Document:

mcft-ex101_20.htm

Exhibit 10.1

	
	

 

CREDIT AGREEMENT

 

dated as of

June 28, 2021

among

MasterCraft Boat Holdings, Inc.,

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

___________________________

JPMORGAN CHASE BANK, N.A.,
as Sole Bookrunner and Sole Lead Arranger

and

 

Fifth Third Bank and

BMO Harris Bank, N.A.

as Co-Syndication Agents

 

 

 

 

Table of Contents

 

Page

 

 

	
Article I Definitions
	
1
	
 

	
 
	
SECTION 1.01 Defined Terms
	
1
	
 

	
 
	
SECTION 1.02 Classification of Loans and Borrowings
	
34
	
 

	
 
	
SECTION 1.03 Terms Generally
	
34
	
 

	
 
	
SECTION 1.04 Accounting Terms; GAAP
	
35
	
 

	
 
	
SECTION 1.05 Interest Rates; LIBOR Notification
	
36
	
 

	
 
	
SECTION 1.06 Pro Forma Adjustments for Acquisitions and Dispositions
	
36
	
 

	
 
	
SECTION 1.07 Status of Obligations
	
37
	
 

	
 
	
SECTION 1.08 Letters of Credit
	
37
	
 

	
 
	
SECTION 1.09 Divisions
	
37
	
 

	
Article II The Credits
	
37
	
 

	
 
	
SECTION 2.01 Commitments.
	
37
	
 

	
 
	
SECTION 2.02 Loans and Borrowings.
	
38
	
 

	
 
	
SECTION 2.03 Requests for Borrowings.
	
38
	
 

	
 
	
SECTION 2.04 [Section Intentionally Omitted]
	
39
	
 

	
 
	
SECTION 2.05 Swingline Loans.
	
39
	
 

	
 
	
SECTION 2.06 Letters of Credit.
	
40
	
 

	
 
	
SECTION 2.07 Funding of Borrowings.
	
45
	
 

	
 
	
SECTION 2.08 Interest Elections.
	
45
	
 

	
 
	
SECTION 2.09 Termination and Reduction of Commitments; Increase in Revolving Commitments.
	
47
	
 

	
 
	
SECTION 2.10 Repayment and Amortization of Loans; Evidence of Debt.
	
48
	
 

	
 
	
SECTION 2.11 Prepayment of Loans.
	
50
	
 

	
 
	
SECTION 2.12 Fees.
	
52
	
 

	
 
	
SECTION 2.13 Interest.
	
53
	
 

	
 
	
SECTION 2.14 Alternate Rate of Interest; Illegality.
	
53
	
 

	
 
	
SECTION 2.15 Increased Costs.
	
56
	
 

	
 
	
SECTION 2.16 Break Funding Payments.
	
57
	
 

	
 
	
SECTION 2.17 Withholding of Taxes; Gross-Up.
	
57
	
 

	
 
	
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Setoffs.
	
61
	
 

	
 
	
SECTION 2.19 Mitigation Obligations; Replacement of Lenders.
	
63
	
 

	
 
	
SECTION 2.20 Defaulting Lenders.
	
63
	
 

	
 
	
SECTION 2.21 Returned Payments.
	
66
	
 

	
 
	
SECTION 2.22 Banking Services and Swap Agreements.
	
66
	
 

	
Article III Representations and Warranties
	
66
	
 

	
 
	
SECTION 3.01 Organization; Powers.
	
66
	
 

	
 
	
SECTION 3.02 Authorization; Enforceability.
	
66
	
 

	
 
	
SECTION 3.03 Governmental Approvals; No Conflicts.
	
66
	
 

	
 
	
SECTION 3.04 Financial Condition; No Material Adverse Change.
	
67
	
 

	
 
	
SECTION 3.05 Properties.
	
67
	
 

	
 
	
SECTION 3.06 Litigation and Environmental Matters.
	
67
	
 

	
 
	
SECTION 3.07 Compliance with Laws and Agreements; No Default.
	
68
	
 

	
 
	
SECTION 3.08 Investment Company Status.
	
68
	
 

	
 
	
SECTION 3.09 Taxes.
	
68
	
 

			
	
 
	
i
	
 

 

Table of Contents

(continued)

Page

 

	
 
	
SECTION 3.10 ERISA.
	
68
	
 

	
 
	
SECTION 3.11 Disclosure.
	
68
	
 

	
 
	
SECTION 3.12 Material Agreements.
	
69
	
 

	
 
	
SECTION 3.13 Solvency.
	
69
	
 

	
 
	
SECTION 3.14 Insurance.
	
69
	
 

	
 
	
SECTION 3.15 Capitalization and Subsidiaries.
	
69
	
 

	
 
	
SECTION 3.16 Security Interest in Collateral.
	
69
	
 

	
 
	
SECTION 3.17 Employment Matters.
	
70
	
 

	
 
	
SECTION 3.18 Margin Regulations.
	
70
	
 

	
 
	
SECTION 3.19 Use of Proceeds.
	
70
	
 

	
 
	
SECTION 3.20 No Burdensome Restrictions.
	
70
	
 

	
 
	
SECTION 3.21 Anti-Corruption Laws and Sanctions.
	
70
	
 

	
 
	
SECTION 3.22 Affected Financial Institutions.
	
70
	
 

	
 
	
SECTION 3.23 Plan Assets; Prohibited Transactions.
	
70
	
 

	
 
	
SECTION 3.24 Common Enterprise.
	
70
	
 

	
Article IV Conditions
	
71
	
 

	
 
	
SECTION 4.01 Effective Date.
	
71
	
 

	
 
	
SECTION 4.02 Each Credit Event.
	
73
	
 

	
Article V Affirmative Covenants
	
74
	
 

	
 
	
SECTION 5.01 Financial Statements and Other Information.
	
74
	
 

	
 
	
SECTION 5.02 Notices of Material Events.
	
75
	
 

	
 
	
SECTION 5.03 Existence; Conduct of Business.
	
76
	
 

	
 
	
SECTION 5.04 Payment of Obligations.
	
76
	
 

	
 
	
SECTION 5.05 Maintenance of Properties.
	
77
	
 

	
 
	
SECTION 5.06 Books and Records; Inspection Rights.
	
77
	
 

	
 
	
SECTION 5.07 Compliance with Laws and Material Contractual Obligations.
	
77
	
 

	
 
	
SECTION 5.08 Use of Proceeds.
	
77
	
 

	
 
	
SECTION 5.09 Accuracy of Information.
	
78
	
 

	
 
	
SECTION 5.10 Insurance.
	
78
	
 

	
 
	
SECTION 5.11 Reserved.
	
78
	
 

	
 
	
SECTION 5.12 Casualty and Condemnation.
	
78
	
 

	
 
	
SECTION 5.13 Depository Banks.
	
78
	
 

	
 
	
SECTION 5.14 Additional Collateral; Further Assurances.
	
78
	
 

	
 
	
SECTION 5.15 Post Closing Requirements.
	
79
	
 

	
Article VI Negative Covenants
	
79
	
 

	
 
	
SECTION 6.01 Indebtedness.
	
79
	
 

	
 
	
SECTION 6.02 Liens.
	
81
	
 

	
 
	
SECTION 6.03 Fundamental Changes.
	
82
	
 

	
 
	
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions.
	
82
	
 

	
 
	
SECTION 6.05 Asset Sales.
	
84
	
 

	
 
	
SECTION 6.06 Sale and Leaseback Transactions.
	
84
	
 

	
 
	
SECTION 6.07 Swap Agreements.
	
85
	
 

	
 
	
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.
	
85
	
 

	
 
	
SECTION 6.09 Transactions with Affiliates.
	
86
	
 

	
 
	
SECTION 6.10 Restrictive Agreements.
	
86
	
 

			
	
 
	
ii
	
 

 

Table of Contents

(continued)

Page

 

	
 
	
SECTION 6.11 Amendment of Material Documents.
	
86
	
 

	
 
	
SECTION 6.12 Financial Covenants.
	
86
	
 

	
 
	
SECTION 6.13 Environmental Covenant.
	
87
	
 

	
 
	
SECTION 6.14 Negative Pledge on Real Property.
	
87
	
 

	
Article VII Events of Default
	
87
	
 

	
Article VIII The Administrative Agent
	
90
	
 

	
 
	
SECTION 8.01 Authorization and Action.
	
90
	
 

	
 
	
SECTION 8.02 Administrative Agent’s Reliance, Limitation of Liability, Etc.
	
92
	
 

	
 
	
SECTION 8.03 Posting of Communications.
	
93
	
 

	
 
	
SECTION 8.04 The Administrative Agent Individually.
	
95
	
 

	
 
	
SECTION 8.05 Successor Administrative Agent.
	
95
	
 

	
 
	
SECTION 8.06 Acknowledgements of Lenders and Issuing Banks.
	
96
	
 

	
 
	
SECTION 8.07 Collateral Matters.
	
98
	
 

	
 
	
SECTION 8.08 Credit Bidding.
	
98
	
 

	
 
	
SECTION 8.09 Certain ERISA Matters.
	
99
	
 

	
 
	
SECTION 8.10 Flood Laws.
	
101
	
 

	
Article IX Miscellaneous
	
101
	
 

	
 
	
SECTION 9.01 Notices.
	
101
	
 

	
 
	
SECTION 9.02 Waivers; Amendments.
	
102
	
 

	
 
	
SECTION 9.03 Expenses; Limitation of Liability; Indemnity; Etc.
	
105
	
 

	
 
	
SECTION 9.04 Successors and Assigns.
	
107
	
 

	
 
	
SECTION 9.05 Survival.
	
110
	
 

	
 
	
SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.
	
111
	
 

	
 
	
SECTION 9.07 Severability.
	
112
	
 

	
 
	
SECTION 9.08 Right of Setoff.
	
112
	
 

	
 
	
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
	
112
	
 

	
 
	
SECTION 9.10 WAIVER OF JURY TRIAL.
	
113
	
 

	
 
	
SECTION 9.11 Headings.
	
113
	
 

	
 
	
SECTION 9.12 Confidentiality.
	
113
	
 

	
 
	
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law.
	
114
	
 

	
 
	
SECTION 9.14 USA PATRIOT Act.
	
115
	
 

	
 
	
SECTION 9.15 Disclosure.
	
115
	
 

	
 
	
SECTION 9.16 Appointment for Perfection.
	
115
	
 

	
 
	
SECTION 9.17 Interest Rate Limitation.
	
115
	
 

	
 
	
SECTION 9.18 No Fiduciary Duty, etc.
	
115
	
 

	
 
	
SECTION 9.19 Marketing Consent.
	
116
	
 

	
 
	
SECTION 9.20 Acknowledgement and Consent to Bail-In of Affected Financial Institutions.
	
116
	
 

	
 
	
SECTION 9.21 Acknowledgement Regarding Any Supported QFCs.
	
117
	
 

	
Article X Loan Guaranty
	
117
	
 

	
 
	
SECTION 10.01 Guaranty.
	
117
	
 

	
 
	
SECTION 10.02 Guaranty of Payment.
	
118
	
 

	
 
	
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty.
	
118
	
 

	
 
	
SECTION 10.04 Defenses Waived.
	
118
	
 

			
	
 
	
iii
	
 

 

Table of Contents

(continued)

Page

 

	
 
	
SECTION 10.05 Rights of Subrogation.
	
119
	
 

	
 
	
SECTION 10.06 Reinstatement; Stay of Acceleration.
	
119
	
 

	
 
	
SECTION 10.07 Information.
	
119
	
 

	
 
	
SECTION 10.08 Termination.
	
119
	
 

	
 
	
SECTION 10.09 Taxes.
	
119
	
 

	
 
	
SECTION 10.10 Maximum Liability.
	
120
	
 

	
 
	
SECTION 10.11 Contribution.
	
120
	
 

	
 
	
SECTION 10.12 Liability Cumulative.
	
121
	
 

	
 
	
SECTION 10.13 Keepwell.
	
121
	
 

 

			
	
 
	
iv
	
 

 

 

 

SCHEDULES:

Commitment Schedule

	
Schedule 3.05 –
	
Properties, etc.

	
Schedule 3.14 –
	
Insurance

	
Schedule 3.15 –
	
Capitalization and Subsidiaries 

	
Schedule 6.01 –
	
Existing Indebtedness

	
Schedule 6.02 –
	
Existing Liens

	
Schedule 6.04 –
	
Existing Investments

	
Schedule 6.10 –
	
Existing Restrictions

EXHIBITS:

	
Exhibit A 
	
Assignment and Assumption

	
Exhibit B-1 
	
Borrowing Request 

	
Exhibit B-2 
	
Interest Election Request 

	
Exhibit C-1 
	
U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

	
Exhibit C-2 
	
U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

	
Exhibit C-3 
	
U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

	
Exhibit C-4 
	
U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

	
Exhibit E 
	
Compliance Certificate 

	
Exhibit F 
	
Joinder Agreement

 

 

v

 

 

CREDIT AGREEMENT dated as of June 28, 2021 (as it may be amended or modified from time to time, this “Agreement”), among MasterCraft Boat Holdings, Inc., as Borrower, the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

Article I
Definitions

SECTION 1.01  Defined Terms

.  As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the Alternate Base Rate.

“Account” has the meaning assigned to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or for any ABR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

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

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution. 

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

“Agent-Related Person” has the meaning assigned to it in Section 9.03(d).

“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of all the Lenders at such time.

1

 

“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders at such time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1%, and (c) the Adjusted LIBO Rate for a one-month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.  If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.14(c)), then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.  For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.

“Ancillary Document” has the meaning assigned to it in Section 9.06(b).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable ECF Percentage” has the meaning assigned to it in Section 2.11(d).

“Applicable Parties” has the meaning assigned to it in Section 8.03(c).

“Applicable Percentage”  means, at any time with respect to any Lender, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Commitment at such time and the denominator of which is the aggregate Revolving Commitments at such time (provided that, if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the Aggregate Revolving Exposure at such time); provided that, in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s Commitment shall be disregarded in the calculations above.

“Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread”, or “Commitment Fee Rate”, as the case may be, based upon the Total Net Leverage Ratio as of the most recent determination date, provided that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrower’s consolidated financial information for the Borrower’s first fiscal quarter ending after the Effective Date, the “Applicable Rate” shall be the applicable rates per annum set forth below in Category 4:

				
	
Total Net Leverage Ratio
	
Eurodollar Spread
	
ABR Spread
	
Commitment Fee Rate

	
 

Category 1
≥ 2.75 to 1.0

 
	
2.00%
	
1.00%
	
0.30%

	
 

Category 2
< 2.75 to 1.0 but 
≥ 2.00 to 1.0

 
	
1.75%
	
0.75%
	
0.25%

	
 

Category 3 
< 2.00 to 1.0 but 
≥ 1.25 to 1.0

 
	
1.50%
	
0.50%
	
0.20%

	
 

Category 4 
< 1.25 to 1.0

 
	
1.25%
	
0.25%
	
0.15%

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrower, based upon the Borrower’s annual or quarterly consolidated financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Total Net Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that at the option of the Administrative Agent or at the request of the Required Lenders, if the Borrower fails to deliver the annual or quarterly consolidated financial statements required to be delivered by it pursuant to Section 5.01, the Total Net Leverage Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), or any ratio or compliance information in a Compliance Certificate or other certification was incorrectly calculated, relied on incorrect information or was otherwise not accurate, true or correct, the Borrower shall be required to retroactively pay any additional amount that the Borrower would have been required to pay if such financial statements, Compliance Certificate or other information had been accurate and/or computed correctly at the time they were delivered.

“Approved Electronic Platform” has the meaning assigned to it in Section 8.03(a).

“Approved Fund” has the meaning assigned to the term in Section 9.04(b).

