Notes Priority Intercreditor Agreement—Enforcement of Liens.”

 

Notwithstanding the preceding paragraph, the Collateral Trustee and the Subordinated Collateral Trustee, if applicable, may:

 

(1)                                  file a claim or statement of interest with respect to the Notes Priority Obligations or Subordinated Lien Obligations, as applicable, in any case or proceeding commenced by or against the Issuer or any Guarantor under the Bankruptcy Code or any similar bankruptcy law for the relief or protection of debtors, any other proceeding of a similar nature for the reorganization, protection, restructuring, compromise or arrangement of any of the assets and/or liabilities of the Issuer or any Guarantor or any similar case or proceeding;

 

(2)                                  take any action (not adverse to the priority status of any of the Liens on the ABL Priority Collateral, or the rights of the ABL Collateral Agent or any holder of ABL Obligations, to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on any of the Collateral;

 

(3)                                  file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, or other pleading objecting to or otherwise seeking the disallowance of the claims of the holders of Notes Priority Obligations or Subordinated Lien Obligations, as applicable, if any, in either case not inconsistent with the terms of the General Intercreditor Agreement;

 

(4)                                  to the extent such holders acknowledge that such holders hold an unsecured claim, file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Issuer or the Guarantors arising under any case or proceeding referred to in clause (1) above, except to the extent inconsistent with the terms of the General Intercreditor Agreement; or

 

(5)                                  vote in favor of or against any plan of reorganization, compromise or arrangement, or file any proof of claim, make other filings and/or make any arguments and motions with respect to the Notes Priority Obligations or Subordinated Lien 

 

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Obligations, as applicable, that in each case, are not inconsistent with the terms of the General Intercreditor Agreement.

 

No Action with Respect to Notes Priority Collateral

 

The General Intercreditor Agreement will provide that the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, may not commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the Notes Priority Collateral under any security document, applicable law or otherwise, at any time when the Notes Priority Collateral is subject to any first-priority security interest and any Notes Priority Obligations remain outstanding or any commitment to extend credit that would constitute such Notes Priority Obligations remains in effect and (ii) only the Collateral Trustee shall be entitled to take any such actions or exercise any such remedies. Notwithstanding the preceding paragraph, the holders of ABL Obligations and the holders of Subordinated Lien Obligations, and the ABL Collateral Agent and the Subordinated Collateral Trustee, if applicable, may:

 

(1)                                  file a claim or statement of interest with respect to the ABL Obligations or the Subordinated Lien Obligations, as applicable, in any case or proceeding commenced by or against the Issuer or any Guarantor under the Bankruptcy Code or any similar bankruptcy law for the relief or protection of debtors, any other proceeding of a similar nature for the reorganization, protection, restructuring, compromise or arrangement of any of the assets and/or liabilities of the Issuer or any Guarantor or any similar case or proceeding;

 

(2)                                  take any action (not adverse to the priority status of any of the Liens on the Notes Priority Collateral, or the rights of the Collateral Trustee or any holder of Notes Priority Obligations, to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on any of the Collateral;

 

(3)                                  file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, or other pleading objecting to or otherwise seeking the disallowance of the claims of the holders of ABL Obligations or the holders of Subordinated Lien Obligations, as applicable, if any, in either case not inconsistent with the terms of the General Intercreditor Agreement;

 

(4)                                  to the extent such holders acknowledge that such holders hold an unsecured claim, file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Issuer or the Guarantors arising under any case or proceeding referred to in clause (1) above, except to the extent inconsistent with the terms of the General Intercreditor Agreement; or

 

(5)                                  vote in favor of or against any plan of reorganization, compromise or arrangement, or file any proof of claim, make other filings and/or make any arguments and motions with respect to the ABL Obligations or the Subordinated Lien Obligations, as applicable, that in each case, are not inconsistent with the terms of the General Intercreditor Agreement.

 

No Duties of ABL Collateral Agent

 

The General Intercreditor Agreement will provide that neither the ABL Collateral Agent nor any holder of any ABL Obligations will have any duties or other obligations to any holder 

 

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of Notes Priority Obligations or any holder of Subordinated Lien Obligations, if any, with respect to the ABL Priority Collateral, other than to transfer to the Collateral Trustee or Subordinated Collateral Trustee, as applicable, any proceeds of any such ABL Priority Collateral in which the Collateral Trustee or Subordinated Collateral Trustee, as applicable, continues to hold a security interest remaining after any sale, transfer or other disposition of such ABL Priority Collateral (in each case, unless the holders’ Lien on all such ABL Priority Collateral is terminated and released prior to or concurrently with such sale, transfer, disposition, payment or satisfaction), the payment and satisfaction in full in cash of such ABL Obligations and the termination of any commitment to extend credit that would constitute such ABL Obligations, or, if the ABL Collateral Agent is in possession of all or any part of such ABL Priority Collateral after such payment and satisfaction in full and termination, such ABL Priority Collateral or any part thereof remaining, in each case without representation or warranty on the part of, or recourse to, the ABL Collateral Agent or any holder of ABL Obligations. In addition, the General Intercreditor Agreement will further provide that, until the ABL Obligations shall have been paid and satisfied in full in cash and any commitment to extend credit that would constitute ABL Obligations secured thereby shall have been terminated, the ABL Collateral Agent will be entitled, for the benefit of the holders of such ABL Obligations, to sell, transfer or otherwise dispose of or deal with such ABL Priority Collateral without regard to any subordinated security interest therein or any rights to which any holder of Notes Priority Obligations or holder of Subordinated Lien Obligations, if any, would otherwise be entitled as a result of such subordinated security interest. Without limiting the foregoing, the Collateral Trustee will agree in the General Intercreditor Agreement and each holder of notes will agree by its acceptance of the notes that neither the ABL Collateral Agent nor any holder of any ABL Obligations secured by any ABL Priority Collateral will have any duty or obligation first to marshal or realize upon the ABL Priority Collateral, or to sell, dispose of or otherwise liquidate all or any portion of the ABL Priority Collateral, in any manner that would maximize the return to the holders of Notes Priority Obligations, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the holders of Notes Priority Obligations from such realization, sale, disposition or liquidation. The General Intercreditor Agreement will have similar provisions regarding the duties owed to the ABL Collateral Agent and the holders of any ABL Obligations and the Subordinated Collateral Trustee and the holders of any Subordinated Lien Obligations, by the Collateral Trustee and the holders of Notes Priority Obligations with respect to the Notes Priority Collateral.

 

The General Intercreditor Agreement will additionally provide that the Collateral Trustee and the Subordinated Collateral Trustee will waive, and each holder of Notes Priority Obligations and each holder of Subordinated Lien Obligations, if any, will waive (including each holder of the notes by its acceptance thereof), any claim that may be had against the ABL Collateral Agent or any holder of any ABL Obligations arising out of (i) any actions which the ABL Collateral Agent or such holder of ABL Obligations take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the ABL Obligations from any account debtor, guarantor or any other party) in accordance with the documents governing any such ABL Obligations or any other agreement related thereto or to the collection of such ABL Obligations or the valuation, use, protection or release of any security for such ABL Obligations, (ii) any election by the ABL Collateral Agent or such holder of ABL Obligations, in any proceeding instituted under Title 11 of the United States Code of the application of Section 1111(b) of the Bankruptcy Code or (iii) any borrowing of, or grant of a security interest or administrative expense priority under 

 

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Section 363 or Section 364 of the Bankruptcy Code to, the Issuer or any of its subsidiaries as debtor-in-possession. The ABL Collateral Agent and holders of ABL Obligations and the Subordinated Collateral Trustee and the holders of Subordinated Lien Obligations, if any, will agree to waive similar claims with respect to the actions of any of the holders of Notes Priority Obligations with respect to Notes Priority Collateral.

 

No Interference; Payment Over; Reinstatement

 

Notwithstanding the foregoing, each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, will agree in the General Intercreditor Agreement that:

 

(1)                                  it will not take, cause to be taken, or support any other Person in taking, any action the purpose or effect of which is, or could be, to make any Lien that the holders of Notes Priority Obligations or the holders of Subordinated Lien Obligations, if any, have on the ABL Priority Collateral pari passu with, or to give the holders of Notes Priority Obligations, or the holders of Subordinated Lien Obligations, if any, any preference or priority relative to any Lien that the holders of any ABL Obligations secured by any ABL Priority Collateral have with respect to such ABL Priority Collateral;

 

(2)                                  it will not contest, challenge or question, or support any other Person in contesting, challenging or questioning, in any proceeding the validity or enforceability of any senior security interest in the ABL Priority Collateral and the related ABL Obligations, the validity, attachment, perfection or priority of any lien held by the holders of any ABL Obligations secured by any ABL Priority Collateral, or the validity or enforceability of the priorities, rights or duties established by or other provisions of the General Intercreditor Agreement;

 

(3)                                  it will not take or cause to be taken, or support any other Person in taking, any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the ABL Priority Collateral by the ABL Collateral Agent or the holders of any ABL Obligations secured by such ABL Priority Collateral;

 

(4)                                  it will have no right to (A) direct the ABL Collateral Agent or any holder of any ABL Obligations to exercise any right, remedy or power with respect to any ABL Priority Collateral or (B) consent to the exercise by the ABL Collateral Agent or any holder of any ABL Obligations of any right, remedy or power with respect to such ABL Priority Collateral;

 

(5)                                  it will not institute, or support any other Person in instituting, any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the ABL Collateral Agent or any holder of any ABL Obligations seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither the ABL Collateral Agent nor any holders of any ABL Obligations will be liable for, any action taken or omitted to be taken by the ABL Collateral Agent or such lenders with respect to such ABL Priority Collateral;

 

(6)                                  it will not seek, and will waive any right, to have any ABL Priority Collateral or any part thereof marshaled upon any foreclosure or other disposition of such ABL Priority Collateral; and

 

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(7)                                  it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of the General Intercreditor Agreement.

 

The ABL Collateral Agent and the Subordinated Collateral Trustee and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will agree to similar limitations with respect to their rights in the Notes Priority Collateral and their ability to bring a suit against the Collateral Trustee or the holders of Notes Priority Obligations with respect to Notes Priority Collateral.

 

Each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, will agree in the General Intercreditor Agreement, that if it obtains possession of the ABL Priority Collateral or realizes any proceeds or payment in respect of the ABL Priority Collateral, pursuant to any security document or by the exercise of any rights available to it under applicable law or in any bankruptcy, insolvency or similar proceeding or through any other exercise of remedies, at any time when any ABL Obligations secured or intended to be secured by such ABL Priority Collateral remain outstanding or any commitment to extend credit that would constitute ABL Obligations secured or intended to be secured by such ABL Priority Collateral remains in effect, then it will segregate and hold such ABL Priority Collateral, proceeds or payment in trust for the ABL Collateral Agent and the holders of any ABL Obligations and promptly transfer such ABL Priority Collateral, proceeds or payment, as the case may be, to the ABL Collateral Agent. Each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, will further agree that if, at any time, all or part of any payment with respect to any ABL Obligations previously made shall be rescinded for any reason whatsoever, it will promptly pay over to the ABL Collateral Agent any payment received by it in respect of any such ABL Priority Collateral and shall promptly turn any such ABL Priority Collateral then held by it over to the ABL Collateral Agent, and the provisions set forth in the General Intercreditor Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such ABL Obligations. The ABL Collateral Agent and the Subordinated Collateral Trustee and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will be subject to similar limitations with respect to the Notes Priority Collateral and any proceeds or payments in respect of any Notes Priority Collateral.

 

Entry upon Premises by ABL Collateral Agent and Holders of ABL Obligations

 

The General Intercreditor Agreement will provide that if the ABL Collateral Agent takes any enforcement action with respect to the ABL Priority Collateral or the Collateral Trustee or Subordinated Collateral Trustee, as applicable, acquires an ownership or possessory interest in any of the Notes Priority Collateral pursuant to the exercise of its rights under the applicable security documents or under applicable law or the Collateral Trustee or Subordinated Collateral Trustee, as applicable, shall, through the exercise of remedies under the applicable security documents or otherwise, sell any of the Notes Priority Collateral to any third party (a “Third Party Purchaser”) as permitted by the terms of the General Intercreditor Agreement, then, subject to the rights of any landlords under real estate leases and to the limitations and restrictions with respect to use of and entry upon the premises as set forth in the applicable collateral access agreements, the holders of Notes Priority Obligations and the 

 

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holders of Subordinated Lien Obligations, if any, will (or, in the case of any such sale to a Third Party Purchaser, shall require as a condition of such sale to the Third Party Purchaser) (i) cooperate with the ABL Collateral Agent in its efforts to enforce its security interest in the ABL Priority Collateral and to finish any work-in-process and assemble the ABL Priority Collateral, (ii) not hinder or restrict in any respect the ABL Collateral Agent from enforcing its security interest in the ABL Priority Collateral or from finishing any work-in-process or assembling the ABL Priority Collateral, and (iii) permit the ABL Collateral Agent, its employees, agents, advisers and representatives, at the sole cost and expense of the Issuer and the Guarantors (or, failing payment thereof by the Issuer and the Guarantors, of the ABL Collateral Agent and the holders of ABL Obligations), to enter upon and use the Notes Priority Collateral (including (x) equipment, processors, computers and other machinery related to the storage or processing of records, documents or files and (y) intellectual property), for a period not to exceed 180 days after the taking of such enforcement action, for purposes of (A) inspecting, removing or enforcing the ABL Collateral Agent’s rights in the ABL Priority Collateral, (B) assembling and storing the ABL Priority Collateral and completing the processing of and turning into finished goods of any ABL Priority Collateral consisting of work-in-process or raw materials, (C) selling any or all of the ABL Priority Collateral located on such Notes Priority Collateral, whether in bulk, in lots or to customers in the ordinary course of business or otherwise, (D) removing any or all of the ABL Priority Collateral located on such Notes Priority Collateral, (E) using any of the Collateral under the control or possession of the Collateral Trustee or the Subordinated Collateral Trustee consisting of computers or other data processing equipment related to the storage or processing of records, documents or files pertaining to the ABL Priority Collateral and using any Collateral under such control or possession consisting of other equipment to handle or dispose of any ABL Priority Collateral or (F) taking reasonable actions to protect, secure, and otherwise enforce the rights of the ABL Collateral Agent and the holders of ABL Obligations in and to the ABL Priority Collateral; provided, however, that nothing contained in the General Intercreditor Agreement will restrict the rights of the Collateral Trustee or the Subordinated Collateral Trustee, as applicable, from selling, assigning or otherwise transferring any Notes Priority Collateral prior to the expiration of such 180-day period if the purchaser, assignee or transferee thereof agrees to be bound by the applicable provisions of the General Intercreditor Agreement. If any stay or other order prohibiting the exercise of remedies with respect to the ABL Priority Collateral has been entered by a court of competent jurisdiction or is in effect due to an Insolvency or Liquidation Proceeding, such 180-day period shall be tolled during the pendency of any such stay or other order. If the ABL Collateral Agent conducts a public auction or private sale of the ABL Priority Collateral at any of the real property included within the Notes Priority Collateral, the ABL Collateral Agent shall provide the Collateral Trustee and the Subordinated Collateral Trustee, as applicable, with reasonable notice and use reasonable efforts to hold such auction or sale in a manner which would not unduly disrupt the Collateral Trustee’s or the Subordinated Collateral Trustee’s, as applicable, use of such real property.

 

The General Intercreditor Agreement will also provide that each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, irrevocably grants the ABL Collateral Agent a non-exclusive worldwide license to or right to use, to the extent permitted by law and any applicable contractual obligations binding on the Notes Priority Collateral, and solely to the extent the Collateral Trustee or the Subordinated Collateral Trustee has an ownership interest therein or other assignable right of use thereto, exercisable without payment of royalty or other compensation, any of the intellectual property now or hereafter owned by, licensed to, or otherwise used by the Issuer or its Subsidiaries in order for the ABL Collateral Agent and the holders of ABL Obligations to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute or otherwise dispose of any inventory included in the ABL Priority Collateral in connection with the liquidation, disposition, foreclosure or realization upon the inventory included in the ABL Priority Collateral in accordance with the terms of the ABL Documents. The Collateral Trustee and the Subordinated Collateral Trustee will agree that any of the intellectual property constituting Notes Priority Collateral that is sold, transferred or otherwise disposed of (whether pursuant to enforcement action or otherwise) will be subject to rights of the ABL Collateral Agent as described above.

 

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During the period of actual occupation, use or control by the ABL Collateral Agent or the holders of ABL Obligations or their agents or representatives of any Notes Priority Collateral, the ABL Collateral Agent and the holders of ABL Obligations will (i) be responsible for the ordinary course third-party expenses related thereto, including costs with respect to heat, light, electricity, water and real property taxes with respect to that portion of any premises so used or occupied, in each case to the extent not paid for by the Issuer or any of its Subsidiaries, and (ii) be obligated to repair at their expense any physical damage to such Notes Priority Collateral or other assets or property resulting from such occupancy, use or control, and to leave such Notes Priority Collateral or other assets or property in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted, in each case to the extent not paid for by the Issuer or any of its Subsidiaries. The ABL Collateral Agent and the holders of ABL Obligations shall agree to pay, indemnify and hold the Collateral Trustee and the Subordinated Collateral Trustee and the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, harmless from and against any third-party liability resulting from the gross negligence or willful misconduct of the ABL Collateral Agent, the holders of ABL Obligations or any of their agents, representatives or invitees (as determined by a court of competent jurisdiction in a final and non-appealable decision) in its or their operation of such facilities, in each case to the extent not paid for by the Issuer or any of its Subsidiaries. Notwithstanding the foregoing, in no event shall the ABL Collateral Agent or the holders of ABL Obligations have any liability to the holders of Notes Priority Obligations or the holders of Subordinated Lien Obligations, if any, pursuant to the General Intercreditor Agreement as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Notes Priority Collateral existing prior to the date of the exercise by the ABL Collateral Agent or the holders of ABL Obligations of their rights under the General Intercreditor Agreement and the ABL Collateral Agent and the holders of ABL Obligations will not have any duty or liability to maintain the Notes Priority Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by them, or for any damage to or diminution in the value of the Notes Priority Collateral that results solely from removal of any ABL Priority Collateral from the premises or the ordinary wear and tear resulting from the use of the Notes Priority Collateral by such persons in the manner and for the time periods specified under the General Intercreditor Agreement.

 

Agreements with Respect to Bankruptcy or Insolvency Proceedings

 

If the Issuer or any of the Guarantors becomes subject to a case under the Bankruptcy Code and, as debtor(s)-in-possession, moves for approval of DIP Financing to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or the use of cash collateral under Section 363 of the Bankruptcy Code, each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, will agree in the General Intercreditor Agreement, that it will raise no objection to any such financing or to the Liens on the ABL Priority Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes ABL Priority Collateral, unless the ABL Collateral Agent or the holders of any ABL Obligations secured by such ABL Priority Collateral oppose or object to such DIP Financing or such DIP Financing Liens or use of such cash collateral (and, to the extent that such DIP Financing Liens are senior to, or rank pari passu with, the Liens of such ABL Obligations in such ABL Priority Collateral, then each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of 

 

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the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, subordinate the Liens of the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, in such ABL Priority Collateral to the liens of the ABL Obligations in such ABL Priority Collateral and the DIP Financing Liens), so long as the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, retain Liens on all the Notes Priority Collateral to the extent permitted by applicable law, including proceeds thereof arising after the commencement of such proceeding, with the same priority relative to the Lien securing the ABL Obligations as existed prior to the commencement of the case under the Bankruptcy Code. The ABL Collateral Agent and the Subordinated Collateral Trustee, and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will agree to similar provisions with respect to any DIP Financing on the Notes Priority Collateral; provided, that no Liens on any category of assets constituting ABL Priority Collateral arising post-petition are subject to a Lien as part of such DIP Financing on the Notes Priority Collateral.

 

Subject to limited exceptions, the Collateral Trustee and the Subordinated Collateral Trustee will agree in the General Intercreditor Agreement (and each holder of notes will agree by its acceptance of the notes) that each will not object to or oppose a sale or other disposition of any ABL Priority Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the ABL Collateral Agent and the holders of ABL Obligations shall have consented to such sale or disposition of such ABL Priority Collateral. The ABL Collateral Agent and the Subordinated Collateral Trustee, and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will agree to similar limitations with respect to their right to object to such a sale of Notes Priority Collateral.

 

The General Intercreditor Agreement will provide that each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, may seek adequate protection of its interest in the ABL Priority Collateral in the form of replacement Liens on post-petition collateral of the same type so long as the holders of the ABL Obligations have been granted such replacement Liens on such ABL Priority Collateral, and agrees that it shall not contest or support any other Person contesting any request for such Liens. Each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, may seek adequate protection of its junior Liens in ABL Priority Collateral, subject to the provisions of the General Intercreditor Agreement; provided, that if (A) the ABL Collateral Agent is granted adequate protection in the form of a replacement Lien on post-petition collateral of the same type as the ABL Priority Collateral, and (B) such adequate protection requested by the Collateral Trustee or the Subordinated Collateral Trustee, as applicable, is in the form of a replacement Lien on such post-petition collateral of the same type as the ABL Priority Collateral, such Lien, if granted, will be subordinated to the adequate protection Liens granted in favor of the ABL Collateral Agent on such post-petition collateral, and, if applicable, the Liens securing any DIP Financing (and all obligations relating thereto) secured by such ABL Priority Collateral and provided by the ABL Collateral Agent or one or more lenders under the ABL Credit Facility on the same basis as the Liens of the Collateral Trustee or the Subordinated Collateral Trustee, as applicable, on such ABL Priority Collateral are subordinated to the Liens of the ABL Collateral Agent on such ABL Priority Collateral under 

 

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the General Intercreditor Agreement. In the event that the Collateral Trustee, for itself and on behalf of the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, as applicable, seeks or requests (or is otherwise granted) adequate protection of its Liens in the ABL Priority Collateral in the form of a replacement Lien on post-petition assets of the same type as such ABL Priority Collateral, then the Collateral Trustee, for itself and on behalf of the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, as applicable, agrees that the ABL Collateral Agent shall also be granted a replacement Liens on such post-petition assets as adequate protection of its Liens in the ABL Priority Collateral and that the Collateral Trustee’s or the Subordinated Collateral Trustee’s replacement Liens shall be subordinated to the replacement Liens of the ABL Collateral Agent. The ABL Collateral Agent and the Subordinated Collateral Trustee, and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will agree to similar provisions with respect to any adequate protection in respect of the Notes Priority Collateral.

 

Each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of the Subordinated Lien Obligations, if any, agrees that it shall not (i) seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of any ABL Priority Collateral without the prior written consent of the ABL Collateral Agent, or (ii) oppose any request by the ABL Collateral Agent or any holder of ABL Obligations to seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the ABL Priority Collateral. The ABL Collateral Agent and the Subordinated Collateral Trustee, and the holders of ABL Obligations and the holders of Subordinated Lien Obligations, if any, will agree to similar provisions in respect of the Notes Priority Collateral.

 

Insurance

 

Unless and until written notice by the ABL Collateral Agent to the Collateral Trustee and the Subordinated Collateral Trustee that the ABL Obligations have been paid and discharged in full in cash and all commitments to extend credit under the ABL Credit Facility shall have been terminated, as between the ABL Collateral Agent, on the one hand, and the Collateral Trustee and the Subordinated Collateral Trustee, on the other hand, only the ABL Collateral Agent will have the right (subject to the rights of the grantors under the security documents related to the ABL Obligations, the security documents related to the Notes Priority Obligations and the security documents related to the Subordinated Lien Obligations, if any) to adjust or settle any insurance policy or claim covering or constituting ABL Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the ABL Priority Collateral. Unless and until written notice by the Collateral Trustee to the ABL Collateral Agent and the Subordinated Collateral Trustee, if any, that the Notes Priority Obligations have been paid and discharged in full in cash, as between the ABL Collateral Agent and the Subordinated Collateral Trustee, if any, on the one hand, and the Collateral Trustee, on the other hand, only the Collateral Trustee will have the right (subject to the rights of the grantors under the applicable security documents) to adjust or settle any insurance policy covering or constituting Notes Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding solely affecting the Notes Priority Collateral. To the extent 

 

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that an insured loss covers or constitutes both ABL Priority Collateral and Notes Priority Collateral, then the ABL Collateral Agent and the Collateral Trustee will work jointly and in good faith to collect, adjust or settle (subject to the rights of the grantors under the applicable security documents) under the relevant insurance policy.