“Arranger” means JPMorgan Chase Bank, N.A., in its capacity as sole bookrunner and sole lead arranger hereunder.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

2

 

“Availability” means, at any time, an amount equal to (a) the aggregate Revolving Commitments minus (b) the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitments.

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (g) of Section 2.14. 

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

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom,  Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Banking Services” means each and any of the following bank services provided to any Loan Party or any Subsidiary by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services).

“Banking Services Obligations” means any and all obligations of the Loan Parties or its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, or has had any order for relief in such proceeding entered in respect thereof, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

3

 

“Benchmark” means, initially, LIBO Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to LIBO Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (c) or clause (d) of Section 2.14. 

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

	
(1)
	
the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

	
(2)
	
the sum of (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

	
(3)
	
the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate  as a replacement  for the then-current Benchmark for  dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment;

provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).

If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

	
(1)
	
for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent:

	
(a)
	
the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;

	
(b)
	
the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply 

4

 

		
to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

	
(2)
	
for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities; 

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion. 

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark: 

	
(1)
	
in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the  published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

	
(2)
	
in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein;

	
(3)
	
in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to Section 2.14(d); or

	
(4)
	
in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such 

5

 

		
Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: 

	
(1)
	
a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the  published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); 

	
(2)
	
a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the  published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component),  which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or 

	
(3)
	
a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof)  announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.

 For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14. 

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

6

 

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

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

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

“Blocking Regulation” has the meaning assigned to it in Section 3.21. 

“Borrower” means MasterCraft Boat Holdings, Inc., a Delaware corporation.

“Borrowing” means (a) Revolving Borrowing, and (b) Term Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, and (c) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be substantially in the form of Exhibit B‐1 hereto or any other form approved by the Administrative Agent.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.10.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for general business in London.

“Capital Expenditures” means, without duplication, any expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Equivalents” means, as to any Person: (a) investments in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of the United States of America, provided that any such obligations shall mature within one (1) year of the date of issuance thereof; (b) investments in commercial paper rated at least P-1 by Moody’s and at least A-1 by S&P maturing within ninety (90) days from the date of issuance thereof; (c) investments in certificates of deposit issued by any Lender or by any United States commercial bank having capital and surplus of not less than $250,000,000 which have a maturity of one year or less; (d) investments in repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (c) above, provided all such agreements require physical delivery of the securities securing such repurchase 

7

 

agreement, except those delivered through the Federal Reserve Book Entry System; and (e) investments in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of the type described in the immediately preceding subsections (a), (b), (c), and (d) above; and (f) other short term liquid investments approved in writing by the Administrative Agent.

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals who are Continuing Directors; or (c) the Borrower shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances, at least 100% of the outstanding voting Equity Interests its Subsidiaries on a fully diluted basis, except as otherwise permitted herein; provided that nothing in this definition shall be interpreted as permitting any transactions not otherwise permitted under this Agreement. 

“Change in Law” means the occurrence after the date of this Agreement of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, a Term Loan, or Swingline Loans, (b) any Commitment, refers to whether such Commitment is a Revolving Commitment or a Term Commitment and (c) any Lender, refers to whether such Lender has a Loan or Commitment of a particular Class.

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

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations.

“Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

8

 

“Collateral Documents” means, collectively, the Security Agreement and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether theretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent.

“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding commercial Letters of Credit plus (b) the aggregate amount of all LC Disbursements relating to commercial Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower.  The Commercial LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate Commercial LC Exposure at such time.

“Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving Commitment and Term Commitments.  The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Commitment Schedule” means the Schedule attached hereto identified as such.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” has the meaning assigned to such term in Section 8.03(c).

“Compliance Certificate” means a certificate of a Financial Officer in substantially the form of Exhibit E.

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

“Continuing Directors” means, with respect to any period, any individuals (A) who were members of the board of directors or other equivalent governing body of the Borrower on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was appointed or nominated by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (C) whose election or nomination to that board or other equivalent governing body was appointed or nominated by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

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

“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Covered Entity” means any of the following:

9

 

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

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

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

“Covered Party” has the meaning assigned to it in Section 9.21.

“Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender’s Revolving Exposure at such time plus (b) an amount equal to the aggregate principal amount of its Term Loans outstanding at such time.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which may include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

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

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations as of the date of certification) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.

“Deficiency Funding Date” has the meaning assigned to such term in Section 2.05(a).

10

 

“De Minimis Amounts” means any Hazardous Substance either (a) being transported on or from the Real Property or being stored for use by any Loan Party or its tenant on the Real Property within a year from original arrival on the Real Property in connection with such Loan Party’s current operations or (b) being currently used by a Loan Party or its tenant on Real Property, in either case in such quantities and in a manner that both (i) does not constitute a violation or threatened violation of any Environmental Law or require any reporting or disclosure under any Environmental Law and (ii) is consistent with customary business practice for such operations in the state where the Real Property is located.

“Deposit Account Control Agreement” has the meaning set forth in the Security Agreement.

“Disclosed Matters” means the actions, suits, proceedings and environmental matters disclosed in Schedule 3.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dividing Person” has the meaning assigned to it in the definition of “Division.”

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division.  A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

“Document” has the meaning assigned to such term in the Security Agreement.

“dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means any direct or indirect Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.

“Early Opt-in Election” means, if the then-current Benchmark is LIBO Rate, the occurrence of:

	
(1)
	
a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

	
(2)
	
the joint election by the Administrative Agent and the Borrower to trigger a fallback from LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Lenders.

11

 

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary charges for such period, (v) any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory), (vi) non-recurring fees, costs and expenses for such period incurred in connection with entering into this Agreement, the other Loan Documents and the Transactions, (vii) fees and reimbursed expenses paid to independent directors during such period for advisory and board management services in an aggregate amount not to exceed $2,000,000 in any fiscal year and (viii) non-recurring fees, costs and expenses during such period incurred in connection with any Permitted Acquisition, permitted disposition, permitted equity issuance and/or permitted investment, in each case, whether or not consummated, minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income for such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP. 

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

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

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

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

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for the Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (i) the environment, (ii) preservation or reclamation of 

12

 

natural resources, (iii) the management, Release or threatened Release of any Hazardous Material or (iv) health and safety matters.

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

“Equipment” has the meaning assigned to such term in the Security Agreement.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing, but excluding any debt securities convertible into any of the foregoing.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

13

 

“Excess Cash Flow” means, for any fiscal year of the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Net Income for such fiscal year, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in determining at such Net Income and (iii) the aggregate net amount of non-cash loss on the Disposition of property by the Borrower and its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Net Income minus (b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at such Net Income, (ii) the aggregate amount actually paid by the Borrower and its Subsidiaries in cash during such fiscal year on account of Capital Expenditures (excluding the principal amount of Indebtedness incurred in connection with such expenditures and any such expenditures financed with (A) Revolving Loans and or (B) the proceeds of Dispositions that have not yet been used to pay down the Loans), (iii) the aggregate amount of all prepayments of Revolving Loans and Swingline Loans during such fiscal year to the extent of accompanying permanent optional reductions of the Revolving Commitments and all optional prepayments of the Term Loans during such fiscal year, (iv) the aggregate amount of all regularly scheduled principal payments of Indebtedness (including the Term Loans) of the Borrower and its Subsidiaries made during such fiscal year (other than in respect of any revolving credit facility, to the extent that there is not an equivalent permanent reduction in commitments thereunder), and (v) the aggregate net amount of non-cash gain on the Disposition of property by the Borrower and its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of business), to the extent included in arriving at such Net Income.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f), and (d) any withholding Taxes imposed under FATCA.

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

14

 

adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“FCA” has the meaning assigned to such term in Section 1.05. 

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, provided that, if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

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

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) EBITDA, minus Unfinanced Capital Expenditures, minus expense for taxes paid in cash minus Restricted Payments to (b) Fixed Charges, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Fixed Charges” means, for any period, without duplication, cash Interest Expense, plus scheduled principal payments on Indebtedness, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Fixtures” has the meaning assigned to such term in the Security Agreement.

“Flood Laws” has the meaning assigned to such term in Section 8.10.

“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to LIBO Rate. 

“Floorplan First Loss Guaranty Obligations” means any guaranty obligations of the Loan Parties in respect of floorplan financing arrangements of the Loan Parties.

“Floorplan Repurchase Obligations” means repurchase obligations of the Loan Parties pursuant to the floorplan financing arrangements of the Loan Parties. 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“Foreign Subsidiary” means any direct or indirect Subsidiary that is not a Domestic Subsidiary.

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

“GAAP” means generally accepted accounting principles in the U.S.

“Governmental Authority” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, 

15

 

court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Guarantors” means all Loan Guarantors and all non-Loan Parties who have delivered an Obligation Guaranty, and the term “Guarantor” means each or any one of them individually.

“Hazardous Materials” means:  (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

“Impacted Interest Period” has the meaning assigned to such term in the definition of “LIBO Rate.”

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any earn-out (which for all purposes of this Agreement, other than the definition of Total Indebtedness, shall be valued at the maximum potential amount payable with respect to each such earn-out, and with respect to the definition of Total Indebtedness, shall be valued in accordance with GAAP), (l) any other Off-Balance Sheet Liability and (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap 

16

 

Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.03(c).

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.08, which shall be substantially in the form of Exhibit B‐2 hereto or any other form approved by the Administrative Agent.

“Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Borrower and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the first Business Day of each calendar quarter and the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable, (b) with respect to any Eurodollar Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Revolving Credit Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months  thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which 

17

 

determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time; provided that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Inventory” has the meaning assigned to such term in the Security Agreement.

“IRS” means the United States Internal Revenue Service.

“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto. 

“Issuing Bank” means, individually and collectively, each of Chase, in its capacity as the issuer of Letters of Credit hereunder, and any other Revolving Lender from time to time designated by the Borrower as an Issuing Bank, with the consent of such Revolving Lender and the Administrative Agent, and their respective successors in such capacity as provided in Section 2.06(i).  Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.06 with respect to such Letters of Credit).  At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

“Issuing Bank Sublimit” means, as of the Effective Date, (i) $5,000,000, in the case of Chase and (ii) such amount as shall be designated to the Administrative Agent and the Borrower in writing by an Issuing Bank; provided that any Issuing Bank shall be permitted at any time to increase or reduce its Issuing Bank Sublimit upon providing five (5) days’ prior written notice thereof to the Administrative Agent and the Borrower.

“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit F.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the Standby LC Exposure at such time.  The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

“Lender Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Lender-Related Person” has the meaning assigned to such term in Section 9.03(b).

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to Section 2.09 or an Assignment and Assumption or otherwise, 

18

 

other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption or otherwise.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letters of Credit” means the letters of credit issued pursuant to this Agreement, and the term “Letter of Credit” means any one of them or each of them singularly, as the context may require.

“Letter of Credit Agreement” has the meaning assigned to it in Section 2.06(b).

“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period or for any ABR Borrowing, the LIBO Screen Rate at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided that, if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event that the Administrative Agent shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error).  Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.

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

“LIBOR” has the meaning assigned to such term in Section 1.05. 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Liquidity” means, at any date, the sum of Availability, plus Unrestricted Cash of the Borrower and its Subsidiaries on a consolidated basis.

“Loan Documents” means, collectively, this Agreement, each promissory note issued pursuant to this Agreement, each Letter of Credit Agreement, each Collateral Document, each Compliance Certificate, the Loan Guaranty, any Obligation Guaranty, and each other agreement, instrument, document and certificate executed and delivered to, or in favor of, the Administrative Agent or any Lender and including each other pledge, power of attorney, consent, assignment, contract, notice, letter of credit agreement, letter of credit applications and any agreements between the Borrower and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations between the Borrower and the Issuing 

19

 

Bank in connection with the issuance of Letters of Credit, and each other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Guarantor” means each Loan Party.

“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means, collectively, the Borrower and its Subsidiaries (other than MasterCraft Parts Limited) and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their respective successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require.

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans.

“Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its Obligations, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of itself and the other Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders under any of the Loan Documents; provided, however, that the term “Material Adverse Effect” shall not mean (i) events, changes, facts, conditions, circumstances or occurrences generally affecting the marine industry, but only to the extent that such events, changes, facts, conditions, circumstances or occurrences do not have a materially disproportionate effect on the Borrower and its Subsidiaries as compared to other industry participants, (ii) events, changes, facts, conditions, circumstances or occurrences generally affecting the economy or the debt, credit or securities markets, but only to the extent that such events, changes, facts, conditions, circumstances or occurrences do not have a materially disproportionate effect on the Borrower and its Subsidiaries as compared to other participants in the industry referred to in clause (i) and (iii) events, changes, facts, conditions, circumstances or occurrences resulting from actions taken by the Borrower and its Subsidiaries which the Administrative Agent has expressly requested in writing or to which the Administrative Agent has expressly consented in writing.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $5,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Moody’s” means Moody’s Investors Service, Inc.

20

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Income” means, for any period, the consolidated net income (or loss) determined for the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, minus (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a Disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source. 

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligated Party” has the meaning assigned to such term in Section 10.02.

“Obligation Guaranty” means any Guarantee of all or any portion of the Secured Obligations executed and delivered to the Administrative Agent for the benefit of the Secured Parties by a guarantor who is not a Loan Party.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations 

21

 

and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

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

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person (other than operating leases).

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

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

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

“Paid in Full” or “Payment in Full” means, (i) the indefeasible payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a back-up standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 105% of the LC Exposure as of the date of such payment), (iii) the indefeasible payment in full in cash of the accrued and unpaid fees, (iv) the indefeasible payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (v) the termination of all Commitments, and (vi) the termination of the Swap Agreement Obligations and the 

22

 

Banking Services Obligations or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Payment” has the meaning assigned to it in Section 8.06(c).

“Payment Notice” has the meaning assigned to it in Section 8.06(c). 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:

	
(a)
	
such Acquisition is not a hostile or contested acquisition;

	
(b)
	
the business acquired in connection with such Acquisition is not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Effective Date and any line of business related to or incidental to the marine industry; provided, however, that with respect to Acquisitions in which the business acquired is not located in the U.S. or organized under applicable U.S. and state laws, the total consideration (including maximum potential total amount of all deferred payment obligations (including earn-outs) and Indebtedness assumed or incurred) for all such Acquisitions made during the term of this Agreement shall not exceed $50,000,000;

	
(c)
	
both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Lenders have been notified in writing by the Loan Parties that any representation or warranty is not correct and the Lenders have explicitly waived in writing compliance with such representation or warranty) and no Default exists, will exist, or would result therefrom;

	
(d)
	
as soon as available, but not less than ten (10) days prior to such Acquisition, the Borrower has provided the Administrative Agent (i) notice of such Acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow;

	
(e)
	
if such Acquisition is an acquisition of the Equity Interests of a Person, such Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of the Borrower or another Subsidiary and a Loan Party pursuant to the terms of this Agreement;

	
(f)
	
if such Acquisition is an acquisition of assets, such Acquisition is structured so that the Borrower or another Loan Party shall acquire such assets;

	
(g)
	
if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

23

 

	
(h)
	
if such Acquisition involves a merger or a consolidation involving the Borrower or any other Loan Party, the Borrower or such Loan Party, as applicable, shall be the surviving entity;

	
(i)
	
no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

	
(j)
	
in connection with an Acquisition of the Equity Interests of any Person, all Liens (other than Permitted Encumbrances) on property of such Person shall be terminated unless the Administrative Agent and the Lenders in their sole discretion consent otherwise, and in connection with an Acquisition of the assets of any Person, all Liens (other than Permitted Encumbrances) on such assets shall be terminated; 

	
(k)
	
the Borrower shall certify to the Administrative Agent and the Lenders (and provide the Administrative Agent and the Lenders with a pro forma calculation in form and substance reasonably satisfactory to the Administrative Agent and the Lenders) that, after giving effect to the completion of such Acquisition, on a pro forma basis (i) Liquidity will not be less than $5,000,000 which includes all consideration given in connection with such Acquisition, other than Equity Interests of the Borrower or a Subsidiary delivered to the seller(s) in such Acquisition, as having been paid in cash at the time of making such Acquisition, (ii) the Borrower will be in compliance with the covenants contained in Section 6.12 and (iii) the Total Net Leverage Ratio will not be greater than the level that would then otherwise be required under Section 6.12 minus 0.25 to 1.00;

	
(l)
	
all actions required to be taken with respect to any newly acquired or formed wholly-owned Subsidiary of the Borrower or a Loan Party, as applicable, required under Section 5.14 shall have been taken; and

	
(m)
	
the Borrower shall have delivered to the Administrative Agent the final executed material documentation relating to such Acquisition within 10 days following the consummation thereof.