 

Refinancings of the ABL Obligations, the Notes Priority Obligations and the Subordinated Lien Obligations, if Any

 

The ABL Obligations, the Notes Priority Obligations and the Subordinated Lien Obligations, if any, may be increased, refinanced or replaced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under the applicable ABL Document, Notes Priority Document or Subordinated Lien Document) of the ABL Collateral Agent or any holder of ABL Obligations, the Collateral Trustee or any holder of Notes Priority Obligations, or the Subordinated Collateral Trustee or any holder of Subordinated Lien Obligations, if any, all without affecting the Lien priorities provided for in the General Intercreditor Agreement; provided, however, that the holders of any such refinancing, replacement or additional indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of the General Intercreditor Agreement pursuant to such documents or agreements (including amendments or supplements to the General Intercreditor Agreement) as the ABL Collateral Agent, the Collateral Trustee or the Subordinated Collateral Trustee, as the case may be, shall reasonably request and in form and substance reasonably acceptable to the ABL Collateral Agent, Collateral Trustee or the Subordinated Collateral Trustee, as the case may be (and provided further, however, that such amendments, supplements, modifications and waivers are not adverse to the ABL Collateral Agent, the Trustee, the Collateral Trustee, the Subordinated Trustee or the Subordinated Collateral Trustee).

 

In connection with any increase, refinancing or replacement contemplated by the foregoing paragraph, the General Intercreditor Agreement may be amended at the request and sole expense of the Issuer, and without the consent of either the ABL Collateral Agent, the Collateral Trustee or the Subordinated Collateral Trustee, (a) to add parties (or any authorized agent or trustee therefor) providing any such refinancing or replacement indebtedness, (b) to establish that Liens on any Notes Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any Notes Priority Collateral securing the indebtedness being refinanced or replaced and (c) to establish that the Liens on any ABL Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any ABL Priority Collateral securing the indebtedness being refinanced or replaced, all on the terms provided for herein immediately prior to such refinancing or replacement.

 

Use of Proceeds of ABL Priority Collateral

 

After the satisfaction in full in cash of all obligations under any ABL Obligations and the termination of all commitments to extend credit that would constitute ABL Obligations, the Collateral Trustee and the Subordinated Collateral Trustee, as applicable, in accordance with and pursuant to the terms of the General Intercreditor Agreement, will distribute all cash proceeds (after payment of the costs of enforcement and collateral administration, including any amounts owed to the Collateral Trustee) of the ABL Priority Collateral received by it under the applicable security documents, for the ratable benefit of the holders of Notes Priority Obligations and the holders of Subordinated Lien Obligations, if any, as applicable.

 

Subject to the terms of the applicable security documents, the Issuer and the Guarantors will have the right to remain in possession and retain exclusive control of the Collateral 

 

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securing the Notes Priority Obligations and the Subordinated Lien Obligations, if any (other than any cash, securities, obligations and cash equivalents constituting part of the Collateral and deposited with the Collateral Trustee, the Subordinated Collateral Trustee or the ABL Collateral Agent in accordance with the provisions of the applicable security documents and other than as set forth in the applicable security documents), to freely operate the Collateral and to collect, invest and dispose of any income therefrom.

 

Release of ABL Collateral

 

The General Intercreditor Agreement will provide that, if in connection with any sale, lease, exchange, transfer or other disposition of any ABL Priority Collateral permitted under the terms of the ABL Documents and not expressly prohibited under the terms of the Notes Priority Documents or the Subordinated Lien Documents, if any (other than in connection with the exercise of the ABL Collateral Agent’s remedies in respect of the ABL Priority Collateral), the ABL Collateral Agent, for itself or on behalf of any holder of ABL Obligations, releases any of its Liens on any part of the ABL Priority Collateral, or releases any Guarantor from its obligations under its guaranty (in each case other than in connection with the discharge of all ABL Obligations and after the occurrence and during the continuance of any “event of default” under a Notes Priority Document or Subordinated Lien Document, if any) then the Liens, if any, of each of the Collateral Trustee, for itself and on behalf of the Trustee and the holders of Notes Priority Obligations (and each holder of notes will agree by its acceptance of the notes), and the Subordinated Collateral Trustee, for itself and on behalf of the Subordinated Trustee and the holders of Subordinated Lien Obligations, if any, on such ABL Priority Collateral, and the obligations of such Guarantor under its guaranty of the ABL Obligations, shall be automatically, unconditionally and simultaneously released. The junior-priority Liens on the ABL Priority Collateral securing the Notes Priority Obligations and the Subordinated Lien Obligations, if any, respectively, shall also terminate and be released automatically to the extent the first-priority liens on the ABL Priority Collateral are released by the ABL Collateral Agent in connection with a sale, transfer or disposition of ABL Priority Collateral that occurs in connection with the foreclosure of, or other exercise of remedies with respect to, such ABL Priority Collateral by the ABL Collateral Agent (except with respect to any proceeds of such sale, transfer or disposition that remain after satisfaction in full of the ABL Obligations).

 

Amendments

 

The Collateral Trustee and the Subordinated Collateral Trustee shall each have the right to agree to amend, supplement or otherwise modify the Intercreditor Agreements and any other security document to the extent that such amendment, supplement or other modification is not materially adverse to the interests of the holders of ABL Obligations, the holders of Notes Priority Obligations or the holders of Subordinated Lien Obligations, as applicable. Furthermore, the documents governing the ABL Obligations, the Notes Priority Obligations and the Subordinated Lien Obligations, if any, may be amended, supplemented or modified, and any provision thereof may be waived, in each case, in accordance with the terms of such documents and without notice to, or the consent of the ABL Collateral Agent or any holder of ABL Obligations, the Collateral Trustee or any holder of Notes Priority Obligations, or the Subordinated Collateral Trustee or any holder of Subordinated Lien Obligations, if any (in each case, except to the extent any such persons are party to the documents being so amended, supplemented, modified or waived), without affecting the Lien priorities provided for in the General Intercreditor Agreement.

 

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Miscellaneous

 

In the event of any inconsistency between the terms of the Collateral Trust and Notes Priority Intercreditor Agreement, on the one hand, and the General Intercreditor Agreement, on the other hand, the terms of the General Intercreditor Agreement shall control.

 

Subordinated Lien Debt

 

The indenture will permit the Issuer and the Guarantors to incur Subordinated Lien Debt in the future. Subordinated Lien Debt will be permitted to be secured by the Collateral only if such Subordinated Lien Debt and the related junior- priority Liens are permitted to be incurred under the covenants described below under the captions “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Certain Covenants—Liens.” The Liens on the Collateral securing the Subordinated Lien Obligations will be junior to the Liens on the Collateral held by the Collateral Trustee securing the Notes Priority Obligations. All such Liens will be subject to Permitted Liens.

 

Notes Priority Debt

 

The notes offered hereby and all other Indebtedness permitted to be secured in accordance with the definition of Notes Priority Debt will be considered to be Notes Priority Debt for purposes of the Collateral Trust and Notes Priority Intercreditor Agreement referred to below. The provisions of the Collateral Trust and Notes Priority Intercreditor Agreement do not limit the amount of Notes Priority Debt that can be incurred and secured.

 

Collateral Trust and Notes Priority Intercreditor Agreement

 

The statements under this section are summaries of the material terms and provisions of the Collateral Trust and Notes Priority Intercreditor Agreement. They do not purport to be complete and are qualified in their entirety by reference to all the provisions in the Collateral Trust and Notes Priority Intercreditor Agreement.

 

Upon the incurrence of additional Notes Priority Debt in accordance with the terms of the indenture and the security documents, the Issuer, the Guarantors, the Trustee and the Collateral Trustee will enter into the Collateral Trust and Notes Priority Intercreditor Agreement to establish the terms of the relationship among each Series of Notes Priority Debt and between the holders of Notes Priority Obligations. Although the holders of the notes will not be party to the Collateral Trust and Notes Priority Intercreditor Agreement, by their acceptance of the notes they will agree to be bound thereby and the holders of the notes and other Notes Priority Obligations also specifically authorize the Collateral Trustee to enter into the Collateral Trust and Notes Priority Intercreditor Agreement on their behalf and to take all actions provided for under the terms of the Collateral Trust and Notes Priority Intercreditor Agreement and the holders of notes and other Notes Priority Obligations will be bound by such actions.

 

Voting

 

In connection with any matter under the Collateral Trust and Notes Priority Intercreditor Agreement requiring a vote of holders of Notes Priority Debt, each applicable Series of Notes Priority Debt eligible to vote will cast its votes in accordance with the Notes Priority Documents governing such Series of Notes Priority Debt. The amount of Notes Priority Debt to be voted by a Series of Notes Priority Debt will equal (1) the aggregate outstanding principal amount of Notes Priority Debt held by such Series of Notes Priority Debt (including outstanding letters of credit (unless fully cash collateralized in accordance with the terms of the relevant Notes Priority Documents, fully supported by a letter of credit satisfactory to the 

 

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issuer of the letter of credit supported thereby or otherwise supported in a manner satisfactory to the respective issuers thereof) whether or not then available or drawn, but excluding obligations under the Hedge Agreements), plus (2) the Hedge Agreement Outstanding Amount, plus (3) other than in connection with an exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Indebtedness of such Series of Notes Priority Debt. Following and in accordance with the outcome of the applicable vote under its Notes Priority Documents, the Notes Priority Representative of each applicable Series of Notes Priority Debt will cast all of its votes as a block in respect of any vote under the Collateral Trust and Notes Priority Intercreditor Agreement. In making all determinations of votes under the Collateral Trust and Notes Priority Intercreditor Agreement, the Collateral Trustee will be entitled to rely upon the votes, and relative outstanding amounts, as determined and reported to it by the Directing Notes Priority Representative, and will have no duty to independently ascertain such votes or amounts.

 

Enforcement of Liens

 

The Collateral Trust and Notes Priority Intercreditor Agreement provides that, if the Collateral Trustee at any time receives written notice from the Directing Notes Priority Representative that any Triggering Event has occurred entitling the Collateral Trustee to foreclose upon, collect or otherwise enforce its Liens on the Collateral, the Collateral Trustee will promptly deliver written notice thereof to each Notes Priority Representative, unless such notice is not required by the governing indenture. Thereafter, the Collateral Trustee may await written direction by an Act of Required Notes Priority Debtholders and will act, or decline to act, as directed by an Act of Required Notes Priority Debtholders, in the exercise and enforcement of the Collateral Trustee’s interests, rights, powers and remedies in respect of the Collateral or under the Notes Priority Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Trustee will act, or decline to act, with respect to the manner of such exercise of remedies as directed by an Act of Required Notes Priority Debtholders. Subsequent to the Collateral Trustee delivering written notice to each Notes Priority Representative that any Triggering Event has occurred entitling the Collateral Trustee to foreclose upon, collect or otherwise enforce its Liens on the Collateral, then, unless it has been directed to the contrary by an Act of Required Notes Priority Debtholders, the Collateral Trustee in any event may at the direction of the Directing Notes Priority Representative (but will not be obligated to) take all lawful and commercially reasonable actions permitted under the Notes Priority Documents to protect or preserve its interest in the Collateral subject thereto and the interests, rights, powers and remedies granted or available to it under, pursuant to or in connection with the Notes Priority Documents.

 

Without limiting the rights of the Required Notes Priority Debtholders to act as provided above, at any time while a payment default has occurred and is continuing with respect to any Series of Notes Priority Debt following the final maturity thereof or the acceleration by the holders of such Series of Notes Priority Debt of the maturity of all then outstanding Notes Priority Obligations in respect thereof, and in either case after the passage of a period of 180 days (the “Non-controlling Notes Priority Secured Parties’ Standstill Period”) from the date of delivery of a notice of the same in writing (and requesting that enforcement action be taken with respect to the Collateral) to the Collateral Trustee and each other Notes Priority Representative and so long as the payment default has not been cured or waived (or the acceleration rescinded), the Majority Holders in respect of such Series of Notes Priority Debt may exercise their rights and remedies in respect of Collateral under the Notes Priority Documents; provided further, however, that, notwithstanding the foregoing, in no event shall any holder of such Series of Notes Priority Debt exercise or continue to exercise (or be permitted to direct the Collateral Trustee to exercise or continue to exercise) any such rights 

 

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or remedies if, notwithstanding the expiration of the Non-controlling Notes Priority Secured Parties’ Standstill Period, (i) the Collateral Trustee at the direction of the Directing Notes Priority Representative (whether or not directed by an Act of Required Notes Priority Debtholders) or the Required Notes Priority Debtholders have commenced and are diligently pursuing the exercise of rights and remedies with respect to any of the Collateral (prompt notice of such exercise to be given to the Notes Priority Representative of the holders of the relevant Series of Notes Priority Debt) or (ii) an Insolvency or Liquidation Proceeding in respect of the respective Grantor has been commenced and is continuing.

 

Release and Subordination of Liens on Collateral

 

The Collateral Trust and Notes Priority Intercreditor Agreement provides that the Collateral Trustee will not release or subordinate any Lien of the Collateral Trustee or consent to the release or subordination of any Lien of the Collateral Trustee, except as provided in the following paragraph or:

 

(1)           as directed by an Act of Required Notes Priority Debtholders accompanied by an officers’ certificate to the effect that the release or subordination was permitted by each applicable Notes Priority Document;

 

(2)           as ordered pursuant to applicable law under a final and nonappealable order or judgment of a court of competent jurisdiction; or

 

(3)           in connection with any foreclosure or exercise of rights and remedies pursuant to the Collateral Trust and Notes Priority Intercreditor Agreement.

 

The Collateral Trust and Notes Priority Intercreditor Agreement further provides that the Collateral Trustee’s Liens on the Collateral will be released and terminate:

 

(1)           in whole, upon the Discharge of Notes Priority Obligations;

 

(2)           upon the written request of the Issuer and the applicable Grantor to the Collateral Trustee, as to any Collateral of a Grantor (other than the Issuer) that (x) is released as a guarantor under each Notes Priority Document and (y) is not obligated (as primary obligor or guarantor) with respect to any other Notes Priority Obligations at such time and so long as the respective release does not violate the terms of any Notes Priority Document which then remains in effect;

 

(3)           as to any Collateral that is released, sold, transferred or otherwise disposed of by the Issuer or any other Grantor to a Person that is not (either before or after such release, sale, transfer or disposition) the Issuer or a Subsidiary thereof in a transaction or other circumstance that complies with the terms of the indenture (for so long as the indenture is in effect) and is not prohibited by any of the other Notes Priority Documents, at the time of such release, sale, transfer or other disposition and to the extent of the interest released, sold, transferred or otherwise disposed of;

 

(4)           as to a release of less than all or substantially all of the Collateral (other than pursuant to clause (1), (2) or (3) above) at any time prior to the Discharge of Notes Priority Obligations if written consent to the release of all first-priority Liens on such Collateral has been given by an Act of Required Notes Priority Debtholders; and

 

(5)           as to a release of all or substantially all of the Collateral, if (A) consent to release of that Collateral has been given by the requisite percentage or number of holders of each Series of Notes Priority Debt at the time outstanding as provided for in the applicable Notes Priority Documents and (B) the Issuer has delivered an officer’s certificate and an 

 

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opinion of counsel to the Collateral Trustee certifying that any such necessary consents have been obtained.

 

The indenture will provide that the Liens on the Collateral shall be automatically released in connection with the foregoing events and, in addition, in connection with any of the following: (i) upon a Legal Defeasance or Covenant Defeasance of the notes as described under the caption “—Legal Defeasance and Covenant Defeasance”; and (ii) upon the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the provisions described under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” with regard to Collateral owned by that Subsidiary and (iii) upon a satisfaction and discharge of the indenture.

 

At any time that any Grantor desires that the Collateral Trustee take any action to acknowledge or give effect to any release of Collateral pursuant to the provisions described in the foregoing paragraph, the Issuer and the applicable Grantor shall deliver to the Collateral Trustee a certificate signed by an officer of the Issuer and such Grantor stating that the release of the applicable Collateral is permitted pursuant to the provisions described in the foregoing paragraph, as the case may be. In determining whether any release of Collateral is permitted, the Collateral Trustee is entitled to conclusively rely on any officer’s certificate furnished by it pursuant to the immediately preceding sentence. All actions taken pursuant to the provisions described in the foregoing paragraph will be at the sole cost and expense of the Issuer and the applicable Grantor.

 

Amendment of Collateral Trust and Notes Priority Intercreditor Agreement and Security Documents

 

The Collateral Trust and Notes Priority Intercreditor Agreement provides that no amendment or supplement to the provisions of any security document will be effective without the approval of the Collateral Trustee acting as directed by an Act of Required Notes Priority Debtholders except that:

 

(1)           any amendment or supplement that has the effect solely of adding or maintaining Collateral, securing additional Notes Priority Debt that was otherwise permitted by the terms of the Notes Priority Documents to be secured by the Collateral or preserving, perfecting or establishing the Liens thereon or the rights of the Collateral Trustee therein will become effective when executed and delivered by the Issuer or any other applicable Grantor party thereto and the Collateral Trustee;

 

(2)           no amendment or supplement that reduces, impairs or adversely affects the right of any holder of Notes Priority Obligations:

 

(i)            to vote its Notes Priority Debt as to any matter described as subject to an Act of Required Notes Priority Debtholders or a vote of the Required Notes Priority Debtholders (or amends the provisions of this clause (2) or the definition of “Act of Required Notes Priority Debtholders”),

 

(ii)           to share in the order of application described under the caption “—Application of Proceeds” in the proceeds of enforcement of or realization on any Collateral, or

 

(iii)          to require that Liens securing Notes Priority Obligations of such holder be released only as set forth in the provisions described under the caption “—Release and Subordination of Liens on Collateral,”

 

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will become effective without the consent of the requisite percentage or number of holders of each Series of Notes Priority Debt so affected under the applicable Notes Priority Documents; and

 

(3)           no amendment or supplement that imposes any obligation upon the Collateral Trustee or any Notes Priority Representative or adversely affects the rights of the Collateral Trustee or any Notes Priority Representative, respectively, in its capacity as such will become effective without the consent of the Collateral Trustee or such Notes Priority Representative, respectively.

 

Notwithstanding anything to the contrary under the caption “—Amendment of Collateral Trust and Notes Priority Intercreditor Agreement and Security Documents,” but subject to clauses (2) and (3) above any mortgage or other security document that secures Notes Priority Obligations may be amended or supplemented with the approval of the Collateral Trustee acting as directed in writing by the Required Notes Priority Debtholders.

 

Application of Proceeds

 

The Collateral Trust and Notes Priority Intercreditor Agreement provides that the Collateral Trustee will apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral and the proceeds of any casualty, condemnation or any title insurance policy required under any Notes Priority Document in the following order:

 

FIRST, to the payment of all reasonable and documented fees, costs and expenses incurred by the Trustee and the Collateral Trustee in connection with such sale, collection or realization or otherwise in connection with the Collateral Trust and Notes Priority Intercreditor Agreement or any of the Notes Priority Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Trustee and the Collateral Trustee under the Collateral Trust and Notes Priority Intercreditor Agreement on behalf of any Grantor and any other reasonable and documented costs or expenses incurred in connection with the exercise of any right or remedy thereunder by the Trustee and the Collateral Trustee;

 

SECOND, to each the Notes Priority Representative for each Series of Notes Priority Debt for application to the payment of all outstanding Notes Priority Debt and any other Notes Priority Obligations that are then due and payable in such order as may be provided in the applicable Notes Priority Documents in an amount sufficient to pay in full and discharge all outstanding Notes Priority Obligations that are then due and payable; and

 

THIRD, any surplus then remaining will be paid to the Grantors or their successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

 

For purposes of the immediately preceding paragraphs, “proceeds” of Collateral will include any and all cash, securities and other property realized from collection, foreclosure or enforcement of the Collateral Trustee’s Liens upon the Collateral (including distributions of Collateral in satisfaction of any Notes Priority Obligations).

 

In connection with the application of proceeds set forth in the preceding paragraphs under the caption “—Application of Proceeds,” except as otherwise directed by an Act of Required Notes Priority Debtholders, the Collateral Trustee may sell any non-cash proceeds for cash prior to the application of the proceeds thereof.

 

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Mandatory Redemption

 

The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the notes.

 

Optional Redemption

 

At any time prior to April 1, 2013, but not more than once in any twelve-month period, the Issuer may redeem, in the aggregate, the greater of (i) $37.5 million and (ii) up to 10% of the aggregate principal amount of notes issued under the indenture (together with any additional notes) at a redemption price of 103% of the principal amount thereof, plus accrued and unpaid interest thereon to the applicable redemption date.

 

At any time prior to April 1, 2013, the Issuer may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of notes issued under the indenture (together with any additional notes) at a redemption price of 109.500% of the principal amount thereof, plus accrued and unpaid interest thereon to the applicable redemption date, with all or a portion of the net cash proceeds of one or more Qualified Equity Offerings; provided that:

 

(1)           at least 55% of the aggregate principal amount of notes issued under the indenture (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by the Issuer and its Subsidiaries); and

 

(2)           the redemption must occur within 90 days of the date of the closing of such Qualified Equity Offering.

 

At any time prior to April 1, 2013, the Issuer may, on any one or more occasions, redeem all or a part of the notes, upon not less than 15 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest to, the date of redemption, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date.

 

Except pursuant to the three preceding paragraphs, the notes will not be redeemable at the Issuer’s option prior to April 1, 2013.

 

On or after April 1, 2013, the Issuer may redeem all or a part of the notes upon not less than 15 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below, subject to the rights of holders of notes on the relevant record date to receive interest on the relevant interest payment date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2013
    	
 
    	
107.125
    	
%
    
	
2014
    	
 
    	
104.750
    	
%
    
	
2015 and thereafter
    	
 
    	
100.000
    	
%
    


 

If less than all of the notes are to be redeemed at any time, the Trustee will select notes for redemption on a pro rata basis (or, in the case of notes issued in global form as discussed under “—Book-Entry; Delivery and Form,” based on a method that most nearly approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise required by law or applicable stock exchange or depositary requirements.

 

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No notes of $2,000 or less shall be redeemed in part. Notices of redemption shall be sent electronically or mailed by first class mail or as otherwise provided in accordance with the procedures of DTC at least 15 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture. Notices of redemption may be given prior to the completion thereof, and any redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the Qualified Equity Offering.

 

If any note is to be redeemed in part only, the notice of redemption that relates to that note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder thereof upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, unless the Issuer defaults in the payment of the redemption price, interest ceases to accrue on notes or portions of them called for redemption.

 

The Issuer or its Affiliates may acquire notes by means other than a redemption from time to time, including through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise so long as the acquisition does not otherwise violate the terms of the indenture, upon such terms and at such prices as the Issuer or its Affiliates may determine, which may be more or less than the consideration for which the notes offered hereby are being sold and could be for cash or other consideration.

 

Repurchase at the Option of Holders

 

Change of Control

 

If a Change of Control occurs, each holder of notes will have the right to require the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s notes pursuant to a Change of Control Offer on the terms set forth in the indenture. In the Change of Control Offer, the Issuer will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest thereon to the date of purchase, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control (or prior to the Change of Control if a definitive agreement is in place for the Change of Control), the Issuer will send a notice to each holder electronically or by first class mail at its registered address or otherwise in accordance with the procedures of DTC, describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date (as defined in the indenture) specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indenture and described in such notice. The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of such compliance.

 

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On the Change of Control Payment Date, the Issuer will, to the extent lawful:

 

(1)           accept for payment all notes or portions thereof properly tendered pursuant to the Change of Control Offer;

 

(2)           deposit with the paying agent an amount equal to the Change of Control Payment (as defined in the indenture) in respect of all notes or portions thereof properly tendered; and

 

(3)           deliver or cause to be delivered to the Trustee the notes so accepted together with an Officers’ Certificate of the Issuer stating the aggregate principal amount of notes or portions thereof being purchased by the Issuer.

 

The paying agent will promptly mail or wire transfer to each holder of notes properly tendered and so accepted the Change of Control Payment for such notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each such new note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any note so accepted for payment will cease to accrue interest on and after the Change of Control Payment Date.

 

The provisions described above that require the Issuer to make a Change of Control Offer in connection with a Change of Control will be applicable regardless of whether any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that the Issuer repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

 

The Change of Control purchase feature of the notes may in certain circumstances make more difficult or discourage a sale or takeover of the Issuer and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Issuer and the initial purchasers.

 

The Issuer will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Issuer and purchases all notes properly tendered and not withdrawn under such Change of Control Offer or (2) a notice of redemption has been given for all of the notes pursuant to the indenture as described above under the caption “—Optional Redemption,” unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, subject to one or more conditions precedent, including but not limited to the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.

 

The ABL Credit Facility provides that certain change of control events will constitute a default under the ABL Credit Facility. Credit agreements that the Issuer enters into in the future may contain similar provisions. Such defaults could result in amounts outstanding under the ABL Credit Facility and such other agreements being declared immediately due and payable or lending commitments being terminated. In addition, the ABL Credit Facility does not permit the Issuer to repurchase the notes in connection with a Change of Control or otherwise. Accordingly, if a Change of Control occurs, the Issuer could not make the offer required by the indenture without amending or refinancing the ABL Credit Facility or any future credit facility. We cannot assure you that the Issuer will be able to amend or refinance 

 

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the ABL Credit Facility or any future credit facility on acceptable terms, or at all. Additionally, the Issuer’s ability to pay cash to holders of notes following the occurrence of a Change of Control may be limited by its then existing financial resources; sufficient funds may not be available to the Issuer when necessary to make any required repurchases of notes. See “Risk Factors—Risks Related to the Notes and Our Indebtedness—We may not have the ability to raise the funds necessary to finance the change of control offer or the asset sale offer required by the indenture governing the notes.”

 

The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Issuer and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require the Issuer to repurchase such notes as a result of a sale, transfer, conveyance or other disposition of less than all of the assets of the Issuer and its Subsidiaries taken as a whole to another Person or group may be uncertain.

 

A Change of Control would be triggered at such time as a majority of the members of the Board of Directors of the Issuer or Parent are not Continuing Directors (defined as directors serving on the date of the indenture, or directors who were nominated for election by directors or elected to the Board of Directors with the approval of a majority of the directors who were serving at the time of such nomination or election, as the case may be). You should note, however, that recent case law suggests that, in the event that incumbent directors are replaced as a result of a contested election, the Issuer may nevertheless avoid triggering a Change of Control under a clause similar to the provision described in the prior sentence if the outgoing directors were to approve the new directors for the purpose of such Change of Control clause.

 

Asset Sales

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(1)           other than in the case of an Event of Loss, the Issuer (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

 

(2)           with respect to Asset Sales involving aggregate consideration in excess of $25.0 million, such fair market value is determined in good faith by the Board of Directors of the Issuer or Parent; and

 

(3)           other than in the case of an Event of Loss or a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary is in the form of cash or Cash Equivalents or a combination thereof; provided that, for purposes of this provision, each of the following shall be deemed to be cash:

 

(a)           any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto, or as would be shown on such balance sheet or footnotes if such liability was incurred subsequent to the date of such balance sheet) of the Issuer or any Restricted Subsidiary (other than contingent liabilities, Indebtedness that is by its terms contractually subordinated in right of payment to the notes or any Note Guarantee, liabilities to the extent owed to the Issuer or any Restricted Subsidiary of the Issuer and liabilities incurred in 

 

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contemplation of such Asset Sale) that are assumed by the transferee of any such assets or Equity Interests pursuant to an agreement that releases the Issuer or such Restricted Subsidiary, as the case may be, from further liability, or that are assumed or released as a matter of law;

 

(b)           any securities, notes or other obligations received by the Issuer or any such Restricted Subsidiary, as the case may be, from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash or Cash Equivalents within 180 days (to the extent of the cash or Cash Equivalents received in that conversion); and

 

(c)           any Designated Non-Cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (c) that is at the time outstanding, not to exceed the greater of (x) $50.0 million and (y) 7.5% of the Issuer’s Consolidated Total Assets at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.

 

Within 365 days after the receipt of any Net Proceeds from an Asset Sale other than (1) a sale of Collateral or (2) a Sale of a Subsidiary Guarantor, the Issuer or such Restricted Subsidiary may apply such Net Proceeds at its option and to the extent it so elects:

 

(1)           to make one or more Asset Sale Offers to all holders of notes and all Holders of other Notes Priority Debt on a pro rata basis based on the principal amount of notes and such other Notes Priority Debt outstanding;

 

(2)           if such Asset Sale is by a Restricted Subsidiary that is not a Guarantor, to repay Indebtedness and other obligations of a Restricted Subsidiary that is not a Guarantor other than Indebtedness owed to the Issuer or a Guarantor;

 

(3)           to repay any Indebtedness (including the notes) of the Issuer or any Subsidiary Guarantor (other than any Disqualified Stock or any Indebtedness that is contractually subordinated in right of payment to the notes), other than Indebtedness owed to Parent, the Issuer or a Restricted Subsidiary of the Issuer; provided that the Issuer shall equally and ratably redeem or repurchase the notes as described under the caption “—Optional Redemption,” or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase the notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of notes that would otherwise be prepaid;

 

(4)           to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Issuer;

 

(5)           to make an Investment in Replacement Assets or make a capital expenditure in or that is used or useful in a Permitted Business; or

 

(6)           any combination of the foregoing;

 

provided that the Issuer will be deemed to have complied with the provisions described in clauses (4) and (5) of this paragraph if and to the extent that, within 365 days after the Asset Sale that generated the Net Proceeds, the Issuer or such Restricted Subsidiary has entered into and not abandoned or rejected a binding agreement to acquire the assets or Capital Stock of a Permitted Business, make an Investment in Replacement Assets or make a capital expenditure in compliance with the provision described in clauses (4) and (5) of this paragraph, and that acquisition, purchase, Investment or capital expenditure is thereafter completed within 180 days after the end of such 365-day period. Pending the final application of any such Net Proceeds, the Issuer may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the indenture.

 

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Within 365 days after the receipt of any Net Proceeds from an Asset Sale that constitutes (1) a sale of Collateral or (2) a Sale of a Subsidiary Guarantor, the Issuer (or the applicable Restricted Subsidiary, as the case may be) may apply an amount equal to such Net Proceeds:

 

(1)           (a) to make one or more Asset Sale Offers to all holders of notes and all Holders of other Notes Priority Debt on a pro rata basis based on the principal amount of notes and such other Notes Priority Debt outstanding or (b) with respect to Net Proceeds derived from any ABL Priority Collateral, to repay, repurchase or redeem any ABL Obligations; provided that any such Net Proceeds shall be applied in accordance with the General Intercreditor Agreement;

 

(2)           to make an Investment in other assets or property that would constitute Collateral;

 

(3)           to make an Investment in Capital Stock of another Permitted Business if, after giving effect to such Investment, the Permitted Business becomes a Subsidiary Guarantor or is merged into or consolidated with the Issuer or any Subsidiary Guarantor;

 

(4)           to make an Investment in Replacement Assets or to make a capital expenditure with respect to assets, in each case, that constitute Collateral;

 

(5)           to repay, repurchase or redeem Notes Priority Obligations; provided that the Issuer shall equally and ratably redeem or repurchase the notes as described under the caption “—Optional Redemption” or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase the notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of notes that would otherwise be prepaid; or

 

(6)           any combination of the foregoing;

 

provided that the Issuer will be deemed to have complied with the provision described in clauses (2), (3) and (4) of this paragraph if, and to the extent that, within 365 days after the Asset Sale that generated the Net Proceeds, the Issuer or such Restricted Subsidiary has entered into and not abandoned or rejected a binding agreement to make an Investment in assets or property that would constitute Collateral or make an Investment in Capital Stock of another Permitted Business or to make an Investment in Replacement Assets or to make a capital expenditure with respect to assets that constitute Collateral in compliance with the provisions described in clauses (2), (3) and (4) of this paragraph, and that purchase, Investment or capital expenditure is thereafter completed within 180 days after the end of such 365-day period.

 

Any Net Proceeds from Asset Sales that are not applied or invested as described in the two preceding paragraphs will constitute “Excess Proceeds.” Within 10 business days after the aggregate amount of Excess Proceeds exceeds $25 million, the Issuer will make an Asset Sale Offer to all holders of notes and all holders of other Notes Priority Debt containing provisions similar to those set forth in the indenture with respect to offers to purchase with the proceeds of sales of assets, to purchase the maximum principal amount of notes and such other Notes Priority Debt that may be purchased out of the Excess Proceeds. The offer price for the notes and any other Notes Priority Debt in any Asset Sale Offer will be equal to 100% of the principal amount of the notes and such other Notes Priority Debt purchased, plus accrued and unpaid interest on the notes and any other Notes Priority Debt to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Issuer may use such Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and such other Notes Priority Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the notes and 

 

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such other Notes Priority Debt shall be purchased on a pro rata basis based on the principal amount of notes and such other Notes Priority Debt tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. The Issuer may satisfy the foregoing obligation with respect to any Net Proceeds by making an Asset Sale Offer prior to the expiration of the relevant 365-day period (as such period may be extended in accordance with the indenture) or with respect to Excess Proceeds of $25 million or less.

 

The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the indenture, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such compliance.

 

Certain Covenants

 

Effectiveness of Certain Covenants

 

If on any date following the date of the indenture:

 

(1)           the notes are rated Baa3 or better by Moody’s and BBB- or better by S&P (or, if either such entity ceases to rate the notes for reasons outside of the control of the Issuer, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer as a replacement agency); and

 

(2)           no Default or Event of Default shall have occurred and be continuing,

 

then, beginning on that day and subject to the provisions of the following paragraph, the covenants specifically listed under the following captions in this offering memorandum will be suspended:

 

(1)           “—Repurchase at the Option of Holders—Asset Sales”;

 

(2)           “—Certain Covenants—Restricted Payments”;

 

(3)           “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

 

(4)           “—Certain Covenants—Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries”;

 

(5)           clause (3) of “—Certain Covenants—Merger, Consolidation or Sale of Assets”;

 

(6)           “—Certain Covenants—Transactions with Affiliates”; and

 

(7)           “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries.”

 

During any period that the foregoing covenants have been suspended, the Issuer’s or Parent’s Board of Directors may not designate any of the Issuer’s Subsidiaries as Unrestricted Subsidiaries pursuant to the covenant described below under the caption “—Designation of Restricted and Unrestricted Subsidiaries.”

 

Notwithstanding the foregoing, if the rating assigned by either such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants will be reinstituted as of and from the date of such rating decline. Calculations under the reinstated “Restricted Payments” covenant will be made as if the “Restricted Payments” covenant had 

 

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been in effect since the date of the indenture except that no Default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. Additionally, upon the reinstatement of the “Asset Sale” covenant, the amount of Excess Proceeds from Net Proceeds shall be reset at zero. All Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, while the foregoing covenants were suspended will be classified to have been incurred or issued pursuant to clause (4) of the second paragraph of “—Incurrence of Indebtedness and Issuance of Preferred Stock.”

 

Restricted Payments

 

(A)          The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)           declare or pay any dividend or make any other payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends, payments or distributions (a) payable in Equity Interests (other than Disqualified Stock) of the Issuer or to the Issuer or a Restricted Subsidiary of the Issuer or (b) payable by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

 

(2)           purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Issuer) any Equity Interests of the Issuer or any Restricted Subsidiary of the Issuer held by Persons other than the Issuer or any Restricted Subsidiary of the Issuer;

 

(3)           make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any, Subordinated Lien Debt or any Indebtedness of the Issuer or any Subsidiary Guarantor that is unsecured or contractually subordinated to the notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among the Issuer and any of the Guarantors), except payments of (x) interest, (y) principal at the Stated Maturity thereof (or the satisfaction of a sinking fund obligation) or (z) principal and accrued interest, due within one year of the date of such payment, purchase, redemption, defeasance, acquisition or retirement; or

 

(4)           make any Restricted Investment

 

(all such restricted payments and other restricted actions set forth in clauses (1) through (4) above (other than any exceptions thereto) being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:

 

(1)           no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(2)           the Issuer would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first 

 

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paragraph of the covenant described below under the caption “—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; and

 

(3)           such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the date of the indenture permitted by the provisions described in clauses (1), (6), (7), (8), (9), (11), (12)(c), (d) and (e) (in the case of these subsections of clause (12), to the extent it qualifies as selling, general and administrative expense of Parent on a standalone basis), (13) and (14) of the next succeeding paragraph (B), is less than the sum, without duplication, of:

 

(a)           50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from the beginning of the first fiscal quarter after the date of the indenture to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

 

(b)           100% of the aggregate net cash proceeds and the fair market value of assets received by the Issuer since the date of the indenture as a contribution to its equity capital or from the issue or sale of Equity Interests of the Issuer or from the issue or sale of Equity Interests of any direct or indirect parent of the Issuer to the extent such net cash proceeds are actually contributed to the Issuer as equity (other than Excluded Contributions, Refunding Capital Stock, Disqualified Stock and Designated Preferred Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Issuer that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Issuer), plus

 

(c)           the net cash proceeds and the fair market value of assets received by the Issuer or any Restricted Subsidiary of the Issuer from (i) the disposition, sale, liquidation, retirement or redemption of all or any portion of any Restricted Investment made after the date of the indenture, net of disposition costs and repurchases and redemptions of such Restricted Investments from the Issuer or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees which constitute Restricted Investments by the Issuer or its Restricted Subsidiaries, and (ii) the sale (other than to the Issuer or a Restricted Subsidiary of the Issuer) of the Capital Stock of an Unrestricted Subsidiary, plus

 

(d)           without duplication, (i) to the extent that any Unrestricted Subsidiary of the Issuer that was designated as such after the date of the indenture is redesignated as a Restricted Subsidiary, the fair market value of the Issuer’s direct or indirect Investment in such Subsidiary as of the date of such redesignation, plus (ii) an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from payments of dividends, repayments of the principal of loans or advances or other transfers of assets from Unrestricted Subsidiaries of the Issuer to the Issuer or any Restricted Subsidiary of the Issuer after the date of the indenture, except, in each case, to the extent that any such Investment or net reduction in Investment is included in the calculation of Consolidated Net Income or were used to reduce Permitted Investments, plus

 

(e)           without duplication, in the event the Issuer or any Restricted Subsidiary of the Issuer makes any Investment in a Person that, as a result of or in connection with such Investment, becomes a Restricted Subsidiary of the Issuer, an amount equal to 

 

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the fair market value of the existing Investment in such Person made after the date of the indenture that was previously treated as a Restricted Payment.

 

(B)           The preceding provisions will not prohibit:

 

(1)           the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof or the giving of a redemption notice related thereto, as the case may be, if at said date of declaration or notice such payment would have complied with the provisions of the indenture;

 

(2)           (a) the making of any Restricted Payment in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Issuer or any direct or indirect parent of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Restricted Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer) or from substantially concurrent contributions to the equity capital of the Issuer (collectively, including any such contributions, “Refunding Capital Stock”); and

 

(b)           the declaration and payment of accrued dividends on any Equity Interests redeemed, repurchased, retired, defeased or acquired out of the proceeds of the sale of Refunding Capital Stock within 45 days of such sale;

 

provided that the amount of any such proceeds or contributions that are utilized for any Restricted Payment pursuant to this clause (2) shall be excluded from the amount described in clause (3)(b) of the preceding paragraph (A) and clause (4) of this paragraph (B) and shall not constitute an Excluded Contribution;

 

(3)           the payment, repayment, defeasance, redemption, repurchase, retirement or other acquisition of (a) Indebtedness of the Issuer or any Guarantor that is contractually subordinated to the notes or to any Note Guarantee or (b) any Subordinated Lien Debt or (c) any Indebtedness of the Issuer or any Guarantor that is unsecured or (d) Disqualified Stock of the Issuer or any Restricted Subsidiary thereof, in each such case of (a) through (d) in exchange for, or out of the net cash proceeds from, an incurrence of Permitted Refinancing Indebtedness;

 

(4)           Restricted Investments acquired (a) from the proceeds of a capital contribution to, or out of the net cash proceeds of substantially concurrent contributions to, the equity capital of the Issuer or (b) from the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer) of, or in exchange for, Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (so long as such proceeds are contributed to the Issuer); provided, that for the purposes hereof, the amount of any such net cash proceeds that are utilized for any such acquisition and the fair market value of any assets so acquired or exchanged shall be excluded from the amount described in clause (3)(b) of the preceding paragraph (A) and clause (2) of this paragraph (B) and shall not constitute an Excluded Contribution;

 

(5)           the repurchase of Equity Interests deemed to occur (i) upon the exercise of options or warrants if such Equity Interests represent all or a portion of the exercise price thereof and (ii) in connection with the withholding of a portion of the Equity Interests granted or awarded to a director or an employee to pay for the taxes payable by such director or employee upon such grant or award;

 

(6)           the payment of dividends on the Issuer’s common stock (or the payment of dividends to Parent or any other direct or indirect parent of the Issuer to fund the 

 

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payment of dividends on its common stock) following any public offering of common stock of the Issuer or Parent or any other direct or indirect parent of the Issuer, in an aggregate amount of up to 6.0% per annum of the net proceeds received by the Issuer (or by Parent or any other direct or indirect parent of the Issuer and contributed to the Issuer) from such public offering; provided, however, that the aggregate amount of all such dividends pursuant to this clause (6) since the date of the indenture shall not exceed the aggregate amount of net proceeds received by the Issuer (or by a direct or indirect parent of the Issuer and contributed to the Issuer) from such public offering;

 

(7)           the purchase, redemption, retirement or other acquisition for value of any Equity Interests of the Issuer, Parent or any other direct or indirect parent of the Issuer held by any current, future or former director, officer, consultant or employee of the Issuer, Parent or any other direct or indirect parent of the Issuer or any Restricted Subsidiary of the Issuer, or their estates or the beneficiaries of such estates (including the payment of dividends and distributions to Parent or any other direct or indirect parent of the Issuer to enable Parent or such other parent to repurchase Equity Interests owned by its directors, officers, consultants and employees), in an amount not to exceed $5.0 million in any calendar year; provided that the Issuer may carry over and make in subsequent calendar years, in addition to the amounts permitted for such calendar year, the amount of purchases, redemptions, acquisitions or retirements for value (and dividends and distributions) permitted to have been but not made in any preceding calendar year up to a maximum of $10.0 million in any calendar year, provided, further, that such amounts will be increased by (a) the cash proceeds from the sale after the date of the indenture of Equity Interests of the Issuer or, to the extent contributed to the Issuer, Equity Interests of Parent or any other direct or indirect parent of the Issuer, in each case to directors, officers, consultants or employees of Parent, the Issuer or any other direct or indirect parent of the Issuer or any Restricted Subsidiary of the Issuer after the date of the indenture, plus (b) the cash proceeds of key man life insurance policies received by the Issuer, its Restricted Subsidiaries, Parent or any other direct or indirect parent of the Issuer and contributed to the Issuer after the date of the indenture, in the case of each of clauses (a) and (b), to the extent such net cash proceeds are not otherwise applied to make or otherwise increase the amounts available for Restricted Payments pursuant to clause (3)(b) of the preceding paragraph (A) or clauses (2), (4) or (16) of this paragraph (B);

 

(8)           upon the occurrence of a Change of Control (or similarly defined term in other Indebtedness) and within 90 days after completion of the offer to repurchase notes and other Notes Priority Obligations pursuant to the covenant described above under the caption “—Repurchase at the Option of Holders—Change of Control” (including the purchase of all notes tendered), any repayment, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Lien Debt or any Indebtedness of the Issuer or any Guarantor that is unsecured or contractually subordinated to the notes or to any Note Guarantee that is required to be repurchased or redeemed pursuant to the terms thereof as a result of such Change of Control (or similarly defined term in other Indebtedness), at a purchase price not greater than 101% of the outstanding principal amount or liquidation preference thereof (plus accrued and unpaid interest and liquidated damages, if any);

 

(9)           within 90 days after completion of any offer to repurchase notes or other Notes Priority Obligations pursuant to the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales” (including the purchase of all notes tendered), any repayment, repurchase, redemption, defeasance or other acquisition or 

 

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retirement for value of any Subordinated Lien Debt or any Indebtedness of the Issuer or any Guarantor that is unsecured or contractually subordinated to the notes or to any Note Guarantee that is required to be repurchased or redeemed pursuant to the terms thereof as a result of such Asset Sale (or similarly defined term in such other Indebtedness), at a purchase price not greater than 100% of the outstanding principal amount or liquidation preference thereof (plus accrued and unpaid interest and liquidated damages, if any);

 

(10)         payments or distributions, in the nature of satisfaction of dissenters’ rights, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of the indenture applicable to mergers, consolidations and transfers of all or substantially all the property and assets of the Issuer;

 

(11)         the payment of cash in lieu of the issuance of fractional shares of Equity Interests upon exercise or conversion of securities exercisable or convertible into Equity Interests of the Issuer or Parent or any direct or indirect parent of the Issuer (and payments of dividends to Parent or any direct or indirect parent of the Issuer for such purposes);

 

(12)         the declaration and payment of dividends or distributions by the Issuer or any Restricted Subsidiary to, or the making of loans to, Parent or any other direct or indirect parent of the Issuer in amounts sufficient for Parent or any other direct or indirect parent of the Issuer to pay, in each case without duplication:

 

(a)           franchise and excise taxes and other fees, taxes and expenses, in each case, to the extent required to maintain their corporate existence, and any taxes required to be withheld and paid by Parent or any other direct or indirect parent of the Issuer;

 

(b)           with respect to any taxable period during which the Issuer or any of its Subsidiaries is a member of a consolidated, unitary, combined or similar income tax group in which Parent (or the direct or indirect parent of Parent) is the common parent, the portion of its consolidated, unitary, combined or similar U.S. federal, state, local and/or non-U.S. income taxes (as applicable) of such income tax group attributable to the income of the Issuer and any of its Subsidiaries, in an amount not to exceed the income tax liabilities that would have been payable by the Issuer and/or its Subsidiaries (as applicable) on a stand-alone basis (or as a stand-alone group), reduced, in each case, by any such income taxes paid or to be paid directly by the Issuer or its Subsidiaries; provided that the amount of any such payments attributable to any income of an Unrestricted Subsidiary shall be limited to the cash distributions made by such Unrestricted Subsidiary to the Issuer or its Restricted Subsidiaries for such purpose;

 

(c)           (1) customary salary, bonus and other benefits payable to officers and employees of Parent or any other direct or indirect parent of the Issuer to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries and (2) any reasonable and customary indemnification claims made by directors or officers of the Issuer, Parent or any other direct or indirect parent of the Issuer;

 

(d)           general corporate administrative, operating and overhead costs and expenses of Parent or any other direct or indirect parent of the Issuer to the extent such costs and expenses are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries; and

 

(e)           fees and expenses related to any equity or debt offering or acquisition by Parent or such other parent entity (whether or not successful);

 

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(13)         the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries and preferred stock of any Restricted Subsidiary issued or incurred in accordance with the covenant described under “—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” to the extent such dividends are included in the definition of “Fixed Charges”;

 

(14)         the declaration and payment of dividends or distributions:

 

(a)           to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of the Issuer issued after the date of the indenture;

 

(b)           to Parent or any other direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of Parent or any other direct or indirect parent of the Issuer issued after the date of the indenture; provided, however, that the aggregate amount of dividends declared and paid pursuant to this clause (14)(b) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock; and

 

(c)           on Refunding Capital Stock that is preferred stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

 

provided, however, in the case of each of (a), (b) and (c) of this clause (14), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is preferred stock, after giving effect to such issuance or declaration on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

 

(15)         other Restricted Payments in an amount which, taken together with all other Restricted Payments made pursuant to this clause (15), do not exceed $25.0 million;

 

(16)         the Refinancing Transaction; and

 

(17)         Restricted Payments in an aggregate amount not to exceed the amount of all Excluded Contributions;

 

provided that, in the case of clauses (4) and (6) through (9) above, no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof.