“Permitted Encumbrances” means:

(a)Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

(b)carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;

(c)pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; and

24

 

(f)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

(a)direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;

(b)investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e)money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a‐7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

“Prepayment Event” means:

(a)during any fiscal year, any Disposition (including pursuant to a sale and leaseback transaction but excluding Dispositions described in Section 6.05(a)) of any property or asset of any Loan Party or any Subsidiary, but only to the extent that the Net Proceeds received therefor, together with the Net Proceeds received for each other Disposition described in this clause (a) occurring during such fiscal year, exceeds $5,000,000 in the aggregate; or

25

 

(b)during any fiscal year, any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party or any Subsidiary, but only to the extent that the Net Proceeds received therefor, together with the Net Proceeds received for each other event described in this clause (b) occurring during such fiscal year, exceeds $5,000,000 in the aggregate; or

(c)the issuance by the Borrower or any Subsidiary of any Equity Interests, or the receipt by the Borrower or any Subsidiary of any capital contribution, but only if, after giving effect to such incurrence, the Total Net Leverage Ratio (on a pro forma basis) would be greater than or equal to 2.50 to 1.00; or

(d)the incurrence by any Loan Party or any Subsidiary of any Indebtedness, other than Indebtedness permitted under Section 6.01.

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent).  Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

“Proceeding” means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

“Projections” has the meaning assigned to such term in Section 5.01(d).

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

“Public-Sider” means a Lender whose representatives may trade in securities of the Borrower or its Controlling person or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.

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

“QFC Credit Support” has the meaning assigned to it in Section 9.21. 

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

“Real Property” means all real property that was, is now or may hereafter be owned, occupied or otherwise controlled by any Loan Party pursuant to any contract of sale, lease or other conveyance of any legal interest in any real property to any Loan Party.

26

 

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is LIBO Rate, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not LIBO Rate, the time determined by the Administrative Agent in its reasonable discretion. 

“Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

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

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.

“Relevant Governmental Body” means the Federal Reserve Board or the NYFRB, or a committee officially endorsed or convened by the Federal Reserve Board or the NYFRB, or  any successor thereto.

 

“Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrower’s assets from information furnished by or on behalf of the Borrower, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

“Required Lenders” means, subject to Section 2.20, (a) at any time prior to the earlier of the Loans becoming due and payable pursuant to Article VII or the Commitments terminating or expiring, two or more Lenders (that are not Related Parties) having Credit Exposure and Unfunded Commitments representing more than 50% of the sum of the Aggregate Credit Exposure and Unfunded Commitments at such time; provided that solely for purposes of declaring the Loans to be due and payable pursuant to Article VII, the Unfunded Commitment of each Lender shall be deemed to be zero in determining the Required Lenders; and (b) for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, two or more Lenders having Credit Exposure representing more than 50% of the Aggregate Credit Exposure at such time; provided that, in the case of clauses (a) and (b) above, the Credit Exposure of any Lender that is a Swingline Lender shall be deemed to exclude any amount 

27

 

of its Swingline Exposure in excess of its Applicable Percentage of all outstanding Swingline Loans, adjusted to give effect to any reallocation under Section 2.20 of the Swingline Exposures of Defaulting Lenders in effect at such time, and the Unfunded Commitment of such Lender shall be determined on the basis of its Revolving Exposure excluding such excess amount.

“Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means the president or Financial Officer of the Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests. 

“Reuters” means, as applicable, Thomson Reuters Corp, Refinitiv, or any successor thereto.

“Revolving Borrowing” means Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect. 

“Revolving Commitment” means, with respect to each Lender, the amount set forth on the Commitment Schedule opposite such Lender’s name, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such Revolving Commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04; provided, that at no time shall the Revolving Exposure of any Lender exceed its Revolving Commitment.  The initial aggregate amount of the Lenders’ Revolving Commitments is $100,000,000.

“Revolving Credit Maturity Date” means June 28, 2026 (if the same is a Business Day, or if not then the immediately next succeeding Business Day), or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Revolving Exposure” means, with respect to any Lender, at any time, the sum of the aggregate outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and its Swingline Exposure at such time.

“Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

28

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sale and Leaseback Transaction” has the meaning assigned to such term in Section 6.06.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; provided, however, that the definition of “Secured Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (g) the successors and assigns of each of the foregoing.

“Security Agreement” means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among the Borrower, its Domestic Subsidiaries and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).

29

 

“SOFR Administrator’s Website” means the NYFRB’s Website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all standby Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time.  The Standby LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate Standby LC Exposure at such time.

“Statements” has the meaning assigned to such term in Section 2.18(f).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) established by the Federal Reserve Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D).  Such reserve percentages shall include those imposed pursuant to Regulation D of the Federal Reserve Board.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D of the Federal Reserve Board or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person, the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity, the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan Party, as applicable.

“Supported QFC” has the meaning assigned to it in Section 9.21. 

“Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

30

 

“Swap Agreement Obligations” means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Swap Agreement permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate of a Lender.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

“Swingline Commitment” means the amount set forth opposite Chase’s name on the Commitment Schedule as Swingline Commitment.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Revolving Lender at any time shall be the sum of (a) its Applicable Percentage of the aggregate principal amount of all Swingline Loans outstanding at such time (excluding, in the case of any Lender that is a Swingline Lender, Swingline Loans made by it that are outstanding at such time to the extent that the other Lenders shall not have funded their participations in such Swingline Loans), adjusted to give effect to any reallocation under Section 2.20 of the Swingline Exposure of Defaulting Lenders in effect at such time, and (b) in the case of any Revolving Lender that is the Swingline Lender, the aggregate principal amount of all Swingline Loans made by such Revolving Lender outstanding at such time, less the amount of participations funded by the other Lenders in such Swingline Loans.

“Swingline Lender” means Chase, in its capacity as lender of Swingline Loans hereunder.  Any consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by Chase in its capacity as Administrative Agent or Issuing Bank shall be deemed given by Chase in its capacity as Swingline Lender as well.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

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

“Term Loan Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Term Loans, expressed as an amount representing the maximum principal amount of the Term Loans to be made by such Lender, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lenders pursuant to Section 9.04.  The initial amount of each Lender’s Term Loan Commitment is set forth on the Commitment Schedule or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable.  The aggregate amount of the Lenders’ Term Loan Commitment on the Effective Date is $60,000,000.

“Term Lender” means a Lender having a Term Loan Commitment or an outstanding Term Loan.

“Term Loan” means a Loan made pursuant to Section 2.01(b).

“Term Loan Maturity Date” means June 28, 2026.

31

 

“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

“Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of a Term SOFR Transition Event. 

“Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 2.14 that is not Term SOFR.

“Total Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness determined for the Borrower and its Subsidiaries on a consolidated basis at such date.

“Total Net Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness on such date, less Unrestricted Cash (in an aggregate amount not to exceed $35,000,000) on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date.

“Transactions” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, or the Alternate Base Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.

“UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. 

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

“Unfinanced Capital Expenditures” means, for any period, Capital Expenditures made during such period which are not financed from the proceeds of any Indebtedness (other than the Revolving Loans; it being understood and agreed that, to the extent any Capital Expenditures are financed with Revolving Loans, such Capital Expenditures shall be deemed Unfinanced Capital Expenditures).

“Unfunded Commitment” means, with respect to each Lender, the Revolving Commitment of such Lender less its Revolving Exposure.

32

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

“Unrestricted Cash” means all cash and Cash Equivalents of the Borrower and its Domestic Subsidiaries to the extent that (i) the use of such cash and Cash Equivalents for application to payment of the Obligations is not prohibited by any contractual obligation or requirement of law and (ii) such cash and Cash Equivalents are free and clear of all Liens (other than Liens in favor of the Administrative Agent and Permitted Encumbrances). 

“U.S.” means the United States of America.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regime” has the meaning assigned to it in Section 9.21. 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02  Classification of Loans and Borrowings

.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03  Terms Generally

.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and 

33

 

interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04  Accounting Terms; GAAP

.

(a)Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such change  in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825‐10‐25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness under Financial Accounting Standards Board Accounting Standards Codification 470‐20 or 2015-03 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof. 

(b)Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of “Capital Lease Obligations,” any change in accounting for leases pursuant to GAAP resulting from the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”), to the extent such adoption would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

34

 

SECTION 1.05  Interest Rates; LIBOR Notification

.  The interest rate on Eurodollar Loans is determined by reference to the LIBO Rate, which is derived from the London interbank offered rate (“LIBOR”). LIBOR is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market.  On March 5, 2021, the U.K. Financial Conduct Authority (“FCA”) publicly announced that: (a) immediately after December 31, 2021, publication of all seven euro LIBOR settings, all seven Swiss Franc LIBOR settings, the spot next, 1-week, 2-month and 12-month Japanese Yen LIBOR settings, the overnight, 1-week, 2-month and 12-month British Pound Sterling LIBOR settings, and the 1-week and 2-month U.S. Dollar LIBOR settings will permanently cease; immediately after June 30, 2023, publication of the overnight and 12-month U.S. Dollar LIBOR settings will permanently cease; immediately after December 31, 2021, the 1-month, 3-month and 6-month Japanese Yen LIBOR settings and the 1-month, 3-month and 6-month British Pound Sterling LIBOR settings will cease to be provided or, subject to consultation by the FCA, be provided on a changed methodology (or “synthetic”) basis and no longer be representative of the underlying market and economic reality they are intended to measure and that representativeness will not be restored; and immediately after June 30, 2023, the 1-month, 3-month and 6-month U.S. Dollar LIBOR settings will cease to be provided or, subject to the FCA’s consideration of the case, be provided on a synthetic basis and no longer be representative of the underlying market and economic reality they are intended to measure and that representativeness will not be restored.  There is no assurance that dates announced by the FCA will not change or that the administrator of LIBOR and/or regulators will not take further action that could impact the availability, composition, or characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published.  Each party to this agreement should consult its own advisors to stay informed of any such developments. Public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of LIBOR.  Upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, Section 2.14(c) and (d) provide the mechanism for determining an alternative rate of interest.  The Administrative Agent will promptly notify the Borrower, pursuant to Section 2.14(f), of any change to the reference rate upon which the interest rate on Eurodollar Loans is based.  However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to LIBOR or other rates in the definition of “LIBO Rate” or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section 2.14(c) or (d), whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 2.14(e)), including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate  will be similar to, or produce the same value or economic equivalence of, the LIBO Rate or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.

SECTION 1.06  Pro Forma Adjustments for Acquisitions and Dispositions

.  To the extent the Borrower or any Subsidiary makes any acquisition permitted pursuant to Section 6.04 or Disposition outside the ordinary course of business permitted by Section 6.05 or a Restricted Payment permitted by Section 6.08(a)(iv) during the period of four fiscal quarters of the Borrower most recently ended, the Total Net Leverage Ratio, the Fixed Charge Covenant Ratio and any financial covenants set forth in Section 6.12, as applicable, shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or the Disposition, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S‐X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such Restricted Payment, such acquisition or such Disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four-quarter period.

35

 

SECTION 1.07  Status of Obligations

.  In the event that the Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, the Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.  Without limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

SECTION 1.08  Letters of Credit

.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the amount of such Letter of Credit available to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit Agreement related thereto, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time) or Rule 3.13 or Rule 3.14 of the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time) or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower and each Lender shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

SECTION 1.09  Divisions

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

Article II
The Credits

SECTION 2.01  Commitments.  

(a)Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result (after giving effect to any application of proceeds of such Borrowing pursuant to Section 2.10(a)) in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the aggregate 

36

 

Revolving Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

(b)Subject to the terms and conditions set forth herein, each Term Lender severally (and not jointly) agrees to make a Term Loan in dollars to the Borrower, on the Effective Date, in a principal amount not to exceed such Lender’s Term Loan Commitment.  Amounts prepaid or repaid in respect of Term Loans may not be reborrowed.

SECTION 2.02  Loans and Borrowings.

(a)Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.

(b)Subject to Section 2.14, each Revolving Borrowing and Term Loan Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c)At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000 or such lesser amount as may be agreed to by the Administrative Agent.  At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $50,000 and not less than $500,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e).  Each Swingline Loan shall be in an amount that is an integral multiple of $50,000 and not less than $100,000 or, if requested by the Borrower and if a sweep arrangement is permitted by the Administrative Agent, such lesser amount as may be agreed to by the Administrative Agent.   Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 8 Eurodollar Borrowings outstanding.

(d)Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable.

SECTION 2.03  Requests for Borrowings.

  To request a Borrowing, the Borrower shall notify the Administrative Agent of such request either in writing (delivered by hand or fax) by delivering a Borrowing Request signed by a Responsible Officer of the Borrower or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than noon, New York City time, on the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., New York City time, on the date of the proposed Borrowing.  Each such Borrowing Request 

37

 

shall be irrevocable.  Each such Borrowing Request shall specify the following information in compliance with Section 2.01:

(i)the Class of Borrowing, the aggregate amount of the requested Borrowing, and a breakdown of the separate wires comprising such Borrowing;

(ii)the date of such Borrowing, which shall be a Business Day;

(iii)whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04  [Section Intentionally Omitted]

SECTION 2.05  Swingline Loans.

(a)Subject to the terms and conditions set forth herein, from time to time during the Availability Period, the Swingline Lender agrees to make Swingline Loans to the Borrower, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Lender’s Swingline Commitment, (ii) the Swingline Lender’s Revolving Exposure exceeding its Revolving Commitment, or (iii) the Aggregate Revolving Exposure exceeding the the aggregate Revolving Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.  To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by fax or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, not later than noon, New York City time, on the day of a proposed Swingline Loan.  Each such notice shall be in a form approved by the Administrative Agent, shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the Funding Account(s) (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank, and in the case of repayment of another Loan or fees or expenses as provided by Section 2.18(c), by remittance to the Administrative Agent to be distributed to the Lenders) by 2:00 p.m., New York City time, on the requested date of such Swingline Loan.  

(b)The Swingline Lender may by written notice given to the Administrative Agent require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which the Revolving Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such 

38

 

Swingline Loan or Loans.  Each Revolving Lender hereby absolutely and unconditionally agrees, promptly upon receipt of such notice from the Administrative Agent (and in any event, if such notice is received by 11:00 a.m., New York City time, on a Business Day no later than 4:00 p.m., New York City time on such Business Day and if received after 11:00 a.m., New York City time, “on a Business Day” shall mean no later than 9:00 a.m., New York City time on the immediately succeeding Business Day), to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders.  The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

SECTION 2.06  Letters of Credit. 

(a)General.  Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to issue Letters of Credit denominated in dollars as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a form reasonably acceptable to such Issuing Bank, at any time and from time to time during the Availability Period.  

(b)Notice of Issuance, Amendment, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or fax (or transmit through Electronic System, if arrangements for doing so have been approved by the respective Issuing Bank) to an Issuing Bank selected by it and to the Administrative Agent (reasonably in advance of the requested date of issuance, amendment or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended or extended, and specifying the date of issuance, amendment or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend or extend such Letter of Credit.  In addition, as a condition to any such Letter of Credit issuance, the Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the respective Issuing Bank and using such Issuing Bank’s standard form (each, a “Letter of Credit Agreement”).  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control.  A Letter of Credit shall be issued, amended or extended only if (and upon issuance, amendment or extension of each Letter of Credit the 

39

 

Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment or extension (i) the aggregate LC Exposure shall not exceed $5,000,000, (ii) no Revolving Lender’s Revolving Exposure shall exceed its Revolving Commitment and (iii) the Aggregate Revolving Exposure shall not exceed the aggregate Revolving Commitments.  Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank’s Issuing Bank Sublimit.  Without limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed that the Borrower may from time to time request that an Issuing Bank issue Letters of Credit in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank agrees to consider any such request in good faith.  Any Letter of Credit so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit for all purposes of the Credit Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).

An Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

(i)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such Issuing Bank in good faith deems material to it, or 

(ii)the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally. 

(c)Expiration Date.  Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the applicable Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any extension of the expiration thereof, including, without limitation, any automatic renewal provision, one year after such extension) and (ii) the date that is five Business Days prior to the Revolving Credit Maturity Date.

(d)Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Revolving Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the respective Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason, including after the Revolving Credit Maturity Date.  Each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and 

40

 

unconditional and shall not be affected by any circumstance whatsoever, including any amendment or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments.

(e)Reimbursement.  If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., New York City time, on (i) the Business Day that the Borrower receives notice of such LC Disbursement, if such notice is received prior to 9:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is received after 9:00 a.m., New York City time, on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof, and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the respective Issuing Bank the amounts so received by it from the Revolving Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the respective Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank, as their interests may appear.  Any payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f)Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the respective Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  Neither the Administrative Agent, the Revolving Lenders  nor any Issuing Bank, or any of their respective Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms, any error in translation or any consequence arising from causes beyond the control of the respective Issuing Bank; provided that the foregoing shall not be construed to excuse an Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted 

41

 

by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g)Disbursement Procedures.  The Issuing Bank for any Letter of Credit shall, within the time allowed by applicable law or the specific terms of the Letter of Credit following its receipt thereof, examine all documents purporting to represent a demand for payment under such Letter of Credit.  Such Issuing Bank shall promptly after such examination notify the Administrative Agent and the Borrower by telephone (confirmed by fax or through Electronic Systems) of such demand for payment if such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h)Interim Interest.  If the Issuing Bank for any Letter of Credit shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is due; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of such Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank for such LC Disbursement shall be for the account of such Lender to the extent of such payment.

(i)Replacement and Resignation of an Issuing Bank.  

(i)An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Revolving Lenders of any such replacement of an Issuing Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit or extend or otherwise amend any existing Letter of Credit.

42

 

(ii)Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such resigning Issuing Bank shall be replaced in accordance with Section 2.06(i)(i) above.

(j)Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII.  The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Sections 2.11(b) or 2.20.  Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  In addition, and without limiting the foregoing or paragraph (c) of this Section, if any LC Exposure remains outstanding after the expiration date specified in said paragraph (c), the Borrower shall immediately deposit in the LC Collateral Account an amount in cash equal to 105% of such LC Exposure as of such date plus any accrued and unpaid interest thereon.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited thereto.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of a Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such Defaults have been cured or waived as confirmed in writing by the Administrative Agent.

(k)Issuing Bank Reports to the Administrative Agent.  Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions and amendments, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Bank issues, amends or extends any Letter of Credit, the date of such issuance, amendment or extension, and the stated amount of the Letters of Credit issued, amended or extended by it and outstanding after giving effect to such issuance, amendment or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such 

43

 

LC Disbursement, and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank.

(l)Letters of Credit Issued for Account of Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and without derogating from any rights of the applicable Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrower (i) shall reimburse, indemnify and compensate the applicable Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit.  The Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

SECTION 2.07  Funding of Borrowings.

(a)Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 2:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided that Term Loans shall be made as provided in Sections 2.01(b) and 2.02(b) and Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the funds so received in the aforesaid account of the Administrative Agent to the Funding Account(s); provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b)Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower each severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Revolving Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing; provided, that any interest received from the Borrower by the Administrative Agent during the period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount shall be solely for the account of the Administrative Agent.

SECTION 2.08  Interest Elections.

(a)Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or 

44

 

to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b)To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election either in writing (delivered by hand or fax) by delivering an Interest Election Request signed by a Responsible Officer of the Borrower or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such Interest Election Request shall be irrevocable.

(c)Each Interest Election Request (including requests submitted through Electronic System) shall specify the following information in compliance with Section 2.02:

(i)the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if a Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as a Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

45

 

SECTION 2.09  Termination and Reduction of Commitments; Increase in Revolving Commitments. 

(a)Unless previously terminated, (i) the Term Commitments shall terminate at 5:00 p.m., New York City time, on the Effective Date and (ii) all the Revolving Commitments shall terminate on the Revolving Credit Maturity Date.

(b)The Borrower may at any time terminate the Revolving Commitments upon the Payment in Full of the Secured Obligations.

(c)The Borrower may from time to time reduce the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, (A) any Lender’s Revolving Exposure would exceed such Lender’s Revolving Commitment or (B) the Aggregate Revolving Exposure would exceed the aggregate Revolving Commitments.

(d)The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Revolving Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.

(e) The Borrower shall have the right to increase the Revolving Commitments by obtaining additional Revolving Commitments and increase the Term Loan Commitments by obtaining incremental Term Loans, either from one or more of the Lenders or, with the consent of the Administrative Agent, but without the consent of any other Lenders, another lending institution, provided that (i) any such request for an increase shall be in a minimum amount of $10,000,000, (ii) the Borrower may make a maximum of three (3) such requests, (iii) after giving effect thereto, the aggregate amount of all additional Revolving Commitments and the original principal amount of all incremental Term Loans consummated under this Section shall not exceed $75,000,000, (iv) the Administrative Agent , the Swingline Lender and the Issuing Bank have approved the identity of any such new Lender, such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and obligations of a “Lender” hereunder, (vi) the procedures described in Section 2.09(f) below have been satisfied, (vii) if the weighted average yield relating to any incremental Term Loans (to the extent that such incremental Term Loan is made within twelve (12) months after the Effective Date) exceeds the weighted average yield relating to the existing Term Loans by more than 0.50%, the weighted average yield related to the existing Term Loans shall be adjusted to be equal to the weighted average yield relating to such incremental Term Loans minus 0.50%, (viii) in no event shall the final maturity date of any incremental Term Loan be earlier than the final maturity date of any other existing Loans hereunder, (ix) the weighted average life to maturity of any incremental Term Loan shall be no shorter than the weighted average life to maturity of the then existing Term Loans, (x) any incremental Term Loans shall be subject to covenants that are no more favorable to the Borrower  than the covenants applicable to the then existing Loans and (xi) any incremental Term Loans shall have the same guarantees as, and be secured on a pari passu or subordinate basis by the same Collateral securing 

46

 

the Term Loans. Nothing contained in this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder at any time.

(f) Any amendment hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrower and each Lender being added or increasing its Commitment. As a condition precedent to such an increase or addition, the Borrower shall deliver to the Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in Article III and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, (2) no Default exists and (3) the Borrower is in compliance (on a pro forma basis) with the covenants contained in Section 6.12 and the Total Net Leverage Ratio (on a pro forma basis) would be not greater than the level then required minus 0.25 to 1.00 and (ii) legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent.

	
(g)
	
On the effective date of any such increase or addition, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Revolving Commitment and/or Term Loan Commitment, as applicable, shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans and/or Term Loans, as applicable, of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Loans and/or Term Loans, as applicable, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Loans and/or Term Loans, as applicable, then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans and/or Term Loans, as applicable, as of the date of any increase (or addition) in the Revolving Commitments and/or Term Loan Commitments (with such reborrowing to consist of the Types of Revolving Loans and/or Term Loans, as applicable, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03).  The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods.  Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.

SECTION 2.10  Repayment and Amortization of Loans; Evidence of Debt.

(a)The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan on the Revolving Credit Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Revolving Credit Maturity Date and the fifth Business Day after such Swingline Loan is made; provided that on each date that a Revolving Loan is made, the Borrower shall 

47

 

repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding. 

(b)The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Term Lender on each date set forth below the aggregate principal amount set forth opposite such date (as adjusted from time to time pursuant to Section 2.11(d) or 2.18(b)):

		
	
Date
	
Amount

	
September 30, 2021
	
$750,000

	
December 31, 2021
	
$750,000

	
March 31, 2022
	
$750,000

	
June 30, 2022
	
$750,000

	
September 30, 2022
	
$750,000

	
December 31, 2022
	
$750,000

	
March 31, 2023
	
$750,000

	
June 30, 2023
	
$750,000

	
September 30, 2023
	
$1,125,000

	
December 31, 2023
	
$1,125,000

	
March 31, 2024
	
$1,125,000

	
June 30, 2024
	
$1,125,000

	
September 30, 2024
	
$1,125,000

	
December 31, 2024
	
$1,125,000

	
March 31, 2025
	
$1,125,000

	
June 30, 2025
	
$1,125,000

	
September 30, 2025
	
$1,500,000

	
December 31, 2025
	
$1,500,000

	
March 31, 2026
	
$1,500,000

	
Term Loan Maturity Date
	
The entire unpaid principal amount of all Term Loans

; provided if any date set forth above is not a Business Day, then payment shall be due and payable on the Business Day immediately preceding such date.  To the extent not previously paid, all unpaid Term Loans shall be paid in full in cash by the Borrower on the Term Loan Maturity Date.

(c)Prior to any repayment of any Term Loan Borrowings of any Class under this Section, the Borrower shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall notify the Administrative Agent by telephone (confirmed by fax or through Electronic System), of such selection not later than 11:00 a.m., New York City time, three (3) Business Days before the scheduled date of such repayment.  Each repayment of a Term Loan Borrowing shall be applied ratably to the Loans included in the repaid Term Loan Borrowing.  Repayments of Term Loan Borrowings shall be accompanied by accrued interest on the amounts repaid.

(d)Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(e)The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower 

48

 

to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(f)The entries made in the accounts maintained pursuant to paragraph (d) or (e) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(g)Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.11  Prepayment of Loans.

(a)The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (e) of this Section and, if applicable, payment of any break funding expenses under Section 2.16.

(b)In the event and on such occasion that the Aggregate Revolving Exposure exceeds the aggregate Revolving Commitments, the Borrower shall prepay the Revolving Loans, LC Exposure and/or Swingline Loans (or, if no such Borrowings are outstanding, deposit cash collateral in the LC Collateral Account in an aggregate amount equal to such excess, in accordance with Section 2.06(j)).

(c)In the event and on each occasion that any Net Proceeds are received by or on behalf of  any Loan Party or any Subsidiary in respect of any Prepayment Event, the Borrower shall, immediately after such Net Proceeds are received by any Loan Party or Subsidiary, prepay the Obligations and cash collateralize the LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal to (x) in the case of a prepayment event described in clause (c) of the definition of the term “Prepayment Event”, 50% of such Net Proceeds and (y) in the case of all other Prepayment Events, 100% of such Net Proceeds, provided that, in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if the Borrower shall deliver to the Administrative Agent no later than 180 days after such event a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 360 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding inventory) to be used in the business of the Loan Parties, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, provided that to the extent of any such Net Proceeds that have not been so applied by the end of such 360 day period, a prepayment shall be required at such time in an amount equal to such Net Proceeds that have not been so applied.

(d)Until the latest of the Revolving Credit Maturity Date or the Term Loan Maturity Date, as the case may be, the Borrower shall prepay the Obligations as set forth in Section 2.11(e) below on the date that is ten days after the earlier of (i) the date on which the Borrower’s annual audited financial statements for the immediately preceding fiscal year are delivered pursuant to Section 5.01 or (ii) the date on which such annual audited financial statements were required to be delivered pursuant to Section 5.01, in an amount equal to the Applicable ECF Percentage of the Borrower’s Excess Cash Flow for the immediately preceding fiscal year as set forth in paragraph (e) below. Each Excess Cash Flow prepayment shall be 

49

 

accompanied by a certificate signed by a Financial Officer certifying the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance satisfactory to Administrative Agent. For purposes hereof, the “Applicable ECF Percentage” means the percentages set forth in the grid below:

		
	
Total Net 

Leverage Ratio

 
	
Applicable ECF Percentage

	
 

≥ 2.50 to 1.0

 
	
50%

	
 

< 2.50 to 1.0 but

≥ 2.00 to 1.0/

 
	
25%

	
 

< 2.00 to 1.0 

 
	
0%

 

(e)(i) All prepayments made pursuant to Section 2.11(a) shall be applied (A) if made with respect to the Term Loans (and in the event Term Loans of more than one Class shall be outstanding at the time, shall be allocated among the Term Loans pro rata based on the aggregate principal amounts of outstanding Term Loans of each such Class), as so allocated, and shall be applied to reduce the subsequent scheduled repayments of Term Loans of each Class to be made pursuant to Section 2.10 ratably in accordance with the then outstanding amounts thereof or (B) if made with respect to the Revolving Loans (including the Swingline Loans), to prepay such Loans in accordance with the Lenders’ respective Applicable Percentages without a corresponding reduction in the Revolving Commitments or the Swingline Commitment, as applicable, and to cash collateralize outstanding LC Exposure.

(ii) All prepayments required to be made pursuant to Section 2.11(c) and Section 2.11(d) shall be applied, first to prepay the Term Loans (and in the event Term Loans of more than one Class shall be outstanding at the time, shall be allocated among the Term Loans pro rata based on the aggregate principal amounts of outstanding Term Loans of each such Class) as so allocated, and shall be applied to reduce the subsequent scheduled repayments of Term Loans of each Class to be made pursuant to Section 2.10 ratably based on the amount of such scheduled repayments and second to prepay the Revolving Loans (including Swingline Loans) without a corresponding reduction in the Revolving Commitments (or the Swingline Commitment, as applicable) and third to cash collateralize outstanding LC Exposure; provided that all prepayments required to be made pursuant to Section 2.11(c) with respect to Net Proceeds arising from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding, to the extent they arise from casualties or losses to cash or Inventory shall be applied, first, to prepay the Revolving Loans (including Swingline Loans) without a corresponding reduction in the Revolving Commitments (or the Swingline Commitment, as applicable) and second, to cash collateralize outstanding LC Exposure, and third, to prepay the Term Loans (allocated and applied to subsequent scheduled repayments as set forth above).

(f)The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by fax) or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, of any prepayment under this Section:  (i) in the case of prepayment of a Eurodollar Borrowing, not later than 10:00 a.m., New York City time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 10:00 a.m., New York City time, one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the 

50

 

prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that if a notice of prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Revolving Borrowing or Term Loan shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

SECTION 2.12  Fees.

(a)The Borrower agrees to pay to the Administrative Agent a commitment fee for the account of each Revolving Lender, which shall accrue at the Applicable Rate on the daily amount of the undrawn portion of the Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders’ Revolving Commitments terminate; it being understood that the LC Exposure of a Lender shall be included and the Swingline Exposure of a Lender shall be excluded in the drawn portion of the Revolving Commitment of such Lender for purposes of calculating the commitment fee.  Accrued commitment fees shall be payable in arrears on the fifteenth (15th) day following such last day of March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b)The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in each outstanding Letter of Credit, which shall accrue on the daily maximum amount then available to be drawn under such Letter of Credit at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans, during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank for its own account a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, which shall accrue at the rate or rates per annum separately agreed upon between the Borrower and such Issuing Bank on the daily maximum amount then available to be drawn under such Letter of Credit, during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure with respect to Letters of Credit issued by such Issuing Bank, as well as such Issuing Bank’s standard fees and commissions with respect to the issuance, amendment  or extension of any Letter of Credit  and other processing fees, and other standard costs and charges, of such Issuing Bank relating to Letters of Credit as from time to time in effect.   Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the fifteenth (15th) Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

51

 

(c)The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d)All fees payable hereunder shall be paid on the dates due, in dollars in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.