 

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Issuer or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. In determining whether any Restricted Payment is permitted by the covenant described under the caption “—Restricted Payments,” the Issuer and its Restricted Subsidiaries may allocate all or any portion of such Restricted Payment among the categories described in clauses (1) through (17) of the immediately preceding paragraph or among such categories and the types of Restricted Payments described in the first paragraph under “—Restricted Payments” (including categorization in whole or in part as a Permitted Investment); provided that, at the time of such allocation, each Restricted Payment, or allocated portions thereof, would be permitted under the various provisions of the covenant described under the caption “—Restricted Payments” into which such particular Restricted Payment is allocated; and provided further that the Issuer and its Restricted Subsidiaries may reclassify all or a portion of such Restricted Payment or Permitted Investment in any manner that complies with this covenant, and following such reclassification such Restricted Payment 

 

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or Permitted Investment shall be treated as having been made pursuant to only the clause or clauses of this covenant to which such Restricted Payment or Permitted Investment has been reclassified. The cancellation of Indebtedness owing to the Issuer from members of management, directors or consultants of the Issuer, any of its direct or indirect parents, Parent or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parents or Parent will not be deemed to constitute a Restricted Payment for purposes of the indenture.

 

Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness (including Acquired Debt) or issue any shares of Disqualified Stock, and the Issuer will not permit any of its Restricted Subsidiaries to issue any preferred stock (other than in each case Disqualified Stock or preferred stock of Restricted Subsidiaries held by the Issuer or a Restricted Subsidiary, so long as so held); provided, however, that (i) the Issuer or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and issue Disqualified Stock and (ii) any Subsidiary Guarantor may issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred, at the beginning of such four-quarter period.

 

The covenant described by the first paragraph under the caption “—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” will not prohibit the incurrence or issuance of any of the following (collectively, “Permitted Debt”):

 

(1)           Indebtedness incurred by the Issuer or any Subsidiary Guarantor (as borrower, co-borrower, guarantor, obligor, co-obligor or otherwise) under one or more Credit Facilities (including the ABL Credit Facility) in an aggregate principal amount at any one time outstanding under the provision described in this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (A) $70.0 million and (B) the Borrowing Base as of the date of such incurrence;

 

(2)           Indebtedness incurred by the Issuer and the Subsidiary Guarantors represented by the notes and the Note Guarantees issued on the date of this indenture, plus any exchange notes and exchange guarantees issued in exchange thereof pursuant to the Registration Rights Agreement (for the sake of clarity, this clause (2) shall not permit additional notes, but shall permit exchange notes and related exchange guarantees to be issued pursuant to a registration rights agreement in exchange for additional notes otherwise permitted to be incurred hereunder);

 

(3)           the Senior Unsecured Loan incurred by the Issuer and the Subsidiary Guarantors on the date of this indenture in an aggregate principal amount of $125.0 million;

 

(4)           Indebtedness of the Issuer and the Subsidiary Guarantors existing on the Issue Date (other than Indebtedness described in clauses (1), (2) and (3);

 

(5)           Indebtedness of the Issuer or any of its Restricted Subsidiaries (including without limitation Capital Lease Obligations, mortgage financings or purchase money obligations), 

 

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Disqualified Stock issued by the Issuer or any Restricted Subsidiary and preferred stock issued by any Restricted Subsidiary, in each case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets used in the business of the Issuer or such Restricted Subsidiary or in a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)), in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (5), not to exceed as of any date of incurrence the greater of (a) 3.75% of the Issuer’s Consolidated Total Assets and (b) $25.0 million;

 

(6)           Permitted Refinancing Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by the indenture to be incurred or Disqualified Stock or Preferred Stock permitted to be issued under the provisions described in the first paragraph of this covenant or clause (2), (3), (4), (6), (9), (10) or (19) of this paragraph;

 

(7)           intercompany Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries and owing to and held by the Issuer or any of its Restricted Subsidiaries; provided, however, that:

 

(a)           if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is a Person other than the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and

 

(b)           (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by the provision described in this clause (7);

 

(8)           (a) the Guarantee by the Issuer or any of the Subsidiary Guarantors of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this covenant, (b) the Guarantee by any Foreign Subsidiary, New US LLC 1 or New US LLC 2 of Indebtedness of another Foreign Subsidiary of the Issuer or New US LLC 1 or New US LLC 2 that was permitted to be incurred by another provision of this covenant, (c) any Guarantee by a Restricted Subsidiary of the Issuer of Indebtedness of the Issuer (so long as such Restricted Subsidiary also guarantees the Notes if required pursuant to the covenant under the caption “—Guarantees”) or (d) any Guarantee by a Subsidiary Guarantor of any Indebtedness of any Subsidiary Guarantor;

 

(9)           (x) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Subsidiary Guarantors incurred to finance an acquisition or (y) Acquired Debt; provided that, in either case, after giving effect to the transactions that result in the incurrence or issuance thereof, on a pro forma basis, (i) either (a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant or (b) the Fixed Charge 

 

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Coverage Ratio for the Issuer would be greater than immediately prior to such transactions;

 

(10)         preferred stock of a Restricted Subsidiary of the Issuer issued to the Issuer or another Restricted Subsidiary of the Issuer; provided that (a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof will be deemed, in each case, to constitute an issuance of such preferred stock that was not permitted by the provision described in this clause (10);

 

(11)         ABL Debt of the Issuer or any Subsidiary Guarantor under the following: (a) ABL Hedge Agreements that are incurred in the ordinary course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder, (b) ABL Bank Products in the ordinary course of business and (c) ABL Cash Management Agreements in the ordinary course of business;

 

(12)         additional Indebtedness of the Issuer or any of its Restricted Subsidiaries incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (12), not to exceed as of any date of incurrence the greater of (x) 5.0% of the Issuer’s Consolidated Total Assets and (y) $35.0 million;

 

(13)         Indebtedness incurred by the Issuer or any Restricted Subsidiary of the Issuer to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the notes;

 

(14)         Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;

 

(15)         Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;

 

(16)         Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under the indenture;

 

(17)         Indebtedness of Foreign Subsidiaries, New US LLC 1 and New US LLC 2 incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (17), not to exceed as of any date of incurrence $25.0 million;

 

(18)         Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to any current, future or former director, officer, consultant or employee of the Issuer, the direct or indirect parent of the Issuer or any Restricted Subsidiary of the Issuer (or any of their Affiliates), or their estates or the beneficiaries of such estates to finance the purchase, redemption, acquisition or retirement for value of Equity Interests permitted by clause (2) of the second paragraph of the covenant described under the caption “—Restricted 

 

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Payments,” in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to the provision described in this clause (18), not to exceed $2.5 million as of any date of incurrence;

 

(19)         Contribution Indebtedness;

 

(20)         (a) Indebtedness incurred in connection with any permitted Sale and Leaseback Transaction and any refinancing, refunding, renewal or extension of any such Indebtedness, provided that, except to the extent otherwise permitted hereunder, the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and the direct and contingent obligors with respect to such Indebtedness are not changed; provided further  that the Attributable Debt with respect to all Sale and Leaseback Transactions and any refinancing, refunding, renewal or extension in respect thereof shall not exceed as of any date of incurrence $40.0 million in the aggregate;

 

(b)           Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;

 

(c)           Indebtedness representing deferred compensation to employees of the Issuer (or any direct or indirect parent of the Issuer) and its Restricted Subsidiaries incurred in the ordinary course of business; and

 

(21)         cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts.

 

For purposes of determining compliance with this covenant, in the event that any proposed Indebtedness or preferred stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (21) above, or is entitled to be incurred or issued pursuant to the first paragraph of this covenant, the Issuer, in its sole discretion, will be permitted to divide and classify at the time of its incurrence or issuance, and may from time to time divide or reclassify, all or a portion of such item of Indebtedness or Disqualified Stock or preferred stock such that it will be deemed to have been incurred pursuant to one or more of such clauses (in whole or in part) or the first paragraph of this covenant, to the extent that such reclassified Indebtedness could be incurred pursuant to such new clause or the first paragraph of this covenant at the time of such reclassification (including in part pursuant to one or more clauses and/or in part pursuant to the first paragraph of this covenant), provided, however, that Indebtedness under an ABL Credit Facility may only be incurred under clauses (1) and (11) of the definition of Permitted Debt, as applicable.

 

For the purpose of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred or first committed (in the case of revolving credit debt); provided that if such Indebtedness denominated in a foreign currency is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar- denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), 

 

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defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

 

Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that may be incurred pursuant to this covenant will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies. In addition, for purposes of determining any particular amount of Indebtedness, any Guarantees, Liens or obligations with respect to letters of credit, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included.

 

The Issuer will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the notes and the applicable Note Guarantees on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

 

Liens

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired.

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

 

(1)           pay dividends or make any other distributions on its Capital Stock (or with respect to any other interest or participation in, or measured by, its profits) to the Issuer or any of its Restricted Subsidiaries or pay any Indebtedness owed to the Issuer or any of its Restricted Subsidiaries;

 

(2)           make loans or advances to the Issuer or any of its Restricted Subsidiaries; or

 

(3)           transfer any of its properties or assets to the Issuer or any of its Restricted Subsidiaries.

 

However, the preceding restrictions will not apply to encumbrances or restrictions:

 

(1)           existing under, by reason of or with respect to the ABL Documents, Indebtedness existing on the Issue Date, or any other agreements in effect on the date of the indenture and any amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings thereof; provided that the encumbrances and restrictions in any such amendments, modifications, restatements, 

 

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renewals, extensions, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, than those in effect on the date of the indenture;

 

(2)           existing under, by reason of or with respect to any other Credit Facility of the Issuer permitted under the indenture; provided that the applicable encumbrances and restrictions contained in the agreement or agreements governing the other Credit Facility are not materially more restrictive, taken as a whole, than those contained in the ABL Credit Facility (with respect to other credit agreements) or the indenture (with respect to other indentures), in each case as in effect on the date of the indenture;

 

(3)           existing under, by reason of or with respect to applicable law, rule, regulation or administrative or court order;

 

(4)           with respect to any Person or the property or assets of a Person acquired by the Issuer or any of its Restricted Subsidiaries existing at the time of such acquisition and not incurred in connection with or in contemplation of such acquisition, which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired and any amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings thereof; provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacement or refinancings are entered into in the ordinary course of business or not materially more restrictive, taken as a whole, than those contained in the ABL Credit Facility, the indenture, Indebtedness existing on the Issue Date or such other agreements as in effect on the date of the acquisition;

 

(5)           in the case of the provision described in clause (3) of the first paragraph of this covenant:

 

(a)           that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset,

 

(b)           existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Issuer or any Restricted Subsidiary thereof not otherwise prohibited by the indenture,

 

(c)           existing under, by reason of or with respect to (i) purchase money obligations for property acquired in the ordinary course of business or (ii) capital leases or operating leases that impose encumbrances or restrictions on the property so acquired or covered thereby, or

 

(d)           arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Issuer or any Restricted Subsidiary thereof in any manner material to the Issuer or any Restricted Subsidiary thereof;

 

(6)           existing under, by reason of or with respect to customary provisions in joint venture, operating or similar agreements, asset sale agreements and stock sale agreements arising in connection with the entering into of such transactions;

 

(7)           existing under, by reason of or with respect to any agreement for the sale or other disposition of some or all of the Capital Stock of, or any property and assets of, a Restricted Subsidiary that restricted distributions by that Restricted Subsidiary pending the closing of such sale or other disposition;

 

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(8)           existing under, by reason of or with respect to Permitted Refinancing Indebtedness; provided that the encumbrances and restrictions contained in the agreements governing that Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(9)           restricting cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(10)         existing under, by reason of or with respect to customary provisions contained in leases or licenses of intellectual property and other agreements, in each case, entered into in the ordinary course of business;

 

(11)         existing under, by reason of or with respect to (a) the indenture, the notes (and any additional notes), the Note Guarantees and the security documents (including any exchange notes or exchange guarantees issued pursuant to the Registration Rights Agreement), (b) the Senior Unsecured Loan and the documents related thereto, (c) the Intercreditor Agreements or (d) any amendments, supplements, modifications, restatements, replacements, renewals, refundings, restructurings, increases or refinancing of any of the foregoing;

 

(12)         existing under, by reason of or with respect to Indebtedness of the Issuer or a Restricted Subsidiary not prohibited to be incurred under the indenture; provided that (a) such encumbrances or restrictions are ordinary and customary in light of the type of Indebtedness being incurred and the jurisdiction of the obligor and (b) such encumbrances or restrictions will not affect in any material respect the Issuer’s or any Guarantor’s ability to make principal and interest payments on the notes, as determined in good faith by the Issuer;

 

(13)         consisting of customary restrictions pursuant to any Permitted Receivables Financing; and

 

(14)         existing under, by reason of or with respect to, any Notes Priority Debt.

 

For purposes of determining compliance with this covenant, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary of the Issuer to other Indebtedness incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

Merger, Consolidation or Sale of Assets

 

The Issuer will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Issuer is the surviving corporation) or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties and assets of the Issuer and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person or Persons, unless:

 

(1)           either: (a) the Issuer is the surviving corporation; or (b) the Person formed by or surviving such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, conveyance, lease or other disposition shall have been made (i) is a corporation, limited liability company, partnership (including a limited partnership) or trust organized or existing under the laws of the United States, any state or territory thereof or 

 

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the District of Columbia (provided that if such Person is not a corporation, (A) a corporate Wholly Owned Restricted Subsidiary of such Person organized or existing under the laws of the United States, any state or territory thereof or the District of Columbia, or (B) a corporation of which such Person is a Wholly Owned Restricted Subsidiary organized or existing under the laws of the United States, any state or territory thereof or the District of Columbia, is a co-issuer of the notes or becomes a co-issuer of the notes in connection therewith) and (ii) assumes all the obligations of the Issuer under the notes, the indenture and the security documents related to the notes pursuant to agreements reasonably satisfactory to the Trustee;

 

(2)           immediately after giving effect to such transaction no Event of Default exists;

 

(3)           immediately after giving effect to such transaction and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, on a pro forma basis, either (a) the Issuer or the Person formed by or surviving any such consolidation or merger (if other than the Issuer) would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; or (b) the Fixed Coverage Ratio for the Issuer or the Person formed by or surviving any such consolidation or merger (if other than the Issuer) would be greater than immediately prior to such transactions;

 

(4)           each Guarantor, unless such Guarantor is the Person with which the Issuer has entered into a transaction under the covenant described under the caption “—Merger, Consolidation or Sale of Assets,” shall have by amendment to its Note Guarantee confirmed that its Note Guarantee shall apply to the obligations of the Issuer or the surviving Person in accordance with the notes and the indenture; and

 

(5)           at the time of the transaction the Issuer will have delivered, or caused to be delivered, to the Trustee an Officers’ Certificate and opinion of counsel, each to the effect that such merger, consolidation or sale of assets comply with the indenture.

 

The provision described in clause (3) of the immediately preceding paragraph will not apply to (a) any merger, consolidation or sale, assignment, lease, transfer, conveyance or other disposition of assets between or among the Issuer, any of its Restricted Subsidiaries and/or any of the Guarantors or (b) any merger between the Issuer and an Affiliate of the Issuer, or between a Restricted Subsidiary and an Affiliate of the Issuer, in each case in this clause (b) solely for the purpose of reincorporating the Issuer or such Restricted Subsidiary, as the case may be, in the United States, any state thereof, the District of Columbia or any territory thereof, so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

 

Transactions with Affiliates

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, conduct any business or enter into or permit to exist any transaction or series of related transactions (including, but not limited to, the purchase, sale or exchange of property, the making of any Investment, the giving of any Guarantee or the rendering of any service) with any Affiliate of the Issuer or any Restricted Subsidiary involving consideration in excess 

 

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of $3.0 million other than transactions solely among any of the Issuer and its Restricted Subsidiaries (an “Affiliate Transaction”), unless:

 

(i)            such business, transaction or series of related transactions is on terms no less favorable, taken as a whole, to the Issuer or such Restricted Subsidiary than those that could be obtained in a comparable arm’s-length transaction with an unaffiliated party; and

 

(ii)           with respect to any Affiliate Transaction involving an amount or having a value in excess of $10.0 million the Issuer delivers to the Trustee an Officers’ Certificate stating that such business, transaction or series of related transactions complies with clause (i) above.

 

In the case of an Affiliate Transaction involving an amount or having a value in excess of $20.0 million, the Issuer must obtain a resolution of the Board of Directors of Parent set forth in an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this covenant and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the disinterested members of Parent’s Board of Directors. In the case of an Affiliate Transaction involving an amount or having a value in excess of $40.0 million, the Issuer must obtain a written opinion of a nationally recognized investment banking, accounting or appraisal firm stating that the transaction (or relevant purchase price or valuation) is fair to the Issuer or such Restricted Subsidiary from a financial point of view.

 

The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

 

(1)           transactions between or among the Issuer, its Restricted Subsidiaries, and/or any Guarantors;

 

(2)           payment of reasonable fees and compensation to, and indemnification and similar arrangements on behalf of, current, former or future directors of Parent, any other direct or indirect parent of the Issuer, the Issuer or any Restricted Subsidiary of the Issuer;

 

(3)           Restricted Payments that are permitted by the provisions of the indenture described above under the caption “—Restricted Payments” or the definition of “Permitted Investments” (including any payments that are excluded from the definitions of “Restricted Payment” and “Restricted Investment”);

 

(4)           any sale of Equity Interests (other than Disqualified Stock) of the Issuer;

 

(5)           loans and advances to officers and employees of Parent, any other direct or indirect parent of the Issuer, the Issuer or any of the Issuer’s Restricted Subsidiaries or guarantees in respect thereof or otherwise made on the Issuer’s or any of its Restricted Subsidiaries’ behalf (or the cancellation of such loans, advances or guarantees), in both cases for bona fide business purposes in the ordinary course of business;

 

(6)           any employment, consulting, service or termination agreement, or customary indemnification arrangements, entered into by the Issuer or any of its Restricted Subsidiaries or Parent with current, former or future officers and employees of Parent, any direct or indirect parent of the Issuer, the Issuer or any of its Restricted Subsidiaries and the payment of compensation to officers and employees of Parent, any direct or indirect parent of the Issuer, the Issuer or any of its Restricted Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), in each case in the ordinary course of business;

 

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(7)           transactions with a Person that is an Affiliate of the Issuer solely because the Issuer, directly or indirectly, owns Equity Interests in, or controls, such Person;

 

(8)           any contracts, instruments or other agreements or arrangements in each case as in effect on the date of the indenture, and any transactions pursuant thereto or contemplated thereby, or any amendment, modification or supplement thereto or any replacement thereof entered into from time to time, as long as such agreement or arrangement as so amended, modified, supplemented or replaced, taken as a whole, is not materially more disadvantageous to the Issuer and its Restricted Subsidiaries at the time executed than the original agreement or arrangement as in effect on the date of the indenture;

 

(9)           any Guarantee by Parent or any other direct or indirect parent of the Issuer of Indebtedness or other liabilities or obligations of the Issuer or any Guarantor that was permitted by the indenture;

 

(10)         transactions with Affiliates solely in their capacity as holders of Indebtedness or Equity Interests of the Issuer or any of its Subsidiaries, so long as such transaction is with all holders of such class (and there are such non-Affiliate holders) and such Affiliates are treated no more favorably than all other holders of such class generally;

 

(11)         transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services (including pursuant to joint venture agreements) in the ordinary course of business on terms not materially less favorable as might reasonably have been obtained at such time from a Person that is not an Affiliate of the Issuer, as determined in good faith by Parent or the Issuer;

 

(12)         transactions in which the Issuer or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an independent financial advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of prong (i) of the previous paragraph of this covenant;

 

(13)         any contribution to the common equity capital of the Issuer;

 

(14)         any transaction with any Person who is not an Affiliate immediately before the consummation of such transaction that becomes an Affiliate as a result of such transaction;

 

(15)         the pledge of Equity Interests of any Unrestricted Subsidiary;

 

(16)         subject to the limitations described under clause (12)(b) of paragraph (B) under the covenant “—Restricted Payments,” payments by the Issuer (or Parent or any other direct or indirect parent of the Issuer) or any of the Restricted Subsidiaries pursuant to any tax sharing, allocation or similar agreement;

 

(17)         the incurrence of the Senior Unsecured Loan, the execution, delivery and performance under any document related to the Senior Unsecured Loan and any amendment, modification, refinancing, restructuring or replacement thereof;

 

(18)         the use of proceeds of the notes and the Senior Unsecured Loan to repay the Issuer’s outstanding indebtedness as described in this offering memorandum under “Use of Proceeds”;

 

(19)         sales of accounts receivable, or participations therein, or any related transaction, in connection with any Permitted Receivables Financing;

 

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(20)         any agreement that provides customary registration rights to the equity holders of the Issuer or any direct or indirect parent of the Issuer and the performance by the parties thereto of their obligations, duties and rights under their obligations, duties and rights under such agreement, and any shareholders agreement (including but not limited to the Shareholders Agreement) among some or all of the shareholders of the Issuer or any direct or indirect parent of the Issuer and the performance by the parties thereto of such agreement;

 

(21)         Guarantees by Parent of Indebtedness or other liabilities or obligations of Foreign Subsidiaries, New US LLC 1 and/or New US LLC 2 that are permitted by the indenture; and

 

(22)         transactions between the Issuer or any Restricted Subsidiary, on the one hand, and any person that is an Affiliate of the Issuer or any Restricted Subsidiary, on the other hand, solely because a director of such Person is also a director of the Issuer or any direct or indirect parent of the Issuer.

 

Designation of Restricted and Unrestricted Subsidiaries

 

The Board of Directors of the Issuer or Parent may designate any Subsidiary (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary; provided that:

 

(1)           any Guarantee by the Issuer or any Restricted Subsidiary of the Issuer of any Indebtedness of the Subsidiary being so designated will be deemed to be an incurrence of Indebtedness by the Issuer or such Restricted Subsidiary (or both, if applicable) at the time of such designation, and such incurrence of Indebtedness would be permitted under the covenant described above under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

 

(2)           the aggregate fair market value of all outstanding Investments owned by the Issuer and its Restricted Subsidiaries in the Subsidiary being so designated (including any Guarantee by the Issuer or any Restricted Subsidiary of the Issuer of any Indebtedness of such Subsidiary) will be deemed to be an Investment made as of the time of such designation and that such Investment would be permitted under the covenant described above under the caption “—Certain Covenants—Restricted Payments”;

 

(3)           such Subsidiary does not own any Equity Interests of, or hold any Liens on any property of, the Issuer or any Restricted Subsidiary of the Issuer (other than Equity Interests of any Restricted Subsidiary of such Subsidiary that is concurrently being designated as an Unrestricted Subsidiary);

 

(4)           the Subsidiary being so designated, after giving effect to such designation:

 

(a)           is not party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer that would not be permitted under “—Certain Covenants—Transactions with Affiliates” after giving effect to the exceptions thereto;

 

(b)           is a Person with respect to which neither the Issuer nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results except to the extent permitted under “—Certain Covenants—Incurrence of Indebtedness and Issuance of

 

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Disqualified Stock and Preferred Stock” and “—Certain Covenants—Restricted Payments”; and

 

(c)           (i) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Issuer or any of its Restricted Subsidiaries, except to the extent such Guarantee or credit support would be released upon such designation or would be permitted under “—Certain Covenants—Restricted Payments” and (ii) to the extent the Indebtedness of the Subsidiary is non-recourse Indebtedness, any Guarantee or credit support by the Issuer or a Restricted Subsidiary would be permitted under “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Certain Covenants—Restricted Payments”; and

 

(5)           no Event of Default would be in existence following such designation.

 

Any designation of a Restricted Subsidiary of the Issuer as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Issuer or Parent giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by the indenture. If, at any time, any Unrestricted Subsidiary would fail to meet any of the preceding requirements described in clause (4) above, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness, Investments or Liens on the property of such Subsidiary shall be deemed to be incurred or made by a Restricted Subsidiary of the Issuer as of such date and, if such Indebtedness, Investments or Liens are not permitted to be incurred or made as of such date under the indenture, the Issuer shall be in default under the indenture.

 

The Board of Directors of the Issuer or Parent may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

 

(1)           such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if such Indebtedness is permitted under the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period;

 

(2)           all outstanding Investments owned by such Unrestricted Subsidiary will be deemed to be made as of the time of such designation and such Investments shall only be permitted if such Investments would be permitted under the covenant described above under the caption “—Certain Covenants—Restricted Payments”;

 

(3)           all Liens upon property or assets of such Unrestricted Subsidiary existing at the time of such designation would be permitted under the caption “—Certain Covenants—Liens”; and

 

(4)           no Default or Event of Default would be in existence following such designation.