SECTION 2.13  Interest.

(a)The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)Notwithstanding the foregoing, during the occurrence and continuance of a Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

(d)Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14  Alternate Rate of Interest; Illegality.

(a)Subject to clauses (c), (d), (e), (f), (g) and (h) of this Section 2.14, if prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(i)the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current 

52

 

basis) for such Interest Period; provided that no Benchmark Transition Event shall have occurred at such time; or

(ii)the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (A) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted, at Borrower’s election, into an ABR Borrowing on the last day of the then current Interest Period applicable thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b)If any Lender determines that any Requirement of Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurodollar Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either prepay or convert, at Borrower’s election, all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans.  Upon any such prepayment or conversion, the Borrower will also pay accrued interest on the amount so prepaid or converted.

(c)Notwithstanding anything to the contrary herein or in any other Loan Document,(and any Swap Agreement shall be deemed not to be a “Loan Document” for purposes of this Section 2.14), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders of each Class.

53

 

(d)Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that, this clause (d) shall not be effective unless the Administrative Agent has delivered to the Lenders and the Borrower a Term SOFR Notice.  For the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion.

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

(f)The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below and (v) the commencement or conclusion of any Benchmark Unavailability Period.  Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14.

(g)Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or LIBO Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor. 

(h)Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Eurodollar Borrowing of, conversion to or continuation of Eurodollar Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to ABR Loans.  During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component 

54

 

of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR.

SECTION 2.15  Increased Costs.  

(a)If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

(ii)impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

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

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

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

(c)A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower, together with any supporting documentation reasonably requested by Borrower, and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

55

 

(d)Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16  Break Funding Payments.

  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto other than a mandatory conversion pursuant to Section 2.14, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower, together with any supporting documentation reasonably requested by Borrower, and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 2.17  Withholding of Taxes; Gross-Up.

(a)Payments Free of Taxes.  Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by Loan Parties.  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

56

 

(c)Evidence of Payment.  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e)Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to setoff and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f)Status of Lenders.

(i)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

57

 

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

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

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

(2)in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed copy of IRS Form W‐8ECI;

(3)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit C‐1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an executed copy of IRS Form W 8BEN or IRS Form W‐8BEN‐E, as applicable; or

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

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

58

 

the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

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

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

(g)Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph (g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)Survival.  Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the Payment in Full of the Secured Obligations).

(i)Defined Terms.  For purposes of this Section 2.17, the term “Lender” includes any Issuing Bank and the term “applicable law” includes FATCA.

59

 

SECTION 2.18  Payments Generally; Allocation of Proceeds; Sharing of Setoffs.

(a)The Borrower shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., New York City time, on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without setoff, recoupment or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, Chicago, IL, 60603, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.

(b)All payments and any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower), or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent, the Swingline Lender and the Issuing Bank from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), second, to pay any fees, indemnities, or expense reimbursements then due to the Lenders from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), third, to pay interest then due and payable on the Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC Disbursements, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate LC Exposure, to be held as cash collateral for such Obligations, and to pay any amounts owing in respect of Swap Agreement Obligations and Banking Services Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.22, ratably (with amounts allocated to the Term Loans of any Class applied to reduce the subsequent scheduled repayments of the Term Loans of such Class to be made pursuant to Section 2.10 ratably based on the amount of such scheduled repayments), and fifth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender from the Borrower or any other Loan Party.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (i) on the expiration date of the Interest Period applicable thereto, or (ii) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any such event, the Borrower shall pay the break funding payment required in accordance with Section 2.16.  The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.  Notwithstanding the foregoing, Secured Obligations arising under Banking Services Obligations or Swap Agreement Obligations shall be excluded from the application described above and paid in clause fifth if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may have reasonably requested from the applicable provider of such Banking Services or Swap Agreements.

(c)Upon the failure to pay any amounts payable under the Loan Documents or upon the request to do so by the Borrower, the Borrower hereby irrevocably authorizes the Administrative Agent to 

60

 

charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d)If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(e)Unless the Administrative Agent shall have received, prior to any date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank pursuant to the terms hereof or any other Loan Document (including any date that is fixed for prepayment by notice from the Borrower to the Administrative Agent pursuant to Section 2.11(e)), notice from the Borrower that the Borrower will not make such payment or prepayment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f)The Administrative Agent may from time to time provide the Borrower with account statements or invoices with respect to any of the Secured Obligations (the “Statements”).  The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrower’s convenience.  Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations.  If the Borrower pays the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrower shall not be in default of payment with respect to the billing period indicated on such Statement; provided that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at another time.

61

 

SECTION 2.19  Mitigation Obligations; Replacement of Lenders.

(a)If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment, provided that such Lender shall have provided supporting documentation reasonably requested by Borrower.

(b)If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender) pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that (i) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (ii) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

SECTION 2.20  Defaulting Lenders.

  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

62

 

(b)any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.18(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (d) below.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;

(c)such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Commitment and Revolving Exposure and, if applicable, Term Commitment and Term Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder or under any other Loan Document; provided that, except as otherwise provided in Section 9.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

(d)if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i)all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender (other than, in the case of a Defaulting Lender that is a Swingline Lender, the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but 

63

 

only (x) to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender’s Revolving Exposure to exceed its Revolving Commitment;

(ii)if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v)if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(e)so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(d), and Swingline Exposure related to any such newly made Swingline Loan or LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(d)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

64

 

SECTION 2.21  Returned Payments.

  If, after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender.  The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds.  The provisions of this Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22  Banking Services and Swap Agreements.

  Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or contingent).  In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations.  The most recent information provided to the Administrative Agent shall be used in determining which tier of the waterfall, contained in Section 2.18(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed.  For the avoidance of doubt, so long as Chase or its Affiliate is the Administrative Agent, neither Chase nor any of its Affiliates providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall be required to provide any notice described in this Section 2.22 in respect of such Banking Services or Swap Agreements.

Article III
Representations and Warranties

Each Loan Party represents and warrants to the Lenders that (and where applicable, agrees):

SECTION 3.01  Organization; Powers.

  Each Loan Party and each Subsidiary is duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02  Authorization; Enforceability.

  The Transactions are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and, if required, actions by equity holders.  Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03  Governmental Approvals; No Conflicts.

  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law 

65

 

applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary, and (d) will not result in the creation or imposition of, or other requirement to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

SECTION 3.04  Financial Condition; No Material Adverse Change.

(a)The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended June 30, 2020, reported on by Deloitte, LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended April 4, 2021, certified by its chief financial officer.  Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments all of which, when taken as a whole, would not be materially adverse and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since June 30, 2020.

SECTION 3.05  Properties. 

(a)As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by any Loan Party.  Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists.  Each of the Loan Parties and each Subsidiary has good and indefeasible title to, or valid leasehold interests in, all of its real and personal property, free of all Liens other than those permitted by Section 6.02.

(b)Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of all such as is registered with the United States Patent and Trademark Office or the United States Copyright Office, which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by each Loan Party and each Subsidiary does not infringe in any material respect upon the rights of any other Person, and each Loan Party’s and each Subsidiary’s rights thereto are not subject to any licensing agreement or similar arrangement.

SECTION 3.06  Litigation and Environmental Matters. 

(a)There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any Loan Document or the Transactions.

(b)Except for the Disclosed Matters, (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any  Subsidiary (A) has 

66

 

failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law (B) has become subject to any Environmental Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of any basis for any Environmental Liability.

(c)Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

SECTION 3.07  Compliance with Laws and Agreements; No Default.

  Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (i) all Requirement of Law applicable to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property.  No Default has occurred and is continuing.

SECTION 3.08  Investment Company Status.

  No Loan Party or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09  Taxes.

  Each Loan Party and each Subsidiary has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves.  No tax liens have been filed and no claims are being asserted with respect to any such taxes.

SECTION 3.10  ERISA.

  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87 or subsequent recodification thereof, as applicable) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

SECTION 3.11  Disclosure.  

(a)The Loan Parties have disclosed to the Lenders all matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  To the knowledge of Borrower, none of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of the Effective Date.

67

 

(b)As of the Effective Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

SECTION 3.12  Material Agreements.

  No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing Material Indebtedness.

SECTION 3.13  Solvency.  

(a)Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

(b)No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes that it or any Subsidiary will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.14  Insurance.

  Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date.  As of the Effective Date, all premiums in respect of such insurance have been paid.  The Loan Parties believe that the insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is customary for companies engaged in the same or similar businesses operating in the same or similar locations.

SECTION 3.15  Capitalization and Subsidiaries.

  Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to the Borrower of each Subsidiary, (b) a true and complete listing of each class of each of the Borrower’s authorized Equity Interests, of which all of such issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and (c) the type of entity of the Borrower and each Subsidiary.  All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.

SECTION 3.16  Security Interest in Collateral.

  The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title), to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

68

 

SECTION 3.17  Employment Matters.

  As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened.  The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters.  All payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary.

SECTION 3.18  Margin Regulations.

  No Loan Party is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of Credit hereunder will be used to buy or carry any Margin Stock.  Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated basis) will be Margin Stock.

SECTION 3.19  Use of Proceeds.

  The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20  No Burdensome Restrictions.

  No Loan Party is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

SECTION 3.21  Anti-Corruption Laws and Sanctions.

  Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and, to the knowledge of such Loan Party, its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in any Loan Party being designated as a Sanctioned Person.  None of (a) any Loan Party, any Subsidiary, any of their respective directors or officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.  No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions. 

SECTION 3.22   Affected Financial Institutions.

  No Loan Party is an Affected Financial Institution.

SECTION 3.23  Plan Assets; Prohibited Transactions.

  None of the Loan Parties or any of their Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.  

SECTION 3.24  Common Enterprise.

  The successful operation and condition of each of the Loan Parties is dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party.  Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive 

69

 

benefit), directly and indirectly, from (a) successful operations of each of the other Loan Parties and (b) the credit extended by the Lenders to the Borrower hereunder, both in their separate capacities and as members of the group of companies.  Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in furtherance of its direct and/or indirect business interests, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

Article IV
Conditions

SECTION 4.01  Effective Date.

  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)Credit Agreement and Loan Documents.  The Administrative Agent (or its counsel) shall have received (i) from each party hereto a counterpart of this Agreement signed on behalf of such party (which, subject to Section 9.06(b), may include any Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders, all in form and substance satisfactory to the Administrative Agent.

(b)Financial Statements and Projections.  The Lenders shall have received (i) audited consolidated financial statements of the Borrower for the 2019 and 2020 fiscal years, (ii) unaudited interim consolidated financial statements of the Borrower for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the Borrower, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph and (iii) satisfactory Projections through the period ending June 30, 2026.

(c)Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates.  The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) a long form good standing certificate for each Loan Party from its jurisdiction of organization.

(d)No Default Certificate.  The Administrative Agent shall have received a certificate, signed by the chief financial officer of the Borrower and each other Loan Party, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

70

 

(e)Fees.  The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses required to be reimbursed for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date.  All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Effective Date.

(f)Lien Searches.  The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each Loan Party and each jurisdiction where assets of the Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

(g)Pay-Off Letter.  The Administrative Agent shall have received satisfactory pay-off letters for all existing Indebtedness required to be repaid and which confirms that all Liens upon any of the property of the Loan Parties constituting Collateral will be terminated concurrently with such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have been cash collateralized or supported by a Letter of Credit.

(h)Funding Account.  The Administrative Agent shall have received a notice setting forth the deposit account of the Borrower (the “Funding Account”) to which the Administrative Agent is authorized by the Borrower to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

(i)Solvency.  The Administrative Agent shall have received a solvency certificate signed by a Financial Officer dated the Effective Date in form and substance reasonably satisfactory to the Administrative Agent.

(j)Pledged Equity Interests; Stock Powers; Pledged Notes.  The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(k)Filings, Registrations and Recordings.  Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.

(l)Insurance.  The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.10 of this Agreement and Section 4.12 of the Security Agreement.

(m)Letter of Credit Application.  The Administrative Agent shall have received a properly completed letter of credit application (whether standalone or pursuant to a master agreement, as applicable) if the issuance of a Letter of Credit will be required on the Effective Date. 

(n)Legal Due Diligence.  The Administrative Agent and its counsel shall have completed all legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.

71

 

(o)USA PATRIOT Act, Etc.  (i) The Administrative Agent shall have received, (x) at least five (5) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to the extent requested in writing of the Borrowers at least ten (10) days prior to the Effective Date, and (y) a properly completed and signed IRS Form W‐8 or W‐9, as applicable, for each Loan Party, and (ii) to the extent the Borrower qualify as a “legal entity customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has requested, in a written notice to the Borrower at least ten (10) days prior to the Effective Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).

(p)Other Documents.  The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrower, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., New York Citytime, on June 28, 2021 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

SECTION 4.02  Each Credit Event.

  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date.

(b)At the time of and immediately after giving effect to such Borrowing or the issuance, amendment or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

(c)After giving effect to any Borrowing or the issuance, amendment or extension of any Letter of Credit, Availability shall not be less than zero.

Each Borrowing and each issuance, amendment or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) and (c) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a) or (b) or (c) of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no obligation to, issue, amend or extend, or cause to be issued, amended or extended, any Letter of Credit for the ratable account and risk of Lenders from time to time if the Administrative Agent believes that making such Loans or issuing, amending or extending, or causing the issuance, amendment or extension of, any such Letter of Credit is in the best interests of the Lenders.

72

 

Article V
Affirmative Covenants

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01  Financial Statements and Other Information.

  The Borrower will furnish to the Administrative Agent and each Lender:

(a)as soon as available (but only if Borrower is no longer required under the Exchange Act to file periodic reports with the SEC, e.g. Annual Reports on Form 10-K), and in any event within the earlier of (i) five (5) days after such related filing (if any) is due, and (ii) within one hundred twenty (120) days after the close of each fiscal year of the Borrower, its audited consolidated and consolidating balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing and acceptable to the Administrative Agent (without a “going concern” or like qualification, commentary or exception, and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b)as soon as available (but only if Borrower is no longer required under the Exchange Act to file periodic reports with the SEC, e.g. Quarterly Reports on Form 10-Q), and in any event within the earlier of (i) five (5) days after such related filing (if any) is due, and (ii) forty-five (45) days after the end of the first three fiscal quarters of the Borrower, its consolidated and consolidating balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c)Within the earlier of (i) forty-five (45) days after the end of each of the first three fiscal quarters of the Borrower and one hundred twenty (120) days after the close of each fiscal year of the Borrower and (ii) concurrently with any delivery of financial statements under clause (a) or (b) above, a Compliance Certificate (A) certifying, in the case of the financial statements delivered under clause (a) or (b) above, as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (B) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (C) setting forth reasonably detailed calculations demonstrating compliance with Section 6.12 and (D) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

(d)as soon as available, but in any event no later than 45 days after the beginning of each fiscal year of the Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating 

73

 

balance sheet, income statement and cash flow statement) of the Borrower for each month of such fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

(e)promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;

(f)promptly after receipt thereof by the Borrower or any Subsidiary, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by the SEC or such other agency regarding financial or other operational results of the Borrower or any Subsidiary thereof; 

(g)promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request;

(h)promptly following any request therefor, (x) such other information regarding the operations, material changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender (through Administrative Agent) may reasonably request and (y) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation; and

(i)promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if the Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.

Documents required to be delivered pursuant to Section 5.01(a), (b) or (e) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent).

SECTION 5.02  Notices of Material Events.

  The Borrower will furnish to the Administrative Agent and each Lender prompt (but in any event within any time period that may be specified below) written notice of the following:

(a)the occurrence of any Default;

74

 

(b)receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced against any Loan Party or any Subsidiary that (i) if adversely determined, could reasonably be expected to have a Material Adverse Effect, (ii) seeks injunctive relief, (iii) is instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability in excess of $5,000,000, (vi) asserts liability on the part of any Loan Party or any Subsidiary in excess of $5,000,000 in respect of any tax, fee, assessment, or other governmental charge, or (vii) involves any product recall with potential liability or cost in excess of $5,000,000;

(c)any material change in accounting or financial reporting practices by the Borrower or any Subsidiary;

(d)the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $1,000,000; 

(e)any termination, by the floorplan financing party, of any agreement regarding floor planning financing arrangements, that includes Floorplan Repurchase Obligations;

(f)any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and

(g)any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

Each notice delivered under this Section (i) shall be in writing, (ii) shall contain a heading or a reference line that reads “Notice under Section 5.02 of Credit Agreement dated June 28, 2021 and (iii) shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03  Existence; Conduct of Business.

  Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except to the extent that such shall not result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted.

SECTION 5.04  Payment of Obligations.

  Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect; provided, however, that each Loan Party will, and will cause each Subsidiary to,  remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

75

 

SECTION 5.05  Maintenance of Properties.

  Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

SECTION 5.06  Books and Records; Inspection Rights.

  Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Loan Party’s premises field examinations of the Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants (and hereby authorizes the Administrative Agent and each Lender to contact its independent accountants directly) and to provide contact information for each bank where each Loan Party has a depository and/or securities account and each such Loan Party hereby authorizes the Administrative Agent and each Lender to contact the bank(s) in order to request bank statements and/or balances, all at such reasonable times and as often as reasonably requested.  The Loan Parties acknowledge that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the Lenders. Notwithstanding the foregoing, unless an Event of Default has occurred and is continuing, in no event shall the Loan Parties be required to pay the costs of more than one (1) such visit, inspection, or field examination of the Administrative Agent per calendar year.

SECTION 5.07  Compliance with Laws and Material Contractual Obligations.

  Each Loan Party will, and will cause each Subsidiary to, (i) comply in all material respects with each material Requirement of Law applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party. Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08  Use of Proceeds.

(a)The proceeds of the Loans and the Letters of Credit will be used only to refinance certain Indebtedness, to pay fees and expenses in connection with the closing of the Transactions, and to otherwise finance the working capital needs and general corporate purposes of the Borrower and its Subsidiaries in the ordinary course of business.  No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, (i) for any purpose that entails a violation of any of the regulations of the Federal Reserve Board, including Regulations T, U and X or (ii) to make any Acquisition other than Permitted Acquisitions. 

(b)The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

76

 

SECTION 5.09  Accuracy of Information.

  The Loan Parties will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by the Borrower on the date thereof as to the matters specified in this Section 5.09; provided that, with respect to the Projections, the Loan Parties will cause the Projections to be prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 5.10  Insurance.

  Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents.  The Borrower will furnish to the Lenders, upon request of the Administrative Agent, but no less frequently than annually, information in reasonable detail as to the insurance so maintained.

SECTION 5.11  Reserved.

  

SECTION 5.12  Casualty and Condemnation.

  The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Collateral Documents.

SECTION 5.13  Depository Banks.

  The Borrower and each Domestic Subsidiary will maintain the Administrative Agent as its principal depository and disbursement bank, provided that the Borrower shall have a period of one hundred (120) days from the Effective Date (or such longer period as may be agreed to by the Administrative Agent) to initially comply with this Section 5.13.

SECTION 5.14  Additional Collateral; Further Assurances.

(a)Subject to applicable Requirement of Law, each Loan Party will cause each of its Subsidiaries formed or acquired after the date of this Agreement to become a Loan Party by executing a Joinder Agreement.  In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to comply with the applicable “know your customer” rules and regulations, including the USA Patriot Act.  Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral, including any parcel of real property located in the U.S. owned by any Loan Party.

(b)Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such 

77

 

Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956‐2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956‐2(c)(2)) in each Foreign Subsidiary directly owned by the Borrower or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

(c)Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by any Requirement of Law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties. Notwithstanding the foregoing, at any time after an Event of Default has occurred, each Loan Party will, upon the request of the Administrative Agent, cause each Foreign Subsidiary to become a Loan Party and a Loan Guarantor and to grant Liens to the Administrative Agent on its assets and have the balance of its Equity Interests pledged to the Administrative Agent.

(d)If any material assets (including any real property or improvements thereto or any interest therein) are acquired by any Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower will (i) notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii)  take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.

SECTION 5.15  Post Closing Requirements.

(a)No later than ninety (90) days after the Effective Date, each Loan Party will provide to the Administrative Agent, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of such Loan Party.

Article VI
Negative Covenants

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 6.01  Indebtedness.

  No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:

(a)the Secured Obligations;

78

 

(b)Indebtedness existing on the date hereof and set forth in Schedule 6.01 (excluding, however, following the making of the initial Loan hereunder, the Indebtedness to be repaid with the proceeds of such Loans as indicated on Schedule 6.01) and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with clause (f) hereof;

(c)Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or any other Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

(d)Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by the Borrower or any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

(e)Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed $5,000,000 at any time outstanding;

(f)Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness described in clauses (b) and (e) and (j) hereof (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (i) such Refinance Indebtedness does not increase the principal amount or interest rate of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of such Refinance Indebtedness are not less favorable to the obligor thereunder than the original terms of such Original Indebtedness and (vi) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness;

(g)Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(h)Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

79

 

(i)Subordinated Indebtedness in an aggregate principal amount not exceeding $2,000,000 at any time outstanding; 

(j)Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (j) together with any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $2,000,000 at any time outstanding; 

(k)Indebtedness from any earn-outs arising from Permitted Acquisitions in an aggregate principal amount not exceeding $20,000,000 at any time outstanding;

(l)Floorplan Repurchase Obligations; 

(m)Floorplan First Loss Guaranty Obligations in an aggregate principal amount not exceeding $5,000,000; and

(n)other unsecured Indebtedness in an aggregate principal amount not exceeding $5,000,000 at any time outstanding.

SECTION 6.02  Liens.

  No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

(a)Liens created pursuant to any Loan Document;

(b)Permitted Encumbrances;

(c)any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d)Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary;

(e)any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be;

80

 

(f)Liens of a collecting bank arising in the ordinary course of business under Section 4‐210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(g)Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06; and

(h)Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary.

SECTION 6.03  Fundamental Changes.

(a)No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise Dispose of all any substantial part of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary of the Borrower may merge into the Borrower in a transaction in which the Borrower is the surviving entity, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b)No Loan Party will, nor will it permit any Subsidiary to, consummate a Division as the Dividing Person, without the prior written consent of Administrative Agent.  Without limiting the foregoing, if any Loan Party that is a limited liability company or a limited partnership consummates a Division (with or without the prior consent of Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in Section 5.14 and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

(c)No Loan Party will, nor will it permit any Subsidiary to, engage in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related to or incidental to the marine industry.

(d)No Loan Party will, nor will it permit any Subsidiary to change its fiscal year or any fiscal quarter from the basis in effect on the Effective Date; provided, however, that the Borrower shall have the right to change its fiscal year without the approval of Administrative Agent or Lenders one time during the period commencing on the Effective Date through and including the later of the Term Loan Maturity Date or the Revolving Credit Maturity Date, subject to an agreed upon notice period

(e)No Loan Party will change the accounting basis upon which its financial statements are prepared.

(f)No Loan Party will change the tax filing elections it has made under the Code.

SECTION 6.04  Investments, Loans, Advances, Guarantees and Acquisitions.

  No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist 

81

 

any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

(a)Permitted Investments, subject to control agreements in favor of the Administrative Agent for the benefit of the Secured Parties or otherwise subject to a perfected security interest in favor of the Administrative Agent for the benefit of the Secured Parties;

(b)investments in existence on the date hereof and described in Schedule 6.04;

(c)investments by the Borrower and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in Section 5.14) and (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under Section 6.04(d) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $5,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(d)loans or advances made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under Section 6.04(c) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $5,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(e)Guarantees constituting Indebtedness permitted by Section 6.01, provided that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d)) shall not exceed $5,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(f)loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $1,000,000 in the aggregate at any one time outstanding;

(g)notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(h)investments in the form of Swap Agreements permitted by Section 6.07;

(i)investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any Subsidiary (including in connection with a Permitted Acquisition), so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(j)investments received in connection with the disposition of assets permitted by Section 6.05;

82

 

(k)investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”; 

(l)as part of a Permitted Acquisition; and

(m)other investments, loans and advances in addition to those otherwise permitted by this Section in an amount not to exceed $5,000,000 in the aggregate at any one time outstanding.

SECTION 6.05  Asset Sales.

  No Loan Party will, nor will it permit any Subsidiary to, Dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 6.04), except:

(a)Dispositions of (i) Inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus Equipment or property in the ordinary course of business;

(b)Dispositions of assets to the Borrower or any Subsidiary, provided that (i) no Loan Party will Dispose of any material trademarks, tradenames, copyrights, patents, other intellectual property or key dealer relationships to a Subsidiary that is not a Loan Party and (ii) any other such Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09; 

(c)Dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

(d)Dispositions of Permitted Investments and other investments permitted by clauses (i) and (k) of Section 6.04;

(e)Sale and Leaseback Transactions permitted by Section 6.06;

(f)Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary; 

(g)Dispositions resulting from donations to nonprofit organizations not to exceed $1,000,000 in the aggregate for any fiscal year of the Borrower; and

(h)Dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets Disposed of in reliance upon this paragraph (h) shall not exceed $5,000,000 during any fiscal year of the Borrower;

provided that all Dispositions permitted under this Section 6.05 (other than those permitted by paragraphs (b), (d) and (f) above) shall be made for fair value and for at least 75% cash consideration.

SECTION 6.06  Sale and Leaseback Transactions.

  No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated 

83

 

within 90 days after the Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

SECTION 6.07  Swap Agreements.

  No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any Subsidiary), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

SECTION 6.08  Restricted Payments; Certain Payments of Indebtedness.

(a)No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock,

(ii)Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, 

(iii)the Borrower may make Restricted Payments during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, and

(iv)the Borrower may make a Restricted Payment if the Borrower shall certify to the Administrative Agent (and provide the Administrative Agent pro forma calculations in form and substance reasonably satisfactory to the Administrative Agent) that after giving effect to such Restricted Payment, on a pro forma basis (i) Liquidity will not be less than $5,000,000, (ii) the Total Net Leverage Ratio will not be greater than the level that would then otherwise be required under Section 6.12 minus 0.25 to 1.00 and (iii) the Fixed Charge Covenant Ratio will not be less than 1.25 to 1.

(b)No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)payment of Indebtedness created under the Loan Documents;

(ii)payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under Section 6.01, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii)refinancings of Indebtedness to the extent permitted by Section 6.01; and

84

 

(iv)payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05.

SECTION 6.09  Transactions with Affiliates.

  No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) any investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04(f), (g) the payment of reasonable fees to directors of the Borrower or any Subsidiary who are not employees of the Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrower or its Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Borrower’s board of directors.

SECTION 6.10  Restrictive Agreements.

  No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

SECTION 6.11  Amendment of Material Documents.

  No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, (b) its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, to the extent any such amendment, modification or waiver would be adverse to the Lenders.

SECTION 6.12  Financial Covenants.

  

(a)Fixed Charge Coverage Ratio.  The Borrower will not permit the Fixed Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, to be less than 1.15 to 1.00.

85

 

(b)Total Net Leverage Ratio.  The Borrower will not permit the Total Net Leverage Ratio, on the last day of any fiscal quarter, to be greater than 2.75 to 1.00; provided, however, that for any fiscal quarter in which one or more Permitted Acquisitions with a total consideration of greater than $20,000,000 in the aggregate occur, the following shall apply for such fiscal quarter and the three full fiscal quarters thereafter: the Borrower will not permit the Total Net Leverage Ratio (i) on the last day of the fiscal quarter during which such Permitted Acquisition(s) occur and the last day of the following full fiscal quarter, to be greater than the lesser of (A) the level that would then otherwise be required plus 0.50 to 1.00 and (B) 3.25 to 1.00, and (ii) on the last day of second full and third full fiscal quarters occurring after such Permitted Acquisition(s), to be greater than the lesser of (A) the level that would then otherwise be required plus 0.25 to 1.00 and (B) 3.25 to 1.00.

SECTION 6.13  Environmental Covenant.

  No Loan Party shall use nor permit any third party to use, generate, manufacture, produce, store or Release on, under or about any Real Property, or transfer to or from any Real Property, any Hazardous Materials except De Minimis Amounts in compliance with all applicable Environmental Laws, provided that if any third party, by act or omission, by intent or by accident, allows any foregoing action to occur, the Loan Party shall promptly remedy such condition, at its sole expense and responsibility in accordance with Section 9.03(b)(iii).  Furthermore, no Loan Party shall permit any Liens under any Environmental Laws to be placed on any portion of the Real Property.

SECTION 6.14  Negative Pledge on Real Property.

  No Loan Party shall:

(a)Create or permit any Lien, encumbrance, charge, or security interest of any kind to exist on any Real Property owned by a Loan Party, except as otherwise permitted hereunder;

(b)Transfer, sell, assign or in any manner dispose of any Real Property owned by a Loan Party or any interest therein, except as otherwise permitted hereunder; and

(c)Grant to any other party a negative pledge agreement, agreement not to sell or encumber, or similar agreement with respect to Real Property owned by a Loan Party, except as otherwise permitted hereunder.

Article VII
Events of Default

If any of the following events (“Events of Default”) shall occur:

(a)the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c)any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made, except to the extent the same relate 

86

 

to an earlier date in which case such representations or warranties shall be true and correct in all material respects as of such earlier date;

(d)any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI;

(e)any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d)), and such failure shall continue unremedied for a period of (i) 5 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03, 5.04 or 5.10 of this Agreement or (ii) 30 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement;

(f)any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable or within applicable notice and cure periods;

(g)any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05;

(h)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)any Loan Party or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)any Loan Party or any Subsidiary shall become unable, admit in writing its inability, or publicly declare its intention not to, or fail generally, to pay its debts as they become due;

(k)one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against any Loan Party, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall 

87

 

not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary  to enforce any such judgment or any Loan Party or any Subsidiary shall fail within thirty (30) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(l)an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $5,000,000 in any year;

(m)a Change in Control shall occur;

(n)the occurrence of any “default”, as defined in any Loan Document (other than this Agreement), or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;

(o)any default shall occur under (i) Indebtedness of the Borrower or any Subsidiary in connection with Floorplan First Loss Guaranty Obligations aggregating in excess of $2,000,000 or (ii) Floorplan Repurchase Obligations aggregating in excess of $2,000,000, and the expiration of any applicable notice and cure periods;

(p)the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 10.08 or any notice of termination delivered pursuant to the terms of any Obligation Guaranty;

(q)except as permitted by the terms of any Collateral Document or pursuant hereto, (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien;

(r)any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document; 

(s)any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or

(t)any Loan Party is criminally indicted or convicted under any law that may reasonably be expected to lead to a forfeiture of any property of such Loan Party having a fair market value in excess of $2,000,000;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the 

88

 

following actions, at the same or different times:  (i) terminate the Commitments (including the Swingline Commitment), whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt,  any break funding payment) and other obligations of the Borrower accrued hereunder and under any other Loan Document, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.06(j) hereof; and in the case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments (including the Swingline Commitment) shall automatically terminate and the principal of the Loans then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrower accrued hereunder and under any other Loan Documents, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

Article VIII
The Administrative Agent

SECTION 8.01  Authorization and Action.