 

Guarantees

 

If the Issuer or any of its Restricted Subsidiaries (a) acquires or creates another Wholly Owned Restricted Subsidiary (other than an Excluded Subsidiary) on or after the date of the indenture or (b) any Restricted Subsidiary of the Issuer becomes a guarantor of any indebtedness of the Issuer or any Subsidiary Guarantor or becomes an obligor with respect to

 

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the ABL Credit Facility, then, within 45 days of the date of such event, as applicable, such Subsidiary must become a Subsidiary Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee.

 

The Issuer will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee any other Indebtedness of the Issuer or any Guarantor (including, but not limited to, any Indebtedness under any Credit Facility) unless such subsidiary is a Guarantor or simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the notes by such Restricted Subsidiary, which Guarantee shall be senior in right of payment to or pari passu in right of payment with such Restricted Subsidiary’s Guarantee of such other Indebtedness.

 

This covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. In addition, in the event that any Wholly Owned Restricted Subsidiary that is an Excluded Subsidiary ceases to be an Excluded Subsidiary, or if any Excluded Subsidiary becomes a guarantor or obligor with respect to the ABL Credit Facility or any other Indebtedness of the Issuer or any Subsidiary Guarantor, then such Subsidiary must become a Subsidiary Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee within 45 days of the date of such event. The form of the Note Guarantee will be attached as an exhibit to the indenture.

 

A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Issuer or another Guarantor, unless:

 

(1)           immediately after giving effect to that transaction, no Default or Event of Default exists; and

 

(2)           either:

 

(a)           the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) (i) is organized or existing under the laws of the United States, any state thereof or the District of Columbia (provided that the provisions described in this clause (i) shall not apply if such Guarantor is organized under the laws of a jurisdiction other than the United States, any state thereof or the District of Columbia) and (ii) assumes all the obligations of that Guarantor under the indenture, its Note Guarantee and the security documents related to the notes pursuant to a supplemental indenture satisfactory to the Trustee; or

 

(b)           in the case of a Subsidiary Guarantor, such sale or other disposition or consolidation or merger complies with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

 

Notwithstanding the foregoing, any Guarantor may (i) merge with the Issuer or another Guarantor solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (ii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in clause (1) of the preceding paragraph.

 

The Note Guarantee of Parent or any other direct or indirect parent of the Issuer will automatically and unconditionally be released without the need for any further action by any

 

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party upon written notice from the Issuer to the Trustee (1) if such entity is not a guarantor of any other Indebtedness of the Issuer or any other Guarantor, or (2) if such Guarantor merges or consolidates with, or transfers all or substantially all of its assets to, the Issuer to another Guarantor, or (3) upon Legal Defeasance or Covenant Defeasance of the notes or (4) upon a satisfaction and discharge of the indenture.

 

The Note Guarantee of a Subsidiary Guarantor will automatically and unconditionally be released without the need for any action by any party:

 

(1)           in connection with any sale or other disposition of Capital Stock of a Subsidiary Guarantor (including by way of consolidation or merger or otherwise) to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Issuer, such that, immediately after giving effect to such transaction, such Guarantor would no longer constitute a Subsidiary of the Issuer, if the sale of such Capital Stock of that Subsidiary Guarantor complies with the covenants described above under the caption “—Repurchase at the Option of Holders—Asset Sales” and “—Certain Covenants—Restricted Payments”;

 

(2)           in connection with the merger or consolidation of a Subsidiary Guarantor with the Issuer or any other Subsidiary Guarantor;

 

(3)           in the event of the release of the guarantee under the ABL Credit Facility of a Subsidiary Guarantor that is not (a) a Wholly Owned Restricted Subsidiary (other than a Excluded Subsidiary) or (b) a Restricted Subsidiary that guarantees or is an obligor with respect to Indebtedness of the Issuer or any Subsidiary Guarantor;

 

(4)           if the Issuer properly designates any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary under the indenture;

 

(5)           upon the Legal Defeasance or Covenant Defeasance or satisfaction and discharge of the indenture;

 

(6)           solely in the case of a Note Guarantee created pursuant to the provision described in clause (b) of the first paragraph or the second paragraph under the caption “—Guarantees,” upon the release or discharge of the Guarantee which resulted in the creation of such Note Guarantee pursuant to the covenant described under the caption “—Guarantees,” except a discharge or release by or as a result of payment under such Guarantee; or

 

(7)           upon a liquidation or dissolution of a Subsidiary Guarantor permitted under the indenture.

 

In addition, the Note Guarantee of any Subsidiary Guarantor will be released in connection with a sale of all or substantially all of the assets of such Subsidiary Guarantor in a transaction that complies with the conditions in the fourth paragraph under the caption “—Guarantees” above. Also, notwithstanding any other provision in the indenture, any Guarantor may be liquidated at any time, so long as all assets owned by such entity which constitute Collateral remain Collateral owned by the Issuer or a Guarantor following any such liquidation. Upon the release of a Guarantee in accordance with the terms of the indenture, all Collateral owned by the related Guarantor will also be automatically released.

 

Reports

 

Whether or not the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any notes are outstanding, the Issuer will furnish to the

 

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holders of notes or cause the Trustee to furnish to the holders of notes or post on its website or file with the Commission:

 

(1)           all quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if the Issuer were required to file such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Issuer’s certified independent accountants, which reports shall be filed within the time period specified in the Commission’s rules and regulations; and

 

(2)           as soon as practicable, and in any event within the time periods specified in the Commission’s rules and regulations, all current reports that would be required to be filed with the Commission on Form 8-K if the Issuer were required to file such reports;

 

provided, however, that if the last day of any such time period is not a business day, such report will be due on the next succeeding business day. All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports, except that such reports (a) will not be required to contain separate financial information for Subsidiary Guarantors or Subsidiaries whose securities are pledged to secure the notes that would be required under Rule 3-16 of Regulation S-X promulgated by the Commission and (b) will not be subject to the Trust Indenture Act.

 

In addition, whether or not required by the Commission, after the consummation of the exchange offer or the effectiveness of a shelf registration statement, the Issuer will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission’s rules and regulations (unless the Commission will not accept such a filing) for a filer that is a “non-accelerated filer” (as defined in such rules and regulations).

 

Notwithstanding the foregoing, prior to the consummation of the exchange offer or the effectiveness of a shelf registration statement, the Issuer’s reports referred to in clauses (1) and (2) above will not be required to (a) comply with the requirements of Rule 3-10 of Regulation S-X promulgated by the Commission, (b) include a report from management or an auditor’s attestation report as to the Issuer’s internal control over financial reporting that would be required pursuant to Section 404 of the Sarbanes- Oxley Act of 2002, as amended, or the certifications from the Issuer’s chief executive officer and chief financial officer that would be required by Sections 302 or 906 of the Sarbanes Oxley Act of 2002, as amended or (c) contain the disclosure that would be required to be filed with the Commission pursuant to Item 5.02(e) of Form 8-K.

 

The Issuer or Parent will also hold a quarterly conference call to discuss such financial information. Prior to the conference call, the Issuer or Parent shall issue a press release to the appropriate wire services announcing the time and date of such conference call and, unless the call is to be open to the public, direct Holders of Notes, securities analysts and prospective investors to contact the office of the Issuer’s chief financial officer to obtain access. If Parent or the Issuer is holding a conference call open to the public to discuss the most recent quarter’s financial performance, Parent and the Issuer will not be required to hold a second, separate call just for the holders of the notes.

 

The Issuer or Parent will maintain a public or non-public website on which Holders of Notes, prospective investors and securities analysts are given access to the quarterly and annual financial information and details of the quarterly conference call described above. If the website containing the financial reports is not available to the public, the Issuer or Parent will direct Holders of Notes, prospective investors and securities analysts on its publicly

 

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available website to contact the Issuer’s chief financial officer to obtain access to the non-public website. If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraphs will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto or elsewhere in the quarterly or annual reports and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer.

 

If Parent or any other direct or indirect Parent of the Issuer or any successor thereto files reports with the Commission in accordance with Section 13 of 15(d) of the Exchange Act, whether voluntarily or otherwise, in compliance with the time periods specified in the first paragraph hereof, then the Issuer shall be deemed to comply with this covenant; provided that the same are accompanied by consolidating information as required by Rule 3-10 of Regulation S-X (or any successor provision). If Parent enters into a merger or consolidation transaction with a person that continues to file reports with the Commission in accordance with Section 13 of 15(d) of the Exchange Act, whether voluntarily or otherwise, then the Issuer shall be deemed to comply with this covenant; provided that the same are accompanied by consolidating information as required by Rule 3-10 of Regulation S-X (or any successor provision).

 

In addition, the Issuer and the Guarantors agree that, for so long as any notes remain outstanding, if at any time they are not required to file with the Commission the reports required by the preceding paragraphs, they will furnish to the holders of notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its agreements set forth under this covenant for purposes of clause (4) under “Events of Default and Remedies” until 30 days after the date any report required to be provided by this covenant is due, and any failure to comply with this covenant shall be automatically cured when the Issuer or Parent provides all required reports to the noteholders or files all required reports with the Commission.

 

Events of Default and Remedies

 

Each of the following is an “Event of Default”:

 

(1)           default for 30 consecutive days in the payment when due of interest on the notes;

 

(2)           default in payment when due (whether at maturity, upon acceleration, redemption or otherwise) of the principal of, or premium, if any, on the notes;

 

(3)           failure by the Issuer or any of its Restricted Subsidiaries to comply with the provisions described under the captions “—Repurchase at the Option of Holders—Change of Control,” “—Repurchase at the Option of Holders—Asset Sales” or “—Certain Covenants—Merger, Consolidation or Sale of Assets” or the provisions described in the third paragraph under the caption “—Certain Covenants—Guarantees” for 30 days after written notice by the Trustee or holders representing 25% or more of the aggregate principal amount of notes outstanding;

 

(4)           failure by the Issuer or any of its Restricted Subsidiaries for 60 days after written notice by the Trustee or holders representing 25% or more of the aggregate principal amount of notes outstanding to comply with any of the agreements in the indenture or

 

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the security documents for the benefit of the holders of the notes other than those referred to in clauses (1)-(3) above;

 

(5)           default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of the Issuer’s Significant Subsidiaries (or any group of Restricted Subsidiaries of the Issuer that together would constitute a Significant Subsidiary of the Issuer), or the payment of which is guaranteed by the Issuer or any of the Issuer’s Significant Subsidiaries (or any group of Restricted Subsidiaries of the Issuer that together would constitute a Significant Subsidiary of the Issuer), whether such Indebtedness or Guarantee now exists, or is created after the date of the indenture, if that default:

 

(a)           is caused by a failure to make any payment when due at the final maturity of such Indebtedness (after giving effect to any applicable grace period) (a “Payment Default”); or

 

(b)           results in the acceleration of such Indebtedness prior to its express maturity,

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $30.0 million or more;

 

(6)           failure by the Issuer or any of the Issuer’s Significant Subsidiaries (or any group of Restricted Subsidiaries of the Issuer that together would constitute a Significant Subsidiary of the Issuer) to pay non-appealable final judgments aggregating in excess of $30.0 million (excluding amounts covered by insurance or bonded) which judgments are not paid, discharged or stayed for a period of more than 60 days after such judgments have become final and non-appealable and, in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

 

(7)           the occurrence of any of the following:

 

(a)           any security document for the benefit of holders of the notes is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect in any material respect, other than in accordance with the terms of the relevant security documents; or

 

(b)           except as permitted by the indenture, any first priority Lien for the benefit of holders of the notes purported to be granted under any security document for the benefit of holders of the notes on Collateral, individually or in the aggregate, having a fair market value in excess of $30.0 million ceases to be an enforceable and perfected first priority Lien in any material respect, subject only to Permitted Liens, and such condition continues for 60 days after written notice by the Trustee or the Collateral Trustee of failure to comply with such requirement; provided that it will not be an Event of Default under this clause 7(b) if such condition results from the action or inaction of the Trustee or the Collateral Trustee; or

 

(c)           the Issuer or any Significant Subsidiary that is a Subsidiary Guarantor (or any such Subsidiary Guarantors that together would constitute a Significant Subsidiary), or any Person acting on behalf of any of them, denies or disaffirms, in writing, any material obligation of the Issuer or such Significant Subsidiary that is a Guarantor (or such Subsidiary Guarantors that together constitute a Significant Subsidiary) set forth in or arising under any security document for the benefit of holders of the notes;

 

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(8)           except as permitted by the indenture, any Note Guarantee of a Subsidiary Guarantor that is a Significant Subsidiary of the Issuer (or any such Subsidiary Guarantors that together would constitute a Significant Subsidiary) shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect in any material respect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm in writing its obligations under its Note Guarantee if, and only if, in each such case, such Default continues for 21 days after notice of such Default shall have been given to the Trustee; and

 

(9)           certain events of bankruptcy or insolvency with respect to the Issuer or any Significant Subsidiary of the Issuer (or any Restricted Subsidiaries of the Issuer that together would constitute a Significant Subsidiary).

 

In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Issuer or any Significant Subsidiary of the Issuer (or any group of Restricted Subsidiaries of the Issuer that, taken together, would constitute a Significant Subsidiary), all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding notes may declare all the notes to be due and payable immediately by notice in writing to the Issuer specifying the Event of Default(s).

 

Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the notes notice of any Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or premium, if any) if it determines that withholding notice is in their interest. In addition, the Trustee shall have no obligation to accelerate the notes if in the best judgment of the Trustee acceleration is not in the best interest of the holders of the notes.

 

In the event of any Event of Default specified in clause (5) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders, if within 20 days after such Event of Default arose:

 

(1)           the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

 

(2)           the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

 

(3)           the default that is the basis for such Event of Default has been cured.

 

The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the Trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the indenture or the security documents except a continuing Default or Event of Default in the payment of interest on, premium, if any, on, or the principal of, the notes and may rescind any acceleration with respect to the notes and its consequences (provided such rescission would not conflict with any judgment of a court of competent jurisdiction). No such rescission shall affect any subsequent default or impair any right consequent thereon. The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee.

 

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However, the Trustee may refuse to follow any direction that conflicts with law or the indenture, that may involve the Trustee in personal liability, or that may be unduly prejudicial to the rights of holders of notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of notes.

 

The Issuer is required to deliver to the Trustee annually within 120 days after the end of each fiscal year a statement regarding compliance with the indenture. Within 30 days of becoming aware of any Default or Event of Default, the Issuer is required to deliver to the Trustee a statement specifying such Default or Event of Default unless such Default or Event of Default has been cured before the end of the 30-day period.

 

In addition to acceleration of maturity of the notes, if an Event of Default occurs and is continuing, the Trustee, the Collateral Trustee and/or the holders of the notes will have the right to exercise remedies with respect to the Collateral, such as foreclosure, as are available under the indenture, the security documents and at law, subject to the terms of the Intercreditor Agreements.

 

No Personal Liability of Directors, Officers, Employees, Incorporators and Stockholders

 

No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor, as such, or of Parent or any other direct or indirect parent of the Issuer, shall have any liability for any obligations of the Issuer or any Guarantor under the notes, the indenture, the Note Guarantees or the note documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

 

Legal Defeasance and Covenant Defeasance

 

The Issuer may, at its option and at any time, elect to have all of the obligations of the Issuer discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Note Guarantees (“Legal Defeasance”) and cure all then existing Events of Default except for:

 

(1)           the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium on such notes when such payments are due from the trust referred to below;

 

(2)           the Issuer’s obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

 

(3)           the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s and the Guarantors’ obligations in connection therewith;

 

(4)           the Legal Defeasance provisions of the indenture; and

 

(5)           the optional redemption provisions of the indenture to the extent that Legal Defeasance is to be effected together with a redemption.

 

In addition, the Issuer may, at its option and at any time, elect to have the obligations of the Issuer and the Guarantors released with respect to certain covenants that are described in the indenture (“Covenant Defeasance”) and thereafter any omission to comply with those

 

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covenants shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “Events of Default and Remedies” will no longer constitute Events of Default with respect to the notes.

 

In order to exercise either Legal Defeasance or Covenant Defeasance:

 

(1)           the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, a nationally recognized investment bank or a nationally recognized appraisal or valuation firm, to pay the principal of, or interest and premium on the outstanding notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Issuer must specify whether the notes are being defeased to maturity or to a particular redemption date;

 

(2)           in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, (a) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the beneficial owners of the outstanding notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(3)           in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the beneficial owners of the outstanding notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(4)           no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from borrowing funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

 

(5)           such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the indenture) to which the Issuer or any of its respective Subsidiaries are parties or by which the Issuer or any of its respective Subsidiaries are bound (other than that resulting with respect to any Indebtedness being defeased from any borrowing of funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to such Indebtedness, and the granting of Liens in connection therewith);

 

(6)           the Issuer must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuer with the intent of preferring the holders of notes over the other creditors of the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or others;

 

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(7)           if the notes are to be redeemed prior to their Stated Maturity, the Issuer must deliver to the Trustee irrevocable instructions to redeem all of the notes on the specified redemption date; and

 

(8)           the Issuer must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

The Collateral will be released from the Lien securing the notes, as provided under the caption “—Security—Collateral trust and notes priority intercreditor agreement—Release and Subordination of Liens on Collateral,” upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions described above.

 

Amendment, Supplement and Waiver

 

Except as provided in the next three succeeding paragraphs, the indenture, the notes, the Note Guarantees, the security documents relating to the notes and the Intercreditor Agreements relating to the notes (subject to compliance with the applicable Intercreditor Agreements) may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing Default or Event of Default or compliance with any provision of the indenture, the notes, the Note Guarantees, the security documents or the Intercreditor Agreements relating to the notes may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).

 

Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):

 

(1)           reduce the percentage of the aggregate principal amount of notes whose holders must consent to an amendment, supplement or waiver;

 

(2)           reduce the principal of, or change the Stated Maturity of, any note or alter the provisions, or waive any payment, with respect to the redemption of such notes (other than provisions relating to the covenants described under “—Repurchase at the Option of Holders” (except to the extent provided in clause (9) below));

 

(3)           reduce the rate of, or change the time for, payment of interest on any note;

 

(4)           waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);

 

(5)           make any note payable in money other than U.S. dollars;

 

(6)           make any change in the provisions of the indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of, or interest or premium, if any, on the notes;

 

(7)           release any Guarantor from any of its obligations under its Note Guarantee or the indenture, except in accordance with the terms of the indenture or the Note Guarantees;

 

(8)           impair the right of any holder to institute suit for the enforcement of any payment on or with respect to such holder’s notes or the Note Guarantees;

 

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(9)           amend, change or modify the obligation of the Issuer to make and consummate an Asset Sale Offer with respect to any Asset Sale in accordance with the covenant described under the caption “—Repurchase at the Option of Holders—Asset Sales” after the obligation to make such Asset Sale Offer has arisen or the obligation of the Issuer to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with the covenant described under the caption “—Repurchase at the Option of Holders—Change of Control” after such Change of Control has occurred, including, in each case, amending, changing or modifying any definition relating thereto; or

 

(10)         make any change in the amendment and waiver provisions, except to increase any such percentage required for such actions or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each outstanding note affected thereby.

 

In addition, any amendment to, or waiver of, the provisions of the indenture or any security document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the notes will require the consent of the holders of at least 662/3% in aggregate principal amount of the notes then outstanding (but only to the extent any such consent is required under the Intercreditor Agreements).

 

Notwithstanding the preceding, without notice to or the consent of any holder of notes, the Issuer, the Guarantors and the Trustee may amend or supplement the indenture, the notes, the Note Guarantees or the security documents relating to the notes or the Intercreditor Agreements to:

 

(1)           cure any ambiguity, omission, mistake, defect or inconsistency;

 

(2)           provide for uncertificated notes in addition to or in place of certificated notes;

 

(3)           provide for the assumption of the Issuer’s or any Guarantor’s obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of the Issuer’s or such Guarantor’s assets;

 

(4)           make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights of such holder under the indenture in any material respect;

 

(5)           comply with requirements of the Commission in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;

 

(6)           comply with the provisions described under “—Certain Covenants—Guarantees”;

 

(7)           conform the text of the indenture, the notes, the Note Guarantees or any security document to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of the indenture, the notes, the Note Guarantees or any security document;

 

(8)           evidence and provide for the acceptance of appointment by a successor trustee, provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of the indenture, or evidence and provide for a successor or replacement Collateral Trustee under the security documents;

 

(9)           provide for the issuance of additional notes and related guarantees (and the grant of security for the benefit of the additional notes and related guarantees) in accordance with the terms of the indenture and the Collateral Trust and Notes Priority Intercreditor Agreement;

 

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(10)         make, complete or confirm any grant of Collateral permitted or required by the indenture or any of the security documents or any release, termination or discharge of Collateral that becomes effective as set forth in the indenture or any of the security documents;

 

(11)         grant any Lien for the benefit of the holders of any future Subordinated Lien Debt or any present or future ABL Debt or Notes Priority Debt in accordance with the terms of the indenture and the Collateral Trust and Notes Priority Intercreditor Agreement;

 

(12)         add additional secured parties to the extent Liens securing obligations held by such parties are permitted under the indenture;

 

(13)         mortgage, pledge, hypothecate or grant a security interest in favor of the Collateral Trustee for the benefit of the Trustee and the holders of the notes as additional security for the payment and performance of the Issuer’s and any Guarantor’s obligations under the indenture, in any property, or assets, including any of which are required to be mortgaged, pledged or hypothecated, or in which a security interest is required to be granted to the Trustee or the Collateral Trustee in accordance with the terms of the indenture or otherwise;

 

(14)         provide for the succession of any parties to the security documents (and other amendments that are administrative or ministerial in nature) in connection with an amendment, renewal, extension, substitution, refinancing, restructuring, replacement, supplementing or other modification from time to time of any agreement in accordance with the terms of the indenture and the relevant security document;

 

(15)         provide for a reduction in the minimum denominations of the notes;

 

(16)         add a Guarantor or other guarantor under the indenture or release a Guarantor in accordance with the terms of the indenture;

 

(17)         add covenants for the benefit of the holders or surrender any right or power conferred upon either Issuer or any Guarantor;

 

(18)         make any amendment to the provisions of the indenture relating to the transfer and legending of notes as permitted by the indenture, including, without limitation, to facilitate the issuance and administration of the notes, provided that compliance with the indenture as so amended may not result in notes being transferred in violation of the Securities Act or any applicable securities laws;

 

(19)         provide for the assumption by one or more successors of the obligations of any of the Guarantors under the indenture and the Note Guarantees;

 

(20)         provide for the issuance of exchange notes and related guarantees in accordance with the terms of the indenture;

 

(21)         comply with the rules of any applicable securities depositary; and

 

(22)         make any changes that do not affect the legal rights of the holders of notes in any material respect in order to facilitate entry into any of the Intercreditor Agreements.

 

The consent of the holders of the notes is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if the consent approves the substance of the proposed amendment.

 

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Satisfaction and Discharge

 

The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:

 

(1)           either:

 

(a)           all notes that have been authenticated (except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation; or

 

(b)           all notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

 

(2)           no Default or Event of Default shall have occurred and be continuing (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to the indenture and the notes issued thereunder on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than any such default resulting from any borrowing of funds to be applied to make the deposit and any similar simultaneous deposit relating to other Indebtedness, and the granting of Liens in connection therewith);

 

(3)           the Issuer has or any Guarantor has paid or caused to be paid all sums payable by it under the indenture and not provided for by the deposit required by clause 1(b) above; and

 

(4)           the Issuer has delivered irrevocable instructions to the Trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the redemption date, as the case may be.

 

In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

 

The Collateral will be released from the Lien securing the notes, as provided under the caption “—Security—Collateral Trust and Notes Priority Intercreditor Agreement—Release of Liens on Collateral,” upon a satisfaction and discharge in accordance with the provisions described above.

 

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Concerning the Trustee

 

Wells Fargo Bank, National Association will be the Trustee under the indenture and will be appointed by the Issuer as paying agent and registrar with respect to the notes.

 

If the Trustee becomes a creditor of the Issuer or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

 

The indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of such person’s own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless such holder shall have offered to the Trustee security, indemnity or prefunding satisfactory to it against any loss, liability or expense.