(a)Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and each Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender and each Issuing Bank authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto.  In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender and each Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender’s or such Issuing Bank’s behalf.  Without limiting the foregoing, each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, and to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

(b)As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and each Issuing Bank; provided, however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the 

89

 

Lenders and the Issuing Banks with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided, further, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise of any such instructed action and may refrain from acting until such clarification or direction has been provided.  Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity.  Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Banks (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature.  Without limiting the generality of the foregoing:

(i)the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term “agent” (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby; and

(ii)nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account;

(d)The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement.  The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

90

 

(e)No Arranger shall have any obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.

(f)In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under Sections 2.12, 2.13, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and

(ii)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03).  Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

(g)The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except solely to the extent of the Borrower’s rights to consent pursuant to and subject to the conditions set forth in this Article, none of the Borrower or any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions.  Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

SECTION 8.02  Administrative Agent’s Reliance, Limitation of Liability, Etc.

(a)Neither the Administrative Agent nor any of its Related Parties shall be (i) liable  for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this 

91

 

Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (including, for the avoidance of doubt, in connection with the Administrative Agent’s reliance on any Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

(b)The Administrative Agent shall be deemed not to have knowledge of any (i) notice of any of the events or circumstances set forth or described in Section 5.02 unless and until written notice thereof stating that it is a “notice under Section 5.02” in respect of this Agreement and identifying the specific clause under said Section is given to the Administrative Agent by the Borrower, or (ii) notice of any Default or Event of Default unless and until written notice thereof (stating that it is a “notice of Default” or a “notice of an Event of Default”) is given to the Administrative Agent by the Borrower, a Lender or an Issuing Bank.  Further, the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be such items) expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

(c)Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel (including counsel to the Borrower), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

SECTION 8.03  Posting of Communications.

(a)The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Lenders and the Issuing Banks by posting the Communications 

92

 

on IntraLinksTM, DebtDomain, SyndTrak, ClearPar or any other electronic system chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).

(b)Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, each of the Issuing Banks and the Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there may be confidentiality and other risks associated with such distribution.  Each of the Lenders, each of the Issuing Banks and the Borrower hereby approves distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

(c)THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”.  THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

(d)Each Lender and each Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents.  Each Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender’s or Issuing Bank’s (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

(e)Each of the Lenders, each of the Issuing Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, 

93

 

store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.

(f)Nothing herein shall prejudice the right of the Administrative Agent, any Lender or any Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 8.04  The Administrative Agent Individually.

  With respect to its Commitment, Loans (including Swingline Loans) and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or Issuing Bank, as the case may be.  The terms “Issuing Banks”, “Lenders”, “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders, as applicable.  The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Banks.

SECTION 8.05  Successor Administrative Agent.

(a)The Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to the Lenders, the Issuing Banks and the Borrower, whether or not a successor Administrative Agent has been appointed.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank.  In either case, such appointment shall be subject to the prior written approval of the Borrower (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing).  Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent.  Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents.  Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

(b)Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties, and continue to be entitled to the rights set forth in such Collateral Document 

94

 

and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Security Document, including any action required to maintain the perfection of any such security interest),  and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender and each Issuing Bank.  Following the effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

SECTION 8.06  Acknowledgements of Lenders and Issuing Banks.

(a)Each Lender and each Issuing Bank represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender or Issuing Bank, in each case in the ordinary course of business, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender and each Issuing Bank agrees not to assert a claim in contravention of the foregoing),(iii) it has, independently and without reliance upon the Administrative Agent, any Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder and (iv) it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender or such Issuing Bank, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities.  Each Lender and each Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b)Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan Document pursuant to which it shall have become a Lender hereunder.

95

 

(c)(i) Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine.  A notice of the Administrative Agent to any Lender under this Section 8.06(c) shall be conclusive, absent manifest error.

(ii)  Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment.  Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(iii)  The Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party.

(iv)  Each party’s obligations under this Section 8.06(c) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.

(d)Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as 

96

 

on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys’ fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

SECTION 8.07  Collateral Matters.

(a)Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with respect to a Secured Party’s right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof.  In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the UCC.  In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

(b)In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the obligations under which constitute Secured Obligations, will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document.  By accepting the benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

(c)The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(b).  The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

SECTION 8.08  Credit Bidding.

  The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the 

97

 

Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law.  In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for  the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase).  In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle  and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.  Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

SECTION 8.09  Certain ERISA Matters.

(a)Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

98

 

(i)such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

(ii)the transaction exemption set forth in one or more PTEs, such as PTE 84‐14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95‐60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90‐1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91‐38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96‐23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii)(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84‐14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84‐14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84‐14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv)such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that none of the Administrative Agent, or any Arranger or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).

(c)The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Agreement and any other Loan Documents (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, 

99

 

fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

SECTION 8.10  Flood Laws.

  Chase has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”).  Chase, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws.  However, Chase reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

Article IX
Miscellaneous

SECTION 9.01  Notices.

(a)Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, as follows:

(i)if to any Loan Party, to it in care of the Borrower at:

 

	
 
	
100 Cherokee Cove
	

Vonore, Tennessee 37885
Attention: Tim Oxley, CFO

 

(ii)if to the Administrative Agent, the Swingline Lender, or Chase in its capacity as an Issuing Bank, to JPMorgan Chase Bank, N.A. at:

	
 
	
JPMorgan Chase Bank, N.A.
Middle Market Servicing
10 South Dearborn, Floor L2
Suite IL1-1145
Chicago, IL 60603-2300
Attention: 
	

 

With a copy to:

JPMorgan Chase Bank, N.A.

Liberty Tower 

605 Chestnut Street, Ste. 1060

Chattanooga, Tennessee 37450

	
 
	
Attention: Brandon Abney
	

100

 

	
 
		

(iii)if to any other Lender or Issuing Bank, to it at its address or fax number set forth in its Administrative Questionnaire.

All such notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail shall be deemed to have been given when received, provided that if not given during normal business hours for the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (ii) delivered through Electronic Systems or Approved Electronic Platforms, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

(b)Notices and other communications to the Borrower, any Loan Party, the Lenders and the Issuing Banks hereunder may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable, or pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  Each of the Administrative Agent and the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by using Electronic Systems or Approved Electronic Platforms, as applicable, pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.  Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

(c)Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02  Waivers; Amendments.

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

101

 

(b)Subject to Section 2.14(c), (d) and (e) and Section 9.02(e) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified (other than as set forth in Section 2.09) except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby (except that any amendment or modification of the financial covenants in this Agreement (or defined terms used in the financial covenants in this Agreement) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B)), (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment (other than, in each case, any prepayment required to be made pursuant to Section 2.11(d)), or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.09(c) or Section 2.18(b) or (d) in a manner that would alter the ratable reduction of Commitments or the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (E) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (F) change Section 2.20, without the consent of each Lender (other than any Defaulting Lender), (G) release any Guarantor from its obligation under its Loan Guaranty or Obligation Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), (H) except as provided in clause (c) of this Section or in any Collateral Document, release all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender) or (I) subordinate the Obligations, or any Lien securing the Obligations, to Indebtedness or Liens of any Person other than the Lenders under this Agreement; provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being understood that any amendment to Section 2.20 shall require the consent of the Administrative Agent, the Swingline Lender and the Issuing Bank); provided, further, that no such agreement shall amend or modify the provisions of Section 2.06 without the prior written consent of the Administrative Agent and the Issuing Banks. Notwithstanding anything to the contrary herein, any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.  The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04.  Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrower and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.

(c)The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations, and the cash 

102

 

collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty or Obligation Guaranty provided by such Subsidiary, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII.  Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that the Administrative Agent may, in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $1,000,000 during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Borrower as to the value of any Collateral to be so released, without further inquiry).  Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

(d)If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower, the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.  Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (b) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

103

 

(e)Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03  Expenses; Limitation of Liability; Indemnity; Etc.

(a)Expenses.  The Loan Parties, jointly and severally, shall pay all (i) reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through an Electronic System or Approved Electronic Platform) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  Expenses being reimbursed by the Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with:

(A)appraisals and insurance reviews;

(B)field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination;

(C)background checks regarding senior management and/or key investors, as deemed necessary or appropriate in the sole discretion of the Administrative Agent;

(D)Taxes, fees and other charges for (i) lien and title searches and title insurance and (ii) filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

(E)sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

(F)forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

All of the foregoing fees, costs and expenses may be charged to the Borrower as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

(b)Limitation of Liability.  To the extent permitted by applicable law (i) neither the Borrower nor any Loan Party shall assert, and the Borrower and each Loan Party hereby waives, any claim against the Administrative Agent, any Arranger, any Issuing Bank and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a “Lender-Related Person”) for any Liabilities 

104

 

arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this Section 9.03(b) shall relieve the Borrower or any Loan Party of any obligation it may have to indemnify an Indemnitee, as provided in Section 9.03(c), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.  

(c)Indemnity.  The Loan Parties, jointly and severally, shall indemnify the Administrative Agent, each Arranger, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all Liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, (ii) the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (iii) any action taken in connection with this Agreement, including, but not limited to, the payment of principal, interest and fees, (iv) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (v) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (vi) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by such Loan Party for Taxes pursuant to Section 2.17, or (vii) any actual or prospective Proceeding relating to any of the foregoing, whether or not such Proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses result primarily from the gross negligence or willful misconduct of such Indemnitee.  This Section 9.03(c) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(d)Lender Reimbursement.  Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraphs (a), (b) or (c) of this Section 9.03 to the Administrative Agent, the Swingline Lender and each Issuing Bank, and each Related Party of any of the foregoing Persons (each, an “Agent-Related Person”) (to the extent not reimbursed by the Loan Parties and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which such payment is sought under this Section (or, if such payment is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), from and against any and all Liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent-Related Person in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent-Related Person under or in connection with any of the foregoing; provided that the unreimbursed expense or Liability or related expense, as the case may be, was incurred by or asserted against such Agent-Related Person in its capacity as such; provided, further, that no Lender shall be liable for the payment of any portion 

105

 

of such Liabilities, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted primarily from such Agent-Related Person’s gross negligence or willful misconduct.  The agreements in this Section shall survive the termination of this Agreement and the Payment in Full of the Secured Obligations.

(e)Payments. All amounts due under this Section 9.03 shall be payable promptly after written demand therefor.

SECTION 9.04  Successors and Assigns.  

(a)The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)the Borrower, provided that, (x) the Borrower shall be deemed to have consented to an assignment of all or a portion of the Term Loans unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof and (y) the Borrower shall be deemed to have consented to an assignment of all or a portion of the Revolving Loans and Commitments unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided, further, that no consent of the Borrower shall be required for (i) an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee and (ii) any assignments made in connection with the primary syndication of the Term Loans;

(B)the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund; and

(C)the Issuing Bank, provided that no consent of the Issuing Bank shall be required for an assignment of all or any portion of a Term Loan; and

(D)the Swingline Lender, provided that no consent of the Swingline Lender shall be required for an assignment of all or any portion of a Term Loan.

106

 

(ii)Assignments shall be subject to the following additional conditions:

(A)except in the case of an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 or, in the case of a Term Loan, $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C)the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500; and

(D)the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including federal and state securities laws.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender or its Lender Parent, (c)  holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that, with respect to clause (c), such holding company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business; provided that upon the occurrence and during the continuance of an Event of Default, any Person (other than a Lender) shall be an Ineligible Institution if after giving effect to any proposed assignment to such Person, such Person would hold more than 25% of the then outstanding Aggregate 

107

 

Credit Exposure or Commitments, as the case may be or (d) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

(iii)Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv)The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(d), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)Any Lender may, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) other than an Ineligible Institution in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and/or obligations under 

108

 

this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Sections 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.17(g) will be delivered to the Borrower and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17 with respect to any participation than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.19(b) with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103‐1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d)Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05  Survival.

  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of 

109

 

or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06  Counterparts; Integration; Effectiveness; Electronic Execution.  

(a)This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable.  The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrower or any other Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart.  Without limiting the generality of the foregoing, the Borrower and each Loan Party hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Borrower and the Loan Parties, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement,  any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (B) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, 

110

 

which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (D) waives any claim against any Lender-Related Person for any Liabilities arising solely from the Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of the Borrower and/or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.  

SECTION 9.07  Severability.

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

SECTION 9.08  Right of Setoff.

  If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other obligations at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of any Loan Party against any and all of the Secured Obligations owing to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The applicable Lender, the Issuing Bank or such Affiliate shall notify the Borrower and the Administrative Agent of such setoff or application; provided that the failure to give such notice shall not affect the validity of such setoff or application under this Section.  The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.

SECTION 9.09  Governing Law; Jurisdiction; Consent to Service of Process.

(a)The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

(b)Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan 

111

 

Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.

(c)Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such state court or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

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

(e)Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10  WAIVER OF JURY TRIAL.

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

SECTION 9.11  Headings.

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

SECTION 9.12  Confidentiality.

  Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any 

112

 

self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower (h) on a confidential basis to (1) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein, or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrower.  For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND  THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 9.13  Several Obligations; Nonreliance; Violation of Law.

  The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder.  Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined 

113

 

in Regulation U of the Federal Reserve Board) for the repayment of the Borrowings provided for herein.  Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.

SECTION 9.14  USA PATRIOT Act.

  Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15  Disclosure.

  Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with, any of the Loan Parties and their respective Affiliates. 

SECTION 9.16  Appointment for Perfection.

  Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control.  Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

SECTION 9.17  Interest Rate Limitation.

  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the NYFRB Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.18  No Fiduciary Duty, etc.

(a)The Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to the Borrower with respect to the Loan Documents and the transactions contemplated herein and therein and not as a financial advisor or a fiduciary to, or an agent of, the Borrower or any other person.  The Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby.  Additionally, the Borrower acknowledges and agrees that no Credit Party is advising the Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction.  The Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated herein or in the other Loan Documents, and the Credit Parties shall have no responsibility or liability to the Borrower with respect thereto.

114

 

(b)The Borrower further acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services.  In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the Borrower and other companies with which the Borrower may have commercial or other relationships.  With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

(c)In addition, the Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the Borrower may have conflicting interests regarding the transactions described herein and otherwise.  No Credit Party will use confidential information obtained from the Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with the Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies.  The Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to the Borrower, confidential information obtained from other companies.

SECTION 9.19  Marketing Consent.

  The Borrower hereby authorizes Chase and its affiliates (collectively, the “Chase Parties”), at their respective sole expense, and without any prior approval by the Borrower, to include the Borrower’s name and logo in advertising, marketing, tombstones, case studies and training materials, and to give such other publicity to this Agreement as Chase Parties may from time to time determine in their sole discretion.  The foregoing authorization shall remain in effect unless the Borrower notifies Chase in writing that such authorization is revoked.

SECTION 9.20  Acknowledgement and Consent to Bail-In of Affected Financial Institutions.

  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

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

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

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

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

115

 

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable  Resolution Authority.

SECTION 9.21  Acknowledgement Regarding Any Supported QFCs.  

(a)To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States): 

(b)In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.  In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

Article X
Loan Guaranty

SECTION 10.01  Guaranty.

  Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses including, without limitation, all court costs and reasonable attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”); provided, however, that the definition of “Guaranteed Obligations” shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for purposes of determining any obligations of any Loan Guarantor).  Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.  All terms of this Loan Guaranty apply to and 

116

 

may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

SECTION 10.02  Guaranty of Payment.

  This Loan Guaranty is a guaranty of payment and not of collection.  Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor of, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

SECTION 10.03  No Discharge or Diminishment of Loan Guaranty.

(a)Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the Payment in Full of the Guaranteed Obligations), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other Person, whether in connection herewith or in any unrelated transactions.