 

The notes offered hereby have not been registered with the Commission and, accordingly, the Trust Indenture Act will not be applicable to the indenture governing the notes until such notes are registered with the Commission.

 

Certain Definitions

 

Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

 

“ABL Bank Products” means any bank products agreements entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.

 

“ABL Cash Management Agreements” means any cash management agreements entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.

 

“ABL Collateral Agent” means any collateral agent, collateral trustee or other representative of lenders or holders of ABL Obligations party to the General Intercreditor Agreement or upon the refinancing or replacement of the ABL Credit Facility, or any successor representative acting in such capacity.

 

“ABL Credit Facility” means that certain Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement, to be dated as of March 18, 2011, among the borrowers and guarantors named therein (which may include the Issuer and the Guarantors as borrower, co-borrower, guarantor, obligor, co-obligor or otherwise), the lenders and agents from time to time party thereto, and Regions Bank, as administrative agent, and any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as further amended, restated, adjusted, waived, renewed, modified, refunded, replaced, restated, restructured, increased, supplemented or refinanced in whole or in part from time to time, regardless of whether such amendment, restatement, adjustment, waiver, modification, renewal, refunding, replacement, restatement, restructuring, increase, supplement or refinancing is with the same financial institutions (whether as agents or lenders) or otherwise and any one or more indentures, note purchase agreements, credit facilities, commercial paper facilities, or other financing arrangements or agreements that replace, refund or refinance all or any part of the loans, notes, or other commitments

 

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thereunder, including any such replacement, refunding or refinancing facility or indenture or other financing arrangements or agreements that increases the amount borrowable or issuable thereunder or alters the maturity thereof.

 

“ABL Debt” means Indebtedness under the ABL Credit Facility, the ABL Documents, the ABL Bank Products, the ABL Hedge Agreements and the ABL Cash Management Agreements.

 

“ABL Documents” means the ABL Credit Facility, any additional credit agreement, note purchase agreement, indenture or other agreement related thereto and all other loan or note documents, collateral or security documents, notes, guarantees, instruments and agreements governing or evidencing, or executed or delivered in connection with, the ABL Credit Facility, including the ABL Bank Products, the ABL Hedge Agreements and the ABL Cash Management Agreements, as such agreements or instruments may be amended, supplemented, modified, restated, replaced, renewed, refunded, restructured, increased or refinanced from time to time (including successive amendments, supplements, modifications, restatements, replacements, renewals, refundings, restructurings, increases and refinancings).

 

“ABL Hedge Agreements” means any hedge agreements entered into with any lender under the ABL Credit Facility, its Affiliates or any other person permitted under the ABL Credit Facility.

 

“ABL Obligations” means all indebtedness, liabilities and obligations (of every kind or nature) incurred or arising under or relating to the ABL Documents and all other obligations in respect thereof.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)           Indebtedness of any other Person existing at the time such other Person is merged with or into, or becomes a Subsidiary of, such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and

 

(2)           Indebtedness secured by a Lien encumbering any asset acquired by the specified Person.

 

“Act of Required Notes Priority Debtholders” means, as to any matter, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of Notes Priority Debt representing the Required Notes Priority Debtholders.

 

For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, the Issuer or any Affiliate of the Issuer will be deemed not to be outstanding, and (b) votes will be determined in accordance with the provisions described above under the caption “—Security—Collateral Trust and Notes Priority Intercreditor Agreement—Voting.”

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.

 

“After Acquired Property” means any and all assets or property (other than Excluded Assets) acquired after the date of the indenture which constitute Collateral.

 

“Applicable Premium” means, with respect to any note on any redemption date, the greater of:

 

(1)           1.0% of the principal amount of the note; or

 

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(2)           the excess of:

 

(a)           the present value at such redemption date of (i) the redemption price of the note at April 1, 2013 (such redemption price being set forth in the table appearing above under the caption “—Optional Redemption”), plus (ii) all required interest payments due on the note through April 1, 2013 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

 

(b)           the principal amount of the note.

 

“Asset Sale” means:

 

(1)           the sale, lease (other than operating leases in the ordinary course of business), conveyance or other disposition of any property or assets, other than Equity Interests of the Issuer; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer and the Issuer’s Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption “—Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets” and not by the provisions of the covenant described under the caption “—Repurchase at the Option of Holders—Asset Sales”;

 

(2)           the issuance of Equity Interests by any of the Issuer’s Restricted Subsidiaries or the sale by the Issuer or any Restricted Subsidiary thereof of Equity Interests in any of its Restricted Subsidiaries (other than directors’ qualifying shares); and

 

(3)           an Event of Loss.

 

Notwithstanding the preceding, the following items shall be deemed not to be Asset Sales:

 

(1)           any single transaction or series of related transactions or Event of Loss that involves property or assets having a fair market value of less than $5.0 million;

 

(2)           a transfer of property or assets between or among the Issuer, its Restricted Subsidiaries and any Guarantor;

 

(3)           an issuance of Equity Interests by a Restricted Subsidiary of the Issuer to the Issuer or to another Restricted Subsidiary thereof;

 

(4)           the sale, lease, assignment, license or sublease of equipment, inventory, accounts receivable or other assets in the ordinary course of business (including, without limitation, any Collateral);

 

(5)           the sale or other disposition of cash or Cash Equivalents;

 

(6)           a Restricted Payment that is permitted by the covenant described above under the caption “—Certain Covenants—Restricted Payments” or a Permitted Investment;

 

(7)           any sale, exchange or other disposition of any property or equipment that has become damaged, worn out, obsolete or otherwise unsuitable or unnecessary for use in connection with the business of the Issuer or its Restricted Subsidiaries and any sale or disposition of property in connection with scheduled turnarounds, maintenance and equipment and facility updates;

 

(8)           the licensing or sub-licensing of intellectual property in the ordinary course of business or consistent with past practice;

 

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(9)           any sale or other disposition deemed to occur with creating, granting or perfecting a Lien not otherwise prohibited by the indenture or the note documents;

 

(10)         any issuance, sale, or transfer of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

 

(11)         the surrender or waiver of contract rights or settlement, release or surrender of a contract, tort or other litigation claim in the ordinary course of business;

 

(12)         foreclosures, condemnations or any similar action on assets;

 

(13)         the lease, assignment or sublease of any real or personal property in the ordinary course of business; and

 

(14)         sales of accounts receivable, or participations therein, and any related assets, in connection with any Permitted Receivables Financing.

 

“Asset Sale Offer” has the meaning assigned to that term in the indenture governing the notes.

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however, that if the sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capital Lease Obligation.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.

 

“Board of Directors” means:

 

(1)           with respect to a corporation, the board of directors of the corporation, or a duly authorized committee thereof;

 

(2)           with respect to a partnership, the Board of Directors of the general partner of the partnership; and

 

(3)           with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Borrowing Base” means, as of any date, an amount equal to:

 

(1)           90% of the face amount of all accounts receivable owned by the Issuer and its Restricted Subsidiaries as of the end of the month preceding such date that were not more than 60 days past due; plus

 

(2)           85% of the book value of all inventory owned by the Issuer and its Restricted Subsidiaries as of the end of the month preceding such date.

 

“business day” means any day other than a Legal Holiday.

 

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“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

 

“Capital Stock” means:

 

(1)           in the case of a corporation, corporate stock;

 

(2)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Cash Equivalents” means:

 

(1)           United States dollars;

 

(2)           securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than two years from the date of acquisition;

 

(3)           time deposits, demand deposits, money market deposits, certificates of deposit and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $250.0 million (or $100.0 million in the case of a non-U.S. bank).

 

(4)           repurchase obligations for underlying securities of the types described in clauses (2), (3) and (7) entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)           commercial paper rated at least P-1 by Moody’s Investors Service, Inc. or at least A-1 by Standard & Poor’s Rating Services (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency) and in each case maturing within two years after the date of acquisition;

 

(6)           marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively, or liquidity funds or other similar money market mutual funds, with a rating of at least Aaa by Moody’s or AAAm by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency);

 

(7)           securities issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority of any such state, commonwealth or territory or any public instrumentality thereof, maturing within two years from the date of acquisition thereof and having an investment grade rating from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services;

 

(8)           money market funds (or other investment funds) at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (7) of this definition;

 

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(9)           (a) Euros or any national currency of any participating member state of the EMU;

 

(b)           local currency held by the Issuer or any of its Restricted Subsidiaries from time to time in the ordinary course of business;

 

(c)           securities issued or directly and fully guaranteed by the sovereign nation or any agency thereof (provided that the full faith and credit of such sovereign nation is pledged in support thereof) in which the Issuer or any of its Restricted Subsidiaries is organized or is conducting business having maturities of not more than one year from the date of acquisition; and

 

(d)           investments of the type and maturity described in clauses (3) through (8) above of foreign obligors, which investments or obligors satisfy the requirements and have ratings described in such clauses.

 

“Change of Control” means the occurrence of any of the following:

 

(1)           the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuer and its Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than one or more Permitted Holders;

 

(2)           the adoption of a plan relating to the liquidation or dissolution of the Issuer (unless, after such liquidation or dissolution, Parent assumes all of the obligations of the Issuer under the indenture and the security documents for the benefit of holders of the notes as provided thereunder);

 

(3)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, except that in no event shall the parties to the Stockholders Agreement be deemed a “group” solely by virtue of being parties to the Stockholders Agreement as in effect on the date hereof), other than one or more Permitted Holders or a Permitted Group, has become the ultimate Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the Voting Stock of the Issuer;

 

(4)           the first day on which a majority of the members of the Board of Directors of the Issuer or the Parent are not Continuing Directors; or

 

(5)           a “Change of Control” shall have occurred under the Senior Unsecured Loan;

 

provided, however, that a transaction in which Parent becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (a) the shareholders of Parent immediately prior to such transaction “beneficially own” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding voting stock of Parent, immediately following the consummation of such transaction or (b) immediately following the consummation of such transaction, no “person” (as such term is defined above), other than such other Person (but including the holders of the Equity Interests of such other Person), “beneficially owns” (as such term is defined above), directly or indirectly through one or more intermediaries, more than 35% of the voting power of the outstanding voting stock of the Parent; and provided, further, however, that any transaction in which the Issuer remains a Wholly Owned Restricted Subsidiary of Parent, but one or more intermediate holding companies between Parent and the Issuer are added, liquidated, merged or consolidated out of existence, shall not constitute a Change of Control. A person or group shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement (or voting or option

 

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agreement related thereto) until the consummation of the transactions contemplated by such agreement.

 

“Change of Control Offer” has the meaning assigned to that term in the indenture governing the notes.

 

“Class” means (1) in the case of Notes Priority Debt, every Series of Notes Priority Debt, taken together, (2) in the case of ABL Priority Debt, every Series of ABL Priority Debt, taken together and (3) in the case of Subordinated Lien Debt, every Series of Subordinated Lien Debt, taken together.

 

“Collateral” means all assets and properties of the Issuer and the Guarantors subject to Liens created by the security documents related to the notes, but excluding Excluded Assets.

 

“Collateral Trust and Notes Priority Intercreditor Agreement” means the Collateral Trust and Notes Priority Intercreditor Agreement among the Issuer, the Guarantors, the Trustee, the Collateral Trustee and any other agent, trustee or representative of additional Notes Priority Debt and the other parties thereto from time to time, as such agreement may be amended, restated, supplemented, modified and/or replaced from time to time.

 

“Collateral Trustee” means Wells Fargo Bank, National Association in its capacity as collateral trustee under the General Intercreditor Agreement, together with its successors in such capacity.

 

“Commission” means the United States Securities and Exchange Commission and any successor organization.

 

“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(1)           provision for taxes based on income or profits or capital gains of such Person and its Restricted Subsidiaries for such period, including without limitation state, franchise and similar taxes and foreign withholding taxes of such Person and its Restricted Subsidiaries paid or accrued during such period (including, without duplication, the amount of any payments made pursuant to clauses 12(a) and 12(b) of paragraph (B) under “Certain Covenants—Restricted Payments”), to the extent that such provision for taxes or payment was deducted in computing such Consolidated Net Income; plus

 

(2)           Fixed Charges of such Person and its Restricted Subsidiaries for such period (including without limitation (x) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (y) costs of surety bonds in connection with financing activities), to the extent that any such Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

(3)           depreciation and amortization (including amortization or impairment write-offs of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization was deducted in computing such Consolidated Net Income; plus

 

(4)           any other non-cash expenses or charges, including any impairment charge or asset write-offs or write-downs related to intangible assets (including goodwill), long-lived assets, and Investments in debt and equity securities pursuant to GAAP, reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated

 

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Cash Flow to such extent, and excluding amortization of a prepaid cash expense or charge that was paid in a prior period); plus

 

(5)           the amount of any integration costs or other business optimization expenses or costs deducted (and not added back) in such period in computing Consolidated Net Income incurred in connection with acquisitions, including any costs related to the closure and/or consolidation of facilities, and severance and relocation cost; plus

 

(6)           the amount of any minority interest expense consisting of income of a Restricted Subsidiary attributable to minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

 

(7)           any extraordinary, non-recurring or unusual gain or loss or expense, together with any related provision for taxes, to the extent deducted in computing such Consolidated Net Income; plus

 

(8)           the amount of cash restructuring charges not to exceed (x) $10.0 million in any twelve-month period and (y) $25.0 million in the aggregate (through the maturity of the notes), to the extent deducted in computing such Consolidated Net Income; minus

 

(9)           non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

 

(1)           the Net Income of any Person, other than the specified Person, that is not a Restricted Subsidiary of the specified Person or that is accounted for by the equity method of accounting shall not be included, except that Consolidated Net Income shall be increased by the amount of dividends or distributions or other payments that are paid in cash (or to the extent converted into cash) or Cash Equivalents to the specified Person or a Restricted Subsidiary thereof during such period;

 

(2)           solely for the purpose of determining the amount available for Restricted Payments under clause 3(a) of the first paragraph under “—Certain Covenants—Restricted Payments,” the Net Income of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its equityholders, unless such restrictions with respect to the declaration and payment of dividends or distributions have been properly waived for such entire period; provided that Consolidated Net Income will be increased by the amount of dividends or other distributions or other payments paid in cash (or to the extent converted into cash) or Cash Equivalents to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

 

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

 

(4)           any amortization of fees or expenses that have been capitalized shall be excluded;

 

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(5)           non-cash charges relating to employee benefit or management compensation plans of the Issuer or any Restricted Subsidiary thereof or any non-cash pension expenses or non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards for the benefit of the members of the Board of Directors of Parent, any direct or indirect parent of the Issuer, or the Issuer or officers or employees of Parent, any direct or indirect parent of the Issuer, or the Issuer and its Restricted Subsidiaries shall be excluded (other than in each case any non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense incurred in a prior period);

 

(6)           any non-recurring charges or expenses incurred in connection with the Refinancing Transaction shall be excluded;

 

(7)           any non-cash restructuring charges shall be excluded;

 

(8)           any non-cash impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP, shall be excluded;

 

(9)           any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any sale of assets outside the ordinary course of business of such Person or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or (c) the extinguishment of any Indebtedness or Hedging Obligations or other derivative instruments of such Person or any of its Restricted Subsidiaries shall, in each case, be excluded;

 

(10)         any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall, in each case, be excluded;

 

(11)         any noncash impact attributable to the application of the purchase method of accounting in accordance with GAAP, including without limitation the total amount of depreciation and amortization, cost of sales or other noncash expense resulting from the write up of assets for such period on a consolidated basis in accordance with GAAP to the extent such noncash expense results from such purchase accounting adjustments;

 

(12)         any fees and expenses incurred during such period, or any amortization or writeoff thereof for such period, in connection with any acquisition, disposition, recapitalization, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests, financing transaction or amendment or modification of any debt instrument (including, in each case, any such transaction undertaken but not completed) and any charges or nonrecurring merger costs incurred during such period as a result of any such transaction, shall be excluded;

 

(13)         accruals and reserves that are established or adjusted within 12 months of the date of original issue of the notes that are so required to be established or adjusted as a result of the Refinancing Transaction in accordance with GAAP shall be excluded;

 

(14)         unrealized gains and losses related to Hedging Obligations shall be excluded;

 

(15)         the Net Income will be reduced by the amount of any payments made pursuant to clauses 12(a) and 12(b) of paragraph (B) under “Certain Covenants—Restricted Payments;”

 

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(16)         any gain or loss realized upon the termination of any employee benefit plan together with any related provision for taxes (or the tax effect of any such termination) shall be excluded;

 

(17)         gains or losses resulting from the translation into U.S. dollars of long term and intercompany obligations; and

 

(18)         amortization of any amounts required or permitted by SFAS 141(R) (including noncash write-ups or noncash charges relating to inventory and fixed assets) or SFAS 142 (including noncash charges related to intangible assets and goodwill) to be recorded on such Person’s balance sheet.

 

“Consolidated Secured Indebtedness” means, as of any date of determination, Consolidated Total Indebtedness secured by Liens.

 

“Consolidated Total Assets” of any Person means, as of any date, the amount which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any like caption) on a consolidated balance sheet of such Person and its Restricted Subsidiaries, as of the end of the most recently ended fiscal quarter for which internal financial statements are available (giving pro forma effect to any acquisitions or dispositions of assets or properties that have been made by the specified Person or any of its Restricted Subsidiaries subsequent to the date of such balance sheet, including through mergers or consolidations).

 

“Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness of the Issuer and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capital Lease Obligations, Attributable Debt in respect of Sale and Lease Back Transactions and debt obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (and excluding (x) any undrawn letters of credit, (y) all obligations relating to any Permitted Receivables Facility and (z) any intercompany Indebtedness) and (2) the aggregate amount of all outstanding Disqualified Stock of the Issuer and all Disqualified Stock and preferred stock of the Restricted Subsidiaries (excluding items eliminated in consolidation), with the amount of such Disqualified Stock and preferred stock equal to the greater of their respective voluntary or involuntary liquidation preferences and Maximum Fixed Repurchase Prices, in each case determined on a consolidated basis, and only to the extent required to be recorded on a balance sheet, in accordance with GAAP. For purposes hereof, the “Maximum Fixed Repurchase Price” of any Disqualified Stock or preferred stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or preferred stock as if such Disqualified Stock or preferred stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or preferred stock, such fair market value shall be determined reasonably and in good faith by the Issuer.

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Issuer or Parent, as the case may be, who:

 

(1)           was a member of such Board of Directors on the date of the indenture; or

 

(2)           was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

 

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“Contribution Indebtedness” means Indebtedness of the Issuer or any Subsidiary Guarantor in an aggregate principal amount equal to the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the Issuer or such Subsidiary Guarantor after the date of the indenture; provided that:

 

(1)           such cash contributions have not been used to make a Restricted Payment, and

 

(2)           such Contribution Indebtedness (a) is incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers’ Certificate on the incurrence date thereof.

 

“controlled foreign corporation” means (i) a controlled foreign corporation within the meaning of Section 957(a) of the United States Internal Revenue Code of 1986, as amended and (ii) New Holdco BV and any of its subsidiaries.

 

“Credit Facilities” means one or more debt facilities (including, without limitation, the ABL Credit Facility), credit agreements, commercial paper facilities, note purchase agreements, indentures, or other agreements, in each case with banks, lenders, purchasers, investors, trustees, agents or other representatives of any of the foregoing, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables or interests in receivables to such lenders or other persons or to special purpose entities formed to borrow from such lenders or other persons against such receivables or sell such receivables or interests in receivables and including Permitted Receivables Financings), letters of credit, notes or other borrowings or other extensions of credit, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, in each case, as amended, restated, modified, renewed, refunded, restated, restructured, increased, supplemented, replaced or refinanced in whole or in part from time to time, including any replacement, refunding or refinancing facility or agreement that increases the amount permitted to be borrowed thereunder or alters the maturity thereof or adds entities as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender, group of lenders, or otherwise.

 

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

 

“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary of the Issuer in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

“Designated Preferred Stock” means preferred stock of Parent, the Issuer or any parent corporation thereof (in each case other than Disqualified Stock) that is issued for cash (other than to the Issuer or any of their Subsidiaries) and is so designated as Designated Preferred Stock pursuant to an Officer’s Certificate executed by the principal financial officer of Parent, the Issuer or the applicable parent corporation thereof, as the case may be, on the issuance date thereof.

 

“Directing Notes Priority Representative” means:

 

(1)           the Trustee; and

 

(2)           if no obligations under the indenture are outstanding, and any other Notes Priority Obligations are outstanding, the respective creditor or any trustee, agent or

 

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representative thereof designated in accordance with the Collateral Trust and Notes Priority Intercreditor Agreement;

 

provided, that the Collateral Trustee shall not be deemed to have knowledge of any change in the “Directing Notes Priority Representative” unless it receives written notice thereof from the Issuer; provided, further, that the “Directing Notes Priority Representative” may, but shall not be required to, await direction by an Act of Required Notes Priority Debtholders and will act, or decline to act, as directed by an Act of Required Notes Priority Debtholders, in respect of any act that requires the direction of the “Directing Notes Priority Representative.”

 

“Discharge of Notes Priority Obligations” means:

 

(1)           payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the Notes Priority Documents and constituting Notes Priority Obligations;

 

(2)           payment in full in cash of all Hedging Obligations constituting Notes Priority Obligations or the cash collateralization of all such Hedging Obligations on terms satisfactory to each applicable counterparty;

 

(3)           payment in full in cash of all other Notes Priority Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than any indemnification obligations for which no claim or demand for payment, whether oral or written, has been made at such time);

 

(4)           termination or expiration of all commitments, if any, to extend credit that would constitute Notes Priority Obligations; and

 

(5)           termination or cash collateralization (in an amount and manner reasonably satisfactory to the Collateral Trustee, but in no event greater than 105% of the aggregate undrawn face amount) of all letters of credit issued under the Notes Priority Documents and constituting Notes Priority Obligations.

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature; provided, however, that only the portion of the Capital Stock which so matures, is mandatorily redeemable or is redeemable at the option of the holder prior to such date shall be deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a Change of Control (or similarly defined term) or an Asset Sale (or similarly defined term) shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Certain Covenants—Restricted Payments.” The term “Disqualified Stock” shall also include any options, warrants or other rights that are convertible into Disqualified Stock or that are redeemable at the option of the holder, or required to be redeemed, prior to the date that is 91 days after the date on which the notes mature. Disqualified Stock shall not include Capital Stock which is issued to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees solely because it may be required to

 

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be repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Issuer that was formed under the laws of the United States or any state of the United States or the District of Columbia.

 

“EN BV” means Euramax Netherlands B.V.

 

“equally and ratably” means, in reference to sharing of Liens or proceeds thereof as between holders of Secured Obligations within the same Class, that such Liens or proceeds:

 

(1)           will be allocated and distributed first to the Secured Debt Representative for each outstanding Series of Notes Priority Debt, ABL Debt or Subordinated Lien Debt within that Class, for the account of the holders of such Series of Notes Priority Debt, ABL Debt or Subordinated Lien Debt, ratably in proportion to the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made on such letters of credit and whether for payment or cash collateralization) on, each outstanding Series of Notes Priority Deb, ABL Debt or Subordinated Lien Debt within that Class when the allocation or distribution is made, and thereafter; and

 

(2)           will be allocated and distributed (if any remain after payment in full of all of the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made on such letters of credit and whether for payment or cash collateralization) on all outstanding Secured Obligations within that Class) to the Secured Debt Representative for each outstanding Series of Notes Priority Debt, ABL Debt or Subordinated Lien Debt within that Class, for the account of the holders of any remaining Secured Obligations within that Class, ratably in proportion to the aggregate unpaid amount of such remaining Secured Obligations within that Class due and demanded (with written notice to the applicable Secured Debt Representative and the Collateral Trustee) prior to the date such distribution is made.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Event of Loss” means, with respect to any property or asset, any (i) loss or destruction of, or damage to, such property or assets or (ii) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation or requisition of the use of such property or asset.

 

“Excluded Contribution” means net cash proceeds received by the Issuer and its Restricted Subsidiaries as capital contributions after the date of the indenture or from the issuance or sale (other than to a Restricted Subsidiary) of Equity Interests (other than Disqualified Stock) of the Issuer (or Parent or a direct or indirect parent of the Issuer to the extent contributed to the Issuer), in each case to the extent designated as an Excluded Contribution pursuant to an Officers’ Certificate and not previously included in the calculation set forth in clause (3)(b) of paragraph (A) of “Certain Covenants—Restricted Payments” for purposes of determining whether a Restricted Payment may be made.

 

“Excluded Subsidiary” means any Subsidiary that is:

 

(1)           a controlled foreign corporation;

 

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(2)           a Subsidiary of a controlled foreign corporation; and

 

(3)           a Restricted Subsidiary of the Issuer; provided that (a) the total assets of all Restricted Subsidiaries that are Excluded Subsidiaries solely as a result of this clause (3), as reflected on their respective most recent balance sheets prepared in accordance with GAAP, do not in the aggregate at any time exceed $1.0 million and (b) the total revenues of all Restricted Subsidiaries that are Excluded Subsidiaries solely as a result of this clause (3) for the twelve-month period ending on the last day of the most recent fiscal quarter for which financial statements for the Issuer are available, as reflected on such income statements, do not in the aggregate exceed $5.0 million.

 

For the sake of clarity, (i) New US LLC 1, which upon consummation of this offering will be a Subsidiary of New Holdco BV and (ii) New US LLC 2, which upon consummation of this offering will be a Subsidiary of EN BV, shall each be an Excluded Subsidiary, the capital stock of each will not be pledged as Collateral, and each shall not be a Guarantor.

 

“fair market value” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. For purposes of determining compliance with the provisions of the indenture described under the caption “—Certain Covenants,” unless provided otherwise, any determination that the fair market value of assets other than cash or Cash Equivalents is equal to or greater than $20.0 million will be made by the Issuer’s or Parent’s Board of Directors and evidenced by a resolution thereof and set forth in an Officers’ Certificate.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, retires or redeems any Indebtedness or issues, repurchases or redeems preferred stock or Disqualified Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, retirement or redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock or Disqualified Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1)           Investments, acquisitions, dispositions, mergers, consolidations, business restructurings, operational changes and any financing transactions relating to any of the foregoing (collectively, “relevant transactions”), in each case that have been made by the specified Person or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, shall be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated on a pro forma basis, including Pro Forma Cost Savings; if since the beginning of such period any Person that subsequently becomes a Restricted Subsidiary of the Issuer or was merged with or into the Issuer or any Restricted Subsidiary thereof since the beginning of such period shall have made any relevant transaction that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such relevant transaction

 

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had occurred at the beginning of the applicable four-quarter period and Consolidated Cash Flow for such reference period shall be calculated on a pro forma basis, including Pro Forma Cost Savings;

 

(2)           the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, shall be excluded;

 

(3)           the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date; and

 

(4)           consolidated interest expense attributable to interest on any Indebtedness (whether existing or being incurred) computed on a pro forma basis and bearing a floating interest rate shall be computed as if the rate in effect on the Calculation Date (taking into account any interest rate option, swap, cap or similar agreement applicable to such Indebtedness if such agreement has a remaining term in excess of 12 months or, if shorter, at least equal to the remaining term of such Indebtedness) had been the applicable rate for the entire period. Interest on Indebtedness that may optionally be determined at an interest rate based on a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate. Interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based on the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition.

 

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

 

(1)           the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, to the extent deducted (and not added back) in computing Consolidated Net Income, including, without limitation, (a) amortization of original issue discount, (b) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (c) the interest component of any deferred payment obligations, (d) the interest component of all payments associated with Capital Lease Obligations, (e) imputed interest with respect to Attributable Debt, (f) commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and (g) net of the effect of all payments made or received pursuant to interest rate Hedging Obligations, but in each case excluding (v) accretion of accrual of discounted liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of any outstanding Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment or other financing fees; plus

 

(2)           the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3)           any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

 

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(4)           the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of such Person or any of its Restricted Subsidiaries, and all cash dividends on any series of preferred stock of any Restricted Subsidiary of such Person, other than dividends on Equity Interests payable solely in Equity Interests of the Issuer (other than Disqualified Stock) or to the Issuer or a Restricted Subsidiary of the Issuer, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, less

 

(5)           interest income for such period,

 

in each case, on a consolidated basis and in accordance with GAAP.

 

“Foreign Subsidiary” means any Restricted Subsidiary of the Issuer other than a Domestic Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States as in effect on the date of the indenture. For clarity purposes, in determining whether a lease is a capitalized lease or an operating lease and whether interest expense exists, such determination shall be made in accordance with GAAP as in effect on the date of the indenture. At any time after the date of the indenture, the Issuer may elect to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in the indenture); provided that any such election, once made, shall be irrevocable; provided further, that any calculation or determination in the indenture that requires the application of GAAP for periods that include fiscal quarters ended prior to the Issuer’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP. The Issuer shall give notice of any such election made in accordance with this definition to the Trustee and the holders of notes.

 

“General Intercreditor Agreement” means the General Intercreditor Agreement to be dated March 18, 2011, among the Issuer, the Guarantors, the ABL Collateral Agent and the Collateral Trustee or any other persons from time to time party thereto, substantially as described herein, as it may be amended or supplemented from time to time in accordance with the indenture.

 

“Government Securities” means (1) securities that are direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (2) securities that are obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America.

 

“Grantors” means, collectively, the Issuer and the Guarantors.

 

“Guarantee” means, as to any Person, a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness of another Person.

 

“Guarantors” means:

 

(1)           Parent;

 

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(2)           each direct or indirect Wholly Owned Restricted Subsidiary of the Issuer on the date of the indenture (other than Excluded Subsidiaries);

 

(3)           any other Restricted Subsidiary of the Issuer that has issued a guarantee of any other Indebtedness of the Issuer or any Guarantor or otherwise is an obligor under the ABL Credit Facility; and

 

(4)           any other Restricted Subsidiary of the Issuer that executes a Note Guarantee in accordance with the provisions of the indenture;

 

and their respective successors and assigns until released from their obligations under their Note Guarantees and the indenture in accordance with the terms of the indenture.

 

“Hedge Agreement Outstanding Amount” means the aggregate amount that would be payable, as determined in the reasonable good faith judgment of each counterparty under each Hedge Agreement which constitutes Notes Priority Debt, consistent with the prevailing market practice, under and in accordance with the terms of the applicable Hedge Agreement which constitutes Notes Priority Debt if the transactions under such Hedge Agreement were terminated on the date two Business Days prior to the date of any vote requiring the Act of the Required Notes Priority Debtholders, or if the transactions under such Hedge Agreement were previously terminated, the termination amount, which remains unpaid as of the Business Day preceding any Act of Required Notes Priority Debtholders.

 

“Hedge Agreements” means:

 

(1)           interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and other agreements or arrangements designed for the purpose of fixing, hedging, mitigating or swapping interest rate risk either generally or under specific contingencies;

 

(2)           foreign exchange contracts, currency swap agreements and other agreements or arrangements designed for the purpose of fixing, hedging, mitigating or swapping foreign currency exchange rate risk either generally or under specific contingencies; and

 

(3)           commodity swap agreements, commodity cap agreements or commodity collar agreements designed for the purpose of fixing, hedging, mitigating or swapping commodity risk either generally or under specific contingencies.

 

“Hedging Obligations” means the obligations owed by the Issuer and the Guarantors to the counterparties under the Hedge Agreements, including any guarantee obligations in respect thereof.

 

“holder” means a Person in whose name a note is registered.

 

“IFRS” means the international accounting standards promulgated by the International Accounting Standards Board and its predecessors, as adopted by the European Union, as in effect from time to time.

 

“incur” means, with respect to any Indebtedness, to incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness; provided that (1) any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary of the Issuer will be deemed to be incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Issuer and (2) neither the accrual of interest nor the accretion of original issue discount nor the payment of interest in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock (to the extent provided for

 

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when the Indebtedness or Disqualified Stock on which such interest or dividend is paid was originally issued) shall be considered an incurrence of Indebtedness; provided that in each case the amount thereof is for all other purposes included in the Fixed Charges of the Issuer or its Restricted Subsidiary as accrued and the amount of any such accretion or payment of interest in the form of additional Indebtedness or additional shares of Disqualified Stock is for all purposes included in the Indebtedness of the Issuer or its Restricted Subsidiary as accreted or paid.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

 

(1)           in respect of borrowed money;

 

(2)           evidenced by bonds, notes, debentures or similar instruments;

 

(3)           evidenced by letters of credit (or reimbursement agreements in respect thereof), but excluding obligations with respect to letters of credit (including trade letters of credit) securing obligations (other than obligations described in clause (1) or (2) above or clause (4), (5), (6), (7) or (8) below) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than the fifth business day following receipt by such Person of a demand for reimbursement;

 

(4)           in respect of banker’s acceptances;

 

(5)           in respect of Capital Lease Obligations and Attributable Debt;

 

(6)           in respect of the balance deferred and unpaid of the purchase price of any property, except (i) any such balance that constitutes an accrued expense or trade payable or similar obligation to a trade creditor and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;

 

(7)           representing Hedging Obligations, other than Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; or

 

(8)           representing Disqualified Stock valued at the greater of its voluntary or involuntary maximum fixed repurchase price.

 

In addition, the term “Indebtedness” includes (1) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and (2) to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value shall be determined in good faith by the Board of Directors of the Issuer or Parent.

 

The amount of any Indebtedness outstanding as of any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to

 

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contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, and shall be:

 

(1)           the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

 

(2)           the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness;

 

provided that Indebtedness shall not include:

 

(i)            any liability for foreign, federal, state, local or other taxes,

 

(ii)           performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations not in connection with money borrowed, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business,

 

(iii)          any liability arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such liability is extinguished within five business days of its incurrence,

 

(iv)          any liability owed to any Person in connection with workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business,

 

(v)           any indebtedness existing on the date of the indenture that has been satisfied and discharged or defeased by legal defeasance, or

 

(vi)          agreements providing for indemnification, adjustment of purchase price or earnouts or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Issuer or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition or acquisition of any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received in connection with such transaction.

 

No Indebtedness of any Person will be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.

 

“Insolvency or Liquidation Proceeding” means:

 

(1)           any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to either Issuer or any Guarantor;

 

(2)           any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to either Issuer or any Guarantor or with respect to a material portion of their respective assets;

 

(3)           any liquidation, dissolution, reorganization or winding up of either Issuer or any Guarantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

 

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(4)           any assignment for the benefit of creditors or any other marshalling of assets and liabilities of either Issuer or any Guarantor.

 

“Intercreditor Agreements” means, collectively, the General Intercreditor Agreement and the Collateral Trust and Notes Priority Intercreditor Agreement.

 

“Investment Grade Securities” means:

 

(1)           securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof;

 

(2)           debt securities or debt instruments with an investment grade rating (but not including any debt securities or instruments constituting loans or advances among the Issuer and its Subsidiaries);

 

(3)           investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) above which fund may also hold immaterial amounts of cash pending investment or distribution; and

 

(4)           corresponding instruments in countries other than the United States customarily utilized for high quality investments.

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the form of loans or other extensions of credit (including Guarantees, but excluding advances to customers or suppliers and trade credit in the ordinary course of business to the extent they are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Issuer or its Restricted Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business), advances (excluding commission, payroll, travel and similar advances to officers, directors and employees made in the ordinary course of business, and excluding advances set forth in the preceding parenthetical), capital contributions (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. In no event shall a guarantee of an operating lease of the Issuer or any Restricted Subsidiary be deemed an Investment.

 

If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Issuer, the Issuer shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Investment in such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.” The acquisition by the Issuer or any Restricted Subsidiary of the Issuer of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the Issuer or such Restricted Subsidiary in such third Person only if such Investment was made in contemplation of, or in connection with, the acquisition of such Person by the Issuer or such Restricted Subsidiary and the amount of any such Investment shall be determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.”

 

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“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including (1) any conditional sale or other title retention agreement, (2) any lease in the nature thereof, (3) any option or other agreement to sell or give a security interest and (4) any filing, authorized by or on behalf of the relevant grantor, of any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

 

“Lien Priority Confirmation” means:

 

(1)           as to any additional ABL Debt, the written agreement of the holders of such additional ABL Debt, or their applicable representative, for the enforceable benefit of the ABL Collateral Agent, all existing and future holders of ABL Debt and each representative with respect thereto, the Collateral Trustee, all holders of each existing and future Notes Priority Debt, each existing and future representative with respect thereto, the Subordinated Collateral Trustee, all holders of existing and future Subordinated Lien Debt, if any, and each existing and future representative with respect thereto:

 

(a)           that such representative and all other holders of obligations in respect of such ABL Debt are bound by the provisions of the General Intercreditor Agreement;

 

(b)           consenting to and directing the ABL Collateral Agent to act as agent for such additional ABL Debt or such representative, as applicable, and perform its obligations under the General Intercreditor Agreement; and

 

(c)           that the holders of such obligations in respect of such additional ABL Debt are bound by the General Intercreditor Agreement; and

 

(2)           as to any additional Notes Priority Debt, the written agreement of the holders of such additional Notes Priority Debt, or their applicable representative, for the enforceable benefit of the Collateral Trustee, all holders of each existing and future Notes Priority Debt, each existing and future representative with respect thereto, the Subordinated Collateral Trustee, all holders of future Subordinated Lien Debt, if any, and each existing and future representative with respect thereto, the ABL Collateral Agent, all holders of ABL Debt and each representative with respect thereto:

 

(a)           that such representative and all other holders of obligations in respect of such Notes Priority Debt are bound by the provisions of the Intercreditor Agreements;

 

(b)           consenting to and directing the Collateral Trustee to act as agent for such additional Notes Priority Debt or such representative, as applicable, and perform its obligations under Intercreditor Agreements and the security documents related to the notes; and

 

(c)           that the holders of such obligations in respect of such additional Notes Priority Debt are bound by the Intercreditor Agreements; and

 

(3)           as to any Subordinated Lien Debt, if any, the written agreement of the holders of such debt, or their applicable representative, for the enforceable benefit of the Subordinated Collateral Trustee, all holders of future Subordinated Lien Debt, if any, each existing and future representative with respect thereto, the Collateral Trustee, all holders of existing and future Notes Priority Debt and each existing and future representative with

 

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respect thereto and the ABL Collateral Agent, all holders of ABL Debt and each representative with respect thereto:

 

(a)           that such representative and all the other holders of obligations in respect of such Subordinated Lien Debt are bound by the provisions of the General Intercreditor Agreement;

 

(b)           consenting to and directing the Subordinated Collateral Trustee to act as agent for such Subordinated Lien Debt or such representative, as applicable, and perform its obligations under the General Intercreditor Agreement and the applicable collateral documents; and

 

(c)           that the holders of such obligations in respect of such Subordinated Lien Debt are bound by the General Intercreditor Agreement.

 

“Majority Holders” means, with respect to any Series of Notes Priority Debt, the holders of more than 50% of the Notes Priority Obligations (determined as provided in the first sentence of the definition of Required Notes Priority Debtholders) in respect thereof.

 

“Moody’s” means Moody’s Investors Service Inc. and any successor to the rating agency business thereto.

 

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of dividends on preferred stock.

 

“Net Proceeds” means the aggregate cash proceeds, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not the interest component, thereof) received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (1) the direct costs relating to such Asset Sale and the sale or other disposition of any non-cash consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage or sales commissions, and any relocation expenses incurred as a result thereof, (2) taxes paid or payable as a result thereof, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (3) amounts required to be applied to the repayment of Indebtedness or other liabilities, secured by a Lien on the asset or assets that were the subject of such Asset Sale, or required to be paid as a result of such sale, (4) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, as well as any other reserve established in accordance with GAAP related to pension and other post-employment benefit liabilities, liabilities related to environmental matters, or any indemnification obligations associated with such transaction and (5) in the case of Net Proceeds relating to an Event of Loss, the amount of any insurance recovery that would otherwise constitute Net Proceeds shall be reduced by the amount of cash invested by the Issuer to rebuild, replace, repair, restore or reconstruct prior to receipt of such insurance proceeds.

 

“New Holdco BV” means an entity organized under the laws of the Netherlands to be acquired by the Issuer on or prior to the closing date for the notes in connection with the planned restructuring of the Issuer’s Foreign Subsidiaries.

 

“New US LLC 1” means a limited liability company organized under the laws of the State of Delaware to be formed by the Issuer on or prior to the closing date for the notes in connection with the planned restructuring of the Issuer’s Foreign Subsidiaries.

 

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“New US LLC 2” means a limited liability company organized under the laws of the State of Delaware to be formed by EN BV on or prior to the closing date for the notes in connection with the planned restructuring of the Issuer’s Foreign Subsidiaries.

 

“New York Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“note documents” means the indenture, the notes and the security documents related to the notes, each as amended or supplemented in accordance with the terms thereof.

 

“Note Guarantee” means a Guarantee of the notes pursuant to the indenture.

 

“Notes Priority Collateral” means all of the assets of the Issuer and the Guarantors including real estate equipment and intellectual property, other than the ABL Priority Collateral and Excluded Assets and subject to certain exceptions set forth in the General Intercreditor Agreement.

 

“Notes Priority Debt” means the indenture, the notes and, to the extent issued or outstanding, any Indebtedness or Hedging Obligations of the Issuer or Guarantors designated as such by the Issuer in writing to the Collateral Trustee, the Subordinated Collateral Trustee and the ABL Collateral Agent; provided that:

 

(1)           on or before the date on which such Indebtedness or Hedging Obligation is incurred, an officer’s certificate is delivered to the Collateral Trustee, the Subordinated Collateral Trustee, if any, and the ABL Collateral Agent designating such Indebtedness as “Notes Priority Debt” for the purposes of the Notes Priority Documents and the Subordinated Lien Documents, if any, and the ABL Documents;

 

(2)           such Indebtedness or Hedging Obligation is evidenced or governed by an indenture, credit agreement, loan agreement, note agreement, promissory note or other agreement or instrument that includes a Lien Priority Confirmation;

 

(3)           such Indebtedness or Hedging Obligation is designated as Notes Priority Debt in accordance with the requirements of the Collateral Trust and Notes Priority Intercreditor Agreement; and

 

(4)           at the time of the incurrence thereof, the applicable Notes Priority Debt may be incurred (and secured as contemplated in the Collateral Trust and Notes Priority Intercreditor Agreement) without violating the terms of any Notes Priority Document, Subordinated Lien Document, if any, and any ABL Document or causing any default thereunder.

 

“Notes Priority Documents” means, collectively, the indenture, the notes, the security documents and each of the other agreements, documents and instruments (including, without limitation, any agreement in respect of any Hedging Obligations) providing for or evidencing any other Notes Priority Obligations, and any other document or instrument executed or delivered at any time in connection with any Notes Priority Obligations, including any intercreditor or joinder agreement among holders of Notes Priority Obligations, to the extent such are effective at the relevant time, in each case as each may be amended, restated, supplemented, modified, renewed, extended or refinanced from time to time, and any other credit agreement, indenture or other agreement, document or instrument evidencing, governing, relating to or securing any Notes Priority Debt.

 

“Notes Priority Obligations” means, subject to the terms and conditions in the Collateral Trust and Notes Priority Intercreditor Agreement, (i) all guarantee obligations, fees, expenses and all other obligations under the Notes Priority Documents, in each case whether or not allowed or allowable in an Insolvency or Liquidation Proceeding, (ii) all obligations under the Indenture and the notes and (iii) all obligations arising with respect to any Notes Priority Debt.

 

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“Notes Priority Representative” means:

 

(1)           in the case of the indenture, the Trustee; or

 

(2)           in the case of any other Series of Notes Priority Debt, the respective creditor or any trustee, agent or representative thereof designated as such in the respective Series of Notes Priority Debt.

 

“Obligations” means any principal, interest, penalties, fees, expenses, indemnifications, reimbursements, damages and other liabilities (including all interest, fees and expenses accruing after the commencement of any Insolvency or Liquidation Proceeding, even if such interest, fees and expenses are not enforceable, allowable or allowed as a claim in such proceeding) under any ABL Documents, Secured Debt Documents or Notes Priority Documents, as the case may be.

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Accounting Officer, the Director of Financial Planning and Analysis, the Treasurer, any Assistant Treasurer, the Controller, the General Counsel, the Secretary, any Executive Vice President, any Senior Vice President, any Vice President or any Assistant Vice President of such Person.

 

“Officers’ Certificate” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal operating officer, the principal financial officer, the treasurer, the principal accounting officer, the Director of Financial Planning and Analysis or the general counsel of the Issuer that meets the requirements of the indenture.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee (who may be counsel to or an employee of the Issuer, any Subsidiary of the Issuer or the Trustee) that meets the requirements of the indenture.

 

“parent of the Issuer” means any one or more parents of the Issuer, including, without limitation, Euramax Holdings, Inc. and any Subsidiary of Euramax Holdings, Inc. that owns, directly or indirectly, all or any portion of the Capital Stock of the Issuer.

 

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Replacement Assets or a combination of Replacement Assets and cash or Cash Equivalents between the Issuer or any of its Restricted Subsidiaries and another Person that is not the Issuer or any of its Restricted Subsidiaries; provided that (i) any cash or Cash Equivalents received must be applied in accordance with the covenant described under “—Repurchase at the Option of Holders—Asset Sales” and (ii) such Replacement Assets constitute ABL Collateral or Notes Priority Collateral to the extent the assets or property so replaced constituted such Collateral, as applicable.

 

“Permitted Group” means any group of investors that is deemed to be a “person” (as that term is used in Section 13(d)(3) of the Exchange Act), as the same may be amended, modified or supplemented from time to time; provided that no single Person (other than the Permitted Holders) beneficially owns (together with its Affiliates) more of the Voting Stock of the Issuer that is beneficially owned by such group of investors than is then collectively beneficially owned by the Permitted Holders in the aggregate.

 

“Permitted Business” means any business conducted or proposed to be conducted (as described in the offering memorandum) by the Issuer and its Restricted Subsidiaries on the date of the indenture and other businesses reasonably related, complementary or ancillary thereto and reasonable expansions or extensions thereof.

 

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“Permitted Holder” means any officer of Parent or the Issuer who owns shares of Parent’s common stock on the issue date of the indenture, and their family members and relatives and any trusts created for the benefit of such persons and/or their family members and relatives and any estate, executor, administrator or other personal representative or beneficiary of any of the foregoing.

 

“Permitted Investments” means:

 

(1)           any Investment in the Issuer or a Restricted Subsidiary of the Issuer, including any investment in the notes or the guarantees thereof; provided that Investments by the Issuer or any Subsidiary Guarantor in a Restricted Subsidiary that is not a Guarantor shall not exceed an aggregate amount of $35.0 million at any one time outstanding (for clarification, this proviso will not limit Investments by a Restricted Subsidiary that is not a Guarantor in a Restricted Subsidiary that is not a Guarantor);

 

(2)           any Investment in cash or Cash Equivalents or Investment Grade Securities;

 

(3)           (A) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person, if as a result of such Investment:

 

(a)           such Person becomes a Subsidiary Guarantor; or

 

(b)           such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Subsidiary Guarantor;

 

and, in each case, any Investment held by such Person, provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; and

 

(B)           any Investment by a Restricted Subsidiary of the Issuer that is not a Subsidiary Guarantor in a Person, if as a result of such Investment:

 

(a)           such Person becomes a Restricted Subsidiary of the Issuer; or

 

(b)           such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;

 

and, in each case, any Investment held by such Person, provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; and

 

(4)           any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales” or from any other disposition of assets not constituting an Asset Sale;

 

(5)           Investments to the extent acquired in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Issuer, Parent or any direct or indirect parent of the Issuer;

 

(6)           Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

 

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(7)           Investments received in satisfaction of judgments or in settlements of debt or compromises of obligations incurred in the ordinary course of business;

 

(8)           loans or advances to employees of the Issuer or any of its Restricted Subsidiaries that are approved by a majority of the disinterested members of the Board of Directors of the Issuer or Parent, in an aggregate principal amount of $2.5 million at any one time outstanding;

 

(9)           Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(10)         other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) since the date of the indenture, not to exceed the greater of (x) $35.0 million and (y) 5.0% of the Issuer’s Consolidated Total Assets at the time of such Investment;

 

(11)         any Investment existing on the date of the indenture;

 

(12)         any Investment acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(13)         guarantees of Indebtedness of the Issuer or any Restricted Subsidiary which Indebtedness is permitted under the covenant described in “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

 

(14)         Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment;

 

(15)         Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business; and

 

(16)         in connection with the Refinancing Transaction and the related restructuring of the Issuer’s Foreign Subsidiaries, the following Investments: (i) a capital contribution by the Issuer to New Holdco BV in an amount necessary to repay the euro-denominated debt of EN BV, a Subsidiary of the Issuer, together with accrued and unpaid interest, outstanding as of the Issue Date; (ii) a capital contribution by the Issuer to New US LLC 1 in an amount necessary to repay the GBP-denominated debt of Euramax Holdings Limited, a Subsidiary of the Issuer, together with accrued and unpaid interest, outstanding as of the Issue Date; (iii) the contribution by the Issuer of its interest in New US LLC 1 to New Holdco BV; (iv) the contribution by the Issuer of its interest in Euramax International Holdings Limited to New US LLC 1; and (v) a loan by the Issuer of up to $230.0 million to New Holdco BV so long as an amount equal to the amount of such loan is distributed or dividended to the Issuer on or within 30 days following the date of the indenture.

 

“Permitted Liens” means:

 

(1)           Liens on Collateral securing ABL Debt and other ABL Obligations, incurred under clauses (1) and (11) of the definition of “Permitted Debt” under the covenant “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

 

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(2)           Liens on Collateral securing the notes issued on the date of the indenture and related guarantees (including liens on any exchange notes and exchange guarantees issued pursuant to the Registration Rights Agreement);

 

(3)           Liens in favor of the Issuer or any Restricted Subsidiary;

 

(4)           Liens on property or Capital Stock of a Person existing at the time such Person is acquired by, merged with or into or consolidated, combined or amalgamated with the Issuer or any Restricted Subsidiary of the Issuer; provided that such Liens were in existence prior to, and were not incurred in connection with or in contemplation of, such merger, acquisition, consolidation, combination or amalgamation and do not extend to any assets other than those of the Person acquired by or merged into or consolidated, combined or amalgamated with the Issuer or the Restricted Subsidiary;

 

(5)           Liens on property existing at the time of acquisition thereof by the Issuer or any Restricted Subsidiary of the Issuer; provided that such Liens were in existence prior to, and were not incurred in connection with or in contemplation of, such acquisition and do not extend to any property other than the property so acquired by the Issuer or the Restricted Subsidiary;

 

(6)           Liens existing on the date of the indenture, other than liens to secure the notes issued on the date of the indenture or to secure Obligations under the ABL Credit Facility outstanding on the date of the indenture;

 

(7)           Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the indenture (other than ABL Debt); provided that (a) the new Lien shall be limited to all or part of the same property and assets that secured the original Lien, and (b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(8)           Liens to secure Indebtedness (including Capital Lease Obligations) permitted by the provision described in clause (5) of the second paragraph of the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided that any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 180 days of such acquisition, construction or improvement;

 

(9)           Liens incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security and employee health and disability benefits;

 

(10)         Liens to secure the performance of bids, tenders, completion guarantees, public or statutory obligations, surety or appeal bonds, bid leases, performance bonds, reimbursement obligations under letters of credit that do not constitute Indebtedness or other obligations of a like nature, and deposits as security for contested taxes or for the payment of rent, in each case incurred in the ordinary course of business;

 

(11)         Liens for taxes, assessments or governmental charges or claims that are (i) not yet overdue or payable or (ii) subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and which proceedings have the effect of preventing the forfeiture or sale of real property Collateral subject to such Liens;

 

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provided that any reserve or other appropriate provision required under GAAP has been made therefor;

 

(12)         carriers’, warehousemen’s, landlords’, mechanics’, suppliers’, materialmen’s and repairmen’s and similar Liens, or Liens in favor of customs or revenue authorities or freight forwarders or handlers to secure payment of customs duties, in each case (whether imposed by law or agreement) incurred in the ordinary course of business;

 

(13)         licenses, entitlements, servitudes, easements, rights-of-way, restrictions, reservations, covenants, conditions, utility agreements, rights of others to use sewers, electric lines and telegraph and telephone lines, minor imperfections of title, minor survey defects, minor encumbrances or other similar restrictions on the use of any real property, including zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business, that were not incurred in connection with Indebtedness and do not, in the aggregate, materially diminish the value of said properties or materially interfere with their use in the operation of the business of the Issuer or any of its Restricted Subsidiaries;

 

(14)         leases, subleases, licenses, sublicenses or other occupancy agreements granted to others in the ordinary course of business which do not secure any Indebtedness and which do not materially interfere with the ordinary course of business of the Issuer or any of its Restricted Subsidiaries;

 

(15)         with respect to any leasehold interest where the Issuer or any Restricted Subsidiary of the Issuer is a lessee, tenant, subtenant or other occupant, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or sublandlord of such leased real property encumbering such landlord’s or sublandlord’s interest in such leased real property;

 

(16)         Liens arising from Uniform Commercial Code financing statement filings regarding precautionary filings, consignment arrangements or operating leases entered into by the Issuer or any of its Restricted Subsidiaries granted in the ordinary course of business;

 

(17)         Liens (i) of a collection bank arising under Section 4-210 of the New York Uniform Commercial Code on items in the course of collection, (ii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) within general parameters customary in the banking industry or (iii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business;

 

(18)         Liens securing judgments for the payment of money not constituting an Event of Default under the indenture pursuant to clause (6) under “Events of Default and Remedies,” so long as such Liens are adequately bonded;

 

(19)         deposits made in the ordinary course of business to secure liability to insurance carriers;

 

(20)         Liens arising out of conditional sale, title retention, consignment or similar arrangements, or that are contractual rights of set-off, relating to the sale or purchase of goods entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

 

(21)         Liens arising under any Permitted Receivables Financing;

 

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(22)         any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement permitted under the indenture;

 

(23)         any extension, renewal or replacement, in whole or in part of any Lien described in clauses (4), (5), (6), (7), (12) through (15), (17), (18) and (22) through (29) of this definition of “Permitted Liens”; provided that any such extension, renewal or replacement is no more restrictive in any material respect than any Lien so extended, renewed or replaced and does not extend to any additional property or assets;

 

(24)         Liens on cash or cash equivalents securing Hedging Obligations in existence on the date of the indenture;

 

(25)         Liens other than any of the foregoing incurred by the Issuer or any Restricted Subsidiary of the Issuer with respect to Indebtedness or other obligations that do not, in the aggregate, exceed $10.0 million at any one time outstanding (which Indebtedness may constitute Notes Priority Debt or Subordinated Lien Debt);

 

(26)         Liens on Capital Stock issued by, or any property or assets of, any Foreign Subsidiary, New US LLC 1 and/or New US LLC 2 securing (a) Indebtedness incurred by a Foreign Subsidiary, New US LLC 1 and/or New US LLC 2 in compliance with the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” or (b) Hedging Obligations;

 

(27)         Liens deemed to exist in connection with Investments in repurchase agreements permitted under “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

 

(28)         Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(29)         Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement not prohibited by the indenture; and

 

(30)         Liens securing Indebtedness in an aggregate principal amount (as of the date of incurrence of any such Indebtedness and after giving pro forma effect to the application of the net proceeds therefrom) not exceeding the Secured Debt Cap.

 

The Issuer may classify (or later reclassify) any Lien in any one or more of the above categories (including in part in one category and in part another category).

 

“Permitted Receivables Financing” means any receivables financing facility or arrangement pursuant to which a Securitization Subsidiary purchases or otherwise acquires accounts receivable of the Issuer or any of its Restricted Subsidiaries and enters into a third party financing thereof on terms that the Board of Directors of the Issuer or Parent has concluded are customary and market terms fair to the Issuer and its Restricted Subsidiaries.

 

“Permitted Refinancing Indebtedness” means:

 

(A)          any Indebtedness of the Issuer or any of its Restricted Subsidiaries (other than Disqualified Stock) issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Issuer or

 

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any of its Restricted Subsidiaries (other than Disqualified Stock and intercompany Indebtedness); provided that:

 

(1)           the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable fees and expenses incurred in connection therewith);

 

(2)           such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

 

(3)           if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the notes or the Note Guarantees, such Permitted Refinancing Indebtedness is contractually subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

 

(4)           if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the notes or any Note Guarantees, such Permitted Refinancing Indebtedness is pari passu in right of payment with, or subordinated in right of payment to, the notes or such Note Guarantees; and

 

(5)           such Indebtedness is incurred either (a) by the Issuer or any Subsidiary Guarantor or (b) by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

 

(B)           any Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace or refund other Disqualified Stock of the Issuer or any of its Restricted Subsidiaries (other than Disqualified Stock held by the Issuer or any of its Restricted Subsidiaries); provided that:

 

(1)           the liquidation or face value of such Permitted Refinancing Indebtedness does not exceed the liquidation or face value of the Disqualified Stock so extended, refinanced, renewed, replaced or refunded (plus all accrued dividends thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable fees and expenses incurred in connection therewith);

 

(2)           such Permitted Refinancing Indebtedness has a final redemption date later than the final redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Disqualified Stock being extended, refinanced, renewed, replaced or refunded;

 

(3)           such Permitted Refinancing Indebtedness has a final redemption date later than the final maturity date of, and is contractually subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Disqualified Stock being extended, refinanced, renewed, replaced or refunded;

 

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(4)           such Permitted Refinancing Indebtedness is not redeemable at the option of the holder thereof or mandatorily redeemable prior to the final maturity of the Disqualified Stock being extended, refinanced, renewed, replaced or refunded; and

 

(5)           such Disqualified Stock is issued either (a) by the Issuer or any Subsidiary Guarantor or (b) by the Restricted Subsidiary that is the issuer of the Disqualified Stock being extended, refinanced, renewed, replaced or refunded.

 

“Person” means any individual, corporation, partnership, joint venture, association, jointstock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“preferred stock” means, with respect to any Person, any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions upon liquidation.

 

“Pro Forma Cost Savings” means, with respect to any period, the reduction in net costs, integration and other synergies (including, without limitation, improvements to gross margins) and related adjustments that (1) are directly attributable to an acquisition that occurred during the four-quarter period or after the end of the four-quarter period and on or prior to the Calculation Date and calculated on a basis that is consistent with Regulation S-X under the Securities Act as in effect and applied as of the date of the indenture, (2) were actually implemented with respect to any acquisition within 12 months after the date of the acquisition and prior to the Calculation Date that are supportable and quantifiable by underlying accounting records or (3) the Issuer reasonably determines are expected to be realized within 12 months of the Calculation Date and, in the case of each of (1), (2) and (3), are described, as provided below, in an Officers’ Certificate, as if all such reductions in costs and integration and other synergies had been effected as of the beginning of such period. Pro Forma Cost Savings described above shall be established by a certificate delivered to the Trustee from the Issuer’s Chief Financial Officer or another Officer authorized by the Board of Directors of the Issuer or Parent to deliver an Officers’ Certificate under the indenture that outlines the specific actions taken or to be taken and the benefit achieved or to be achieved from each such action and, in the case of clause (3) above, that states such benefits have been determined to be probable. Notwithstanding the foregoing, the aggregate Pro Forma Cost Savings taken into account in any determination of the Fixed Charge Coverage Ratio or the Secured Debt Ratio, exclusive of Pro Forma Cost Savings consistent with Regulation S-X under the Securities Act, shall not exceed 10.0% of Consolidated Cash Flow as measured without giving effect to any Pro Forma Cost Savings.

 

“Qualified Equity Offering” means (1) any public offering or private placement of Capital Stock (other than Disqualified Stock) of the Issuer, Parent or any other direct or indirect parent of the Issuer (other than Capital Stock sold to the Issuer or a Subsidiary of the Issuer); provided that if such public offering or private placement is of Capital Stock of Parent or any other direct or indirect parent of the Issuer, the term “Qualified Equity Offering” shall refer to the portion of the net cash proceeds therefrom that has been contributed to the equity capital of the Issuer or (2) the contribution of cash to the Issuer as an equity capital contribution.

 

“Rating Agency” means each of (1) S&P, (2) Moody’s and (3) if either S&P or Moody’s no longer provide ratings, any other ratings agency which is nationally recognized for rating debt securities.

 

“Refinancing Transaction” includes the issuance of notes (and the consummation of the exchange offer in respect thereof pursuant to the Registration Rights Agreement), the execution and delivery of and the entry into the ABL Facility, the incurrence of the Senior

 

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Unsecured Loan, the execution and delivery of the related documentation, the exchange by certain of the Issuer’s existing lenders of a portion of their existing loans for a portion of the Senior Unsecured Loans and the use of proceeds in respect of the foregoing as described in this offering memorandum under “Use of Proceeds.”

 

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the date of the indenture among the Issuer, the Guarantors and the initial purchasers of the notes, as amended, modified, replaced and supplemented from time to time.

 

“Replacement Assets” means (1) tangible assets that will be used or useful in a Permitted Business or (2) substantially all the assets of a Permitted Business or a majority of the Voting Stock of any Person engaged in a Permitted Business that will become on the date of acquisition thereof a Restricted Subsidiary.

 

“Required Notes Priority Debtholders” means, at any time, the holders of a majority in aggregate principal amount of all Notes Priority Debt then outstanding, calculated in accordance with the provisions described in “Security—Collateral Trust and Notes Priority Intercreditor Agreement—Voting.” For purposes of this definition, Notes Priority Debt registered in the name of, or beneficially owned by, any issuer thereof, any guarantor thereof or any Affiliate of any issuer or any guarantor thereof will be deemed not to be outstanding.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to the rating agency business thereto.

 

“Sale and Leaseback Transaction” means, with respect to any Person, any transaction involving any of the assets or properties of such Person whether now owned or hereafter acquired, whereby such Person sells or transfers such assets or properties and then or thereafter leases such assets or properties or any part thereof.

 

“Sale of a Subsidiary Guarantor” means any Asset Sale to the extent involving (1) a sale, lease, conveyance or other disposition of a majority of the Capital Stock of a Subsidiary Guarantor or (2) the issuance of Equity Interests by a Subsidiary Guarantor, other than (a) an issuance of Equity Interests by a Subsidiary Guarantor to the Issuer or another Subsidiary Guarantor and (b) an issuance of directors’ qualifying shares.

 

“Secured Debt Cap” means, as of any date of determination, the amount of Notes Priority Debt and Subordinated Lien Debt that may be incurred by the Issuer or any of the Subsidiary Guarantors under the first paragraph and clause (12) of the second paragraph of the covenant “—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” that is concurrently secured by Liens on the Collateral such that, after giving pro forma effect to the incurrence of any Indebtedness and the application of the Net Proceeds therefrom, the Secured Debt Ratio would not exceed 3.75 to 1.0. For purposes of this calculation, the amount of Indebtedness outstanding as of any date of determination shall not include any Indebtedness that consists solely of Hedging Obligations that are or were incurred in the normal course of business and not for speculative purposes.

 

“Secured Debt Documents” means ABL Documents, Notes Priority Documents and Subordinated Lien Documents.

 

“Secured Debt Ratio” means, as of any date of determination, the ratio of Consolidated Secured Indebtedness of the Issuer and its Restricted Subsidiaries as of that date to the

 

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Issuer’s Consolidated Cash Flow for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of determination, with such adjustments to the amount of such Indebtedness and Consolidated Cash Flow as are consistent with the adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.” For purposes of this calculation, (i) the amount of ABL Debt outstanding as of any date of determination shall include the amount available for borrowing thereunder whether or not borrowed and (ii) any Indebtedness that consists solely of Hedging Obligations that are incurred in the normal course of business and not for speculative purposes shall be excluded.

 

“Secured Debt Representative” means each ABL Representative, Notes Priority Representative and Subordinated Lien Representative.

 

“Secured Obligations” means ABL Obligations, Notes Priority Obligations and Subordinated Lien Obligations.

 

“Securitization Subsidiary” means a Subsidiary of the Issuer

 

(1)           that is designated a “Securitization Subsidiary” by the Board of Directors of the Issuer or Parent,

 

(2)           that does not engage in, and whose charter prohibits it from engaging in, any activities other than Permitted Receivables Financings and any activity necessary, incidental or related thereto,

 

(3)           no portion of the Indebtedness or any other obligation, contingent or otherwise, of which

 

(a)           is Guaranteed by the Issuer, any Guarantor or any Restricted Subsidiary of the Issuer,

 

(b)           is recourse to or obligates the Issuer, any Guarantor or any Restricted Subsidiary of the Issuer in any way, or

 

(c)           subjects any property or asset of the Issuer, any Guarantor or any Restricted Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the satisfaction thereof, and

 

(4)           with respect to which neither the Issuer, any Guarantor nor any Restricted Subsidiary of the Issuer (other than an Unrestricted Subsidiary) has any obligation to maintain or preserve such its financial condition or cause it to achieve certain levels of operating results,

 

other than, in respect of clauses (3) and (4), pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Permitted Receivables Financing.

 

“security documents” means the Intercreditor Agreements, each Lien Priority Confirmation with respect to Notes Priority Debt, and all security agreements, pledge agreements, mortgages, deeds of trust, collateral assignments, collateral agency agreements, debentures, control agreements or other grants or transfers for security executed and delivered by the Issuer or any Guarantor creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and the terms of the Intercreditor Agreements.

 

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“Senior Unsecured Loan” means that certain Credit and Guaranty Agreement dated as of March 3, 2011 by and among the Issuer, Euramax Holdings, Inc., certain Subsidiaries of the Issuer, and the lenders party thereto from time to time for $125.0 million in aggregate principal amount of borrowings and any related notes, guarantees, instruments and agreements executed in connection therewith, and in each case as further amended, restated, adjusted, waived, renewed, modified, refunded, replaced, restated, restructured, increased, supplemented or refinanced in whole or in part from time to time, regardless of whether such amendment, restatement, adjustment, waiver, modification, renewal, refunding, replacement, restatement, restructuring, increase, supplement or refinancing is with the same financial institutions (whether as agents or lenders) or otherwise and any one or more indentures, note purchase agreements, credit facilities, commercial paper facilities, or other financing arrangements or agreements that replace, refund or refinance all or any part of the loans, notes, or other commitments thereunder, including any such replacement, refunding or refinancing facility or indenture or other financing arrangements or agreements that increases the amount borrowable or issuable thereunder or alters the maturity thereof.

 

“Series of ABL Debt” means, severally, (i) Indebtedness under the ABL Credit Facility, (ii) all other Hedging Obligations that constitute ABL Debt and (iii) each separate issue of Indebtedness which constitutes ABL Debt.

 

“Series of Notes Priority Debt” means, severally, the notes and any additional notes, any other Credit Facilities (other than the ABL Credit Facility or Subordinated Lien Debt, if any) and other Indebtedness or Hedging Obligations that constitutes Notes Priority Debt.

 

“Series of Secured Debt” means each Series of ABL Debt, each Series of Notes Priority Debt and each Series of Subordinated Lien Debt.

 

“Series of Subordinated Lien Debt” means, severally, each issue or series of Subordinated Lien Debt for which a single transfer register is maintained.

 

“Significant Subsidiary” means any Restricted Subsidiary that would constitute a “significant subsidiary” within the meaning of Article 1 of Regulation S-X under the Securities Act.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Stockholders Agreement” means the Stockholders Agreement dated as of June 29, 2009, among Parent and the stockholders named therein, as such agreement may be amended, restated, supplemented, modified and/or replaced from time to time.

 

“Subordinated Collateral Trustee” means Wells Fargo Bank, National Association, as collateral trustee for the holders of Subordinated Lien Obligations, if any.

 

“Subordinated Lien” means a Lien granted by a Subordinated Lien Document to the Subordinated Collateral Trustee, at any time, upon any property of the Issuer or any Guarantor to secure Subordinated Lien Obligations.

 

“Subordinated Lien Debt” means:

 

(1)           any Indebtedness (including letters of credit and reimbursement obligations with respect thereto) of the Issuer or any Guarantor that is secured on a subordinated basis to

 

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the Notes Priority Debt by a Subordinated Lien that was permitted to be incurred and so secured under each applicable Subordinated Lien Document; provided that:

 

(a)           on or before the date on which such Indebtedness is incurred by the Issuer or such Guarantor, such Indebtedness is designated by the Issuer or Guarantor, as applicable, in an Officers’ Certificate delivered to the Subordinated Collateral Trustee, Collateral Trustee and the ABL Collateral Agent, as “Subordinated Lien Debt” for the purposes of the indenture and the General Intercreditor Agreement; provided that no Series of Secured Debt may be designated as both Subordinated Lien Debt and either ABL Debt or Notes Priority Debt;

 

(b)           such Indebtedness is governed by an indenture, credit agreement or other agreement that includes a Lien Priority Confirmation; and

 

(c)           all requirements set forth in the General Intercreditor Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (1) will be conclusively established if the Issuer delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Subordinated Lien Debt”); and

 

(2)           Hedging Obligations of the Issuer or any Guarantor incurred in accordance with the terms of the Subordinated Lien Documents; provided that:

 

(a)           on or before or within thirty (30) days after the date on which such Hedging Obligations are incurred by the Issuer or Guarantor (or on or within thirty (30) days after the date of the indenture for Hedging Obligations in existence on the date of the indenture), such Hedging Obligations are designated by the Issuer or Guarantor, as applicable, in an Officers’ Certificate delivered to the Collateral Trustee, as “Subordinated Lien Debt” for the purposes of the Subordinated Lien Documents; provided that no Hedging Obligation may be designated as both Subordinated Lien Debt and either ABL Debt or Notes Priority Debt;

 

(b)           the counterparty in respect of such Hedging Obligations, in its capacity as a holder or beneficiary of such Subordinated Lien, executes and delivers a joinder to the General Intercreditor Agreement in accordance with the terms thereof or otherwise becomes subject to the terms of the General Intercreditor Agreement; and

 

(c)           all other requirements set forth in the General Intercreditor Agreement have been complied with (and the satisfaction of such requirements will be conclusively established if the Issuer delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Hedging Obligations are “Subordinated Lien Debt”).

 

(3)           For purposes of the definition of “Restricted Payments,” the Senior Unsecured Loan.

 

“Subordinated Lien Documents” means, collectively, any indenture, credit agreement or other agreement governing each Series of Subordinated Lien Debt and the security documents related thereto (other than any security documents that do not secure Subordinated Lien Obligations), in each case as such documents may be amended, restated, modified or supplemented from time to time in accordance with their terms.

 

“Subordinated Lien Obligations” means Subordinated Lien Debt and all other Obligations in respect thereof.

 

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“Subordinated Lien Representative” means, in the case of any future Series of Subordinated Lien Debt, the Trustee, agent or representative of the holders of such Series of Subordinated Lien Debt that (1) is appointed as a Subordinated Lien Representative (for purposes related to the administration of the security documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Subordinated Lien Debt, together with its successors in such capacity, and (2) has become a party to the General Intercreditor Agreement (by executing a joinder in the form required under the General Intercreditor Agreement) and any other intercreditor agreement, if applicable.

 

“Subordinated Trustee” means Wells Fargo Bank, National Association, as trustee for the holders of Subordinated Lien Obligations, if any.

 

“Subsidiary” means, with respect to any specified Person:

 

(1)           any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person (or a combination thereof); and

 

(2)           any partnership (a) the sole general partner or the managing general partner of which is such Person or a subsidiary of such Person or (b) the only general partners of which are such Person or one or more subsidiaries of such Person (or any combination thereof).

 

“Subsidiary Guarantor” means a Guarantor that is a Restricted Subsidiary of the Issuer.

 

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to April 1, 2013; provided, however, that if the period from the redemption date to April 1, 2013, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Triggering Event” means a default under (a) the ABL Credit Facility, the indenture, the notes, the Guarantees or the security documents or (b) at such time as the ABL Credit Facility and the indenture are no longer effective, any then effective ABL Document or Notes Priority Document.

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.

 

“Unrestricted Subsidiary” means (i) any Securitization Subsidiary and (ii) any Subsidiary of the Issuer that is designated as an Unrestricted Subsidiary pursuant to a resolution of the Issuer’s or Parent’s Board of Directors in compliance with the covenant described under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” and any Subsidiary of such Subsidiary.

 

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

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“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock at any date, the number of years obtained by dividing:

 

(1)           the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal or liquidation or face value, including payment at final maturity or redemption, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2)           the then outstanding principal or liquidation or face value amount of such Indebtedness or Disqualified Stock.

 

“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or Investments by foreign nationals mandated by applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.

 

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