(b)The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

(c)Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the Payment in Full of the Guaranteed Obligations).

SECTION 10.04  Defenses Waived.

  To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of the Borrower, any Loan Guarantor or any other Obligated Party, other than the Payment in Full of the Guaranteed Obligations.  Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person.  Each Loan 

117

 

Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder.  The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty, except to the extent the Guaranteed Obligations have been Paid in Full.  To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

SECTION 10.05  Rights of Subrogation.

  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

SECTION 10.06  Reinstatement; Stay of Acceleration.

  If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

SECTION 10.07  Information.

  Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

SECTION 10.08  Termination.

  Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrower based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor.  Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations.  Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under clause (o) of Article VII hereof as a result of any such notice of termination.

SECTION 10.09  Taxes.

  Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, 

118

 

then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.

SECTION 10.10  Maximum Liability.

  Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law.  In determining the limitations, if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10.11  Contribution.

(a)To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor Payments then previously or concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Loan Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment, the Payment in Full of the Guaranteed Obligations and the termination of this Agreement, such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

(b)As of any date of determination, the “Allocable Amount” of any Loan Guarantor shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan Guarantors as of such date in a manner to maximize the amount of such contributions.

(c)This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

(d)The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and indemnification is owing.

(e)The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations and the termination of this Agreement.

119

 

SECTION 10.12  Liability Cumulative.

  The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

SECTION 10.13  Keepwell.

  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party and Guarantor to honor all of its obligations under this Guarantee in respect of a Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 10.13 shall remain in full force and effect until the termination of all Swap Obligations.  Each Qualified ECP Guarantor intends that this Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

[Signature Page Follows]

 

120

 

 

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

MasterCraft Boat Holdings, Inc.

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

Mastercraft Boat Company, LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

Mastercraft Services, LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

Mastercraft International Sales Administration, Inc.

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

121

 

 

Nautic Star, LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

NS Transport, LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

Crest Marine LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

Aviara Boats, LLC

By:/s/ Timothy M. Oxley
Name:Timothy M. Oxley
Title:CFO

 

 

 

 

[Signature Page to Credit Agreement]

 

 

JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent, Swingline Lender and Issuing Bank

By:/s/ Brandon Abney
Name:Brandon Abney
Title:Vice President

 

[Signature Page to Credit Agreement]

 

 

FIFTH THIRD BANK

By:/s/ Thomas Feeney
Name:Thomas Feeney
Title:Senior Vice President

 

 

 

[Signature Page to Credit Agreement]

 

 

BMO Harris Bank, N.A.

By:/s/ William Bartlett
Name:William Bartlett
Title:Director

 

[Signature Page to Credit Agreement]

 

 

PINNACLE BANK

By:/s/ Michael Kohl
Name:Michael Kohl
Title:Financial Advisor

 

[Signature Page to Credit Agreement]

 

 

United Community BANK

By:/s/ Brian Reynolds
Name:Brian Reynolds
Title:Vice President

 

 

 

[Signature Page to Credit Agreement]

 

 

COMMITMENT SCHEDULE

				
	
Lender
	
Revolving Commitment
	
Term Loan Commitment
	
Swingline Commitment

	
JPMorgan Chase Bank, N.A.
	
$31,250,000
	
$18,750,000
	
$10,000,000

	
Fifth Third Bank
	
$21,875,000
	
$13,125,000
	
-

	
BMO Harris Bank, N.A.
	
$21,875,000
	
$13,125,000
	
-

	
Pinnacle Bank 
	
$15,625,000
	
$9,375,000
	
-

	
United Community Bank
	
$9,375,000
	
$5,625,000
	
-

	
Total
	
$100,000,000
	
$60,000,000
	
$10,000,000

 

 

 

 

 

 

 

 

[Signature Page to Credit Agreement]

 

 

EXHIBIT A
ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit and guarantees and Swingline Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

	
1.
	
Assignor:______________________________

	
2.
	
Assignee:______________________________
[and is an Affiliate/Approved Fund of [identify Lender]]

	
3.
	
Borrower:______________________________

	
4.
	
Administrative Agent:JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement

	
5.
	
Credit Agreement:The Credit Agreement dated as of June 28, 2021 among MasterCraft Boat Holdings, Inc., the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto

	
6.
	
Assigned Interest:

				
	
Facility Assigned
	
Aggregate Amount of Commitment/Loans for all Lenders
	
Amount of Commitment/Loans Assigned
	
Percentage Assigned of Commitment/Loans

	
 
	
$
	
$
	
%

	
 
	
$
	
$
	
%

	
 
	
$
	
$
	
%

Effective Date:  [_____________ ___], 20[___] [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.  The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:
Name:
Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:
Name:
Title:

 

 

 

Accepted:

JPMORGAN CHASE BANK, N.A., 
as Administrative Agent 

	
By:
	

Name:
Title:

 

 

 

Exhibit A - 1

 

 

ANNEX 1 to
ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

	
1.
	
Representations and Warranties.

	
1.1
	
Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or Affiliate or any other Person obligated in respect of any Loan Document, (iv) any requirements under applicable law for the Assignee to become a lender under the Credit Agreement or any other Loan Document or to charge interest at the rate set forth therein from time to time or (v) the performance or observance by the Borrower, any Subsidiary or Affiliate, or any other Person of any of their respective obligations under any Loan Document.

	
1.2.
	
Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement and under applicable law that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of this type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent, any Arranger, the Assignor or any other Lender or any of their respective Related Parties, and (vi) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any Arranger, the Assignor or any other Lender or any of their respective Related Parties, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

	
2.
	
Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

	
3.
	
General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and 

 

Exhibit A - 2

 

		
Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor by Electronic Signature (as defined in the Credit Agreement) or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Approved Electronic Platform (as defined in the Credit Agreement) shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

Annex 1 - 1

 

 

EXHIBIT B-1

[FORM OF] BORROWING REQUEST

JPMorgan Chase Bank, N.A.
10 South Dearborn, Floor L2
Suite IL1-1145
Chicago, IL, 60603-2300
Attention: ___________________
Fax No: (312) ___________

Date:

Ladies and Gentlemen:

This Borrowing Request is furnished pursuant to Section 2.03 of that certain Credit Agreement dated as of June 28, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) among MasterCraft Boat Holdings, Inc. (the “Borrower”), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A. (“Chase”), as Agent for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement.  The Borrower represents that, as of this date, the conditions precedent set forth in Section 4.02 are satisfied.

The Borrower hereby notifies Chase of its request for the following Borrowing:

	
 
	
1.
	
[Revolving] [Term Loan] Borrowing

	
 
	
2.
	
Aggregate Amount of the [Revolving] [Term Loan] Borrowing:
$[_________________]

	
 
	
3.
	
Borrowing Date of the Borrowing (must be a Business Day): 
[___________________]

	
 
	
4.
	
The Borrowing shall be a [___] ABR Borrowing or [___] Eurodollar Borrowing

	
 
	
5.
	
If a Eurodollar Borrowing, the duration of Interest Period:
One Month 
Three Months 
Six Months 

MasterCraft Boat Holdings, Inc.

By:
Name:
Title:

 

Annex 1 - 2

 

 

EXHIBIT B-2

[FORM OF] INTEREST ELECTION REQUEST

JPMorgan Chase Bank, N.A.
10 South Dearborn, Floor L2
Suite IL1-1145
Chicago, IL, 60603-2300
Attention: ___________________
Fax No: (312) ___________

Date:

Ladies and Gentlemen:

This Interest Election Request is furnished pursuant to Section 2.08(c) of that certain Credit Agreement dated as of June 28, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) among MasterCraft Boat Holdings, Inc. (the “Borrower”), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A. (“Chase”), as Agent for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement.

The Borrower is hereby requesting to convert or continue certain Borrowings as follows:

	
 
	
1.
	
Borrowing to which this Interest Election Request applies:
[________________________________]

	
 
	
2.
	
Date of conversion/continuation (must be a Business Day): [__________________], 20[____]

	
 
	
3.
	
Amount of Borrowings being converted/continued:$[_______________]

	
 
	
4.
	
Nature of conversion/continuation:

	
 
	
*
	
a. Conversion of ABR Borrowings to Eurodollar Borrowings

	
 
	
*
	
b. Conversion of Eurodollar Borrowings to ABR Borrowings

	
 
	
*
	
c. Continuation of Eurodollar Borrowings as such

	
 
	
5.
	
If Borrowings are being continued as or converted to Eurodollar Borrowings, the duration of the new Interest Period that commences on the conversion/continuation date:  
One Month __________Three Months__________Six Months__________

	
 
	
6.
	
The undersigned officer of Borrower certifies that, both before and after giving effect to the request above, no Default or Event of Default has occurred and is continuing under the Agreement.

[BORROWER NAME]

By:
Name:
Title:

 

Exhibit B-1 - 1

 

 

 

EXHIBIT C-1

[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [___________] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among MasterCraft Boat Holdings, Inc., and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W‐8BEN or IRS Form W‐8BEN‐E, as applicable.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

	
By:  
	

Name:  
Title:  

Date: ________ __, 20[  ]

 

Exhibit B-2 - 1

 

 

EXHIBIT C-2

[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [_____________] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among MasterCraft Boat Holdings, Inc. and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W‐8BEN or IRS Form W‐8BEN‐E, as applicable.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

	
By:  
	

Name:  
Title:  

Date: [________ __], 20[  ]

 

 

 

Exhibit C-1 - 1

 

 

EXHIBIT C-3

[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [________________] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among MasterCraft Boat Holdings, Inc. and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W‐8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W‐8BEN or IRS Form W‐8BEN‐E, as applicable, or (ii) an IRS Form W-8IMY accompanied by a withholding statement together with an IRS Form W‐8BEN or IRS Form W‐8BEN‐E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

	
By:  
	

Name:  
Title:  

Date: [________ __], 20[__]

 

 

Exhibit C-2 - 1

 

 

EXHIBIT C-4

[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [____________] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among MasterCraft Boat Holdings, Inc. and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any promissory note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W‐8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W‐8IMY accompanied by a withholding statement together with an IRS Form W‐8BEN or IRS Form W‐8BEN‐E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

	
By:  
	

Name:  
Title:  

Date:  [________ __], 20[__]

 

 

Exhibit C-3 - 1

 

 

EXHIBIT E

COMPLIANCE CERTIFICATE

	
To:
	
The Lenders party to the
Credit Agreement described below

This Compliance Certificate (“Certificate”), for the period ended [_______ __], 20[__],  is furnished pursuant to that certain Credit Agreement dated as of June 28, 2021 (as amended, modified, renewed or extended from time to time, the “Agreement”) among MasterCraft Boat Holdings, Inc. (the “Borrower”), the other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders and as the Issuing Bank and Swingline Lender.  Unless otherwise defined herein, capitalized terms used in this Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

	
1.
	
I am the [_________________] of the Borrower and I am authorized to deliver this Certificate on behalf of the Borrower and its Subsidiaries;

	
2.
	
I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the compliance of the Borrower and its Subsidiaries with the Agreement during the accounting period covered by the attached financial statements (the “Relevant Period”);

	
3.
	
The attached financial statements of the Borrower and, as applicable, its Subsidiaries and/or Affiliates for the Relevant Period: (a) have been prepared on an accounting basis (the “Accounting Method”) consistent with the requirements of the Agreement and, except as may have been otherwise expressly agreed to in the Agreement, in accordance with GAAP consistently applied, and (b) to the extent that the attached are not the Borrower’s annual fiscal year end statements, are subject to normal year-end audit adjustments and the absence of footnotes;

	
4.
	
The examinations described in paragraph 2 did not disclose and I have no knowledge of, except as set forth below, (a) the existence of any condition or event which constitutes a Default or an Event of Default under the Agreement or any other Loan Document during or at the end of the Relevant Period or as of the date of this Certificate or (b) any change in the Accounting Method or in the application thereof that has occurred since the date of the annual financial statements delivered to the Administrative Agent in connection with the closing of the Agreement or subsequently delivered as required in the Agreement;

	
5.
	
I hereby certify that, except as set forth below, no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) its principal place of business, (iv) the type of entity it is or (v) its state of incorporation or organization without having given the Administrative Agent the notice required by Section 4.15 of the Security Agreement;

	
6.
	
The representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct  as of the date hereof, except (i) to the extent that any such representation or warranty specifically refers to an earlier date, in which case it is true and correct only as of such earlier date;

 

Exhibit C-4 - 1

 

	
7.
	
Schedule I attached hereto sets forth financial data and computations1 evidencing the Borrower’s compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct; and

	
8.
	
Schedule II hereto sets forth the computations necessary to determine the Applicable Rate commencing on the Business Day this Certificate is delivered.

Described below are the exceptions, if any, referred to in paragraph 4 hereof by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event or (ii) change in the Accounting Method or the application thereof and the effect of such change on the attached financial statements:

 

The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this [___] day of [__________, ____].

By:
Name:
Title:

 

	
	 

	
1 
	
 Schedule I must include detailed calculation tables for all components of the financial covenant calculations.

 

Exhibit E - 1

 

 

Schedule I to Compliance Certificate

Compliance as of _________, ____ with
Provisions of and of the Agreement

	
6.12
	
Financial Covenants. 

(a)Fixed Charge Coverage Ratio.  The Borrower will not permit the Fixed Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, to be less than 1.15 to 1.00.

		
	
A)Net income
	
$

	
Plus interest expense
	
$

	
Plus income tax expense
	
$

	
Plus depreciation expense
	
$

	
Plus amortization expense
	
$

	
Plus extraordinary charges
	
$

	
Plus other non-cash charges
	
$

	
Plus non-recurring fees, costs and expenses for such period incurred in connection with entering into the Credit Agreement, the other Loan Documents and the Transactions
	
$

	
Plus fees and reimbursed expenses paid to independent directors during such period for advisory and board management services in an aggregate amount not to exceed $2,000,000 in any fiscal year
	
$

	
Plus non-recurring fees, costs and expenses during such period incurred in connection with any Permitted Acquisition, permitted disposition, permitted equity issuance and/or permitted investment, in each case, whether or not consummated
	
$

	
Minus any cash payments made during such period in respect of non-cash charges
	
$

	
Minus extraordinary gains and any non-cash items of income
	
$

	
Minus Unfinanced Capital Expenditures
	
$

	
Minus expense for taxes paid in cash
	
$

	
Minus Restricted Payments
	
$

	
A TOTAL (EBITDA, minus Unfinanced Capital Expenditures, minus expense for taxes paid in cash, minus Restricted Payments)
	
$

	
B)Cash Interest expense 
	
$

	
Plus scheduled principal payments on Indebtedness
	
$

	
 
	
 

	
B TOTAL (Fixed Charges)
	
$

	
A Total / B Total = Fixed Charge Coverage Ratio

 
	
        :1.00

 

As of the Compliance Test Date shown above, the Fixed Charge Coverage Ratio is ______.___ to 1.00

Compliance as of the Compliance Test Date shown above:      [__] Yes     [__] No

 

Exhibit E - 2

 

(b) Total Net Leverage Ratio.  The Borrower will not permit the Total Net Leverage Ratio, on the last day of any fiscal quarter, to be greater than 2.75 to 1.00; provided, however, that for any fiscal quarter in which one or more Permitted Acquisitions with a total consideration of greater than $20,000,000 in the aggregate occur, the following shall apply for such fiscal quarter and the three full fiscal quarters thereafter: the Borrower will not permit the Total Net Leverage Ratio (i) on the last day of the fiscal quarter during which such Permitted Acquisition(s) occur and the last day of the following full fiscal quarter, to be greater than the level that would then otherwise be required plus 0.50 to 1.00 and (ii) on the last day of second full and third full fiscal quarters occurring after such Permitted Acquisition(s), to be greater than the level that would then otherwise be required plus 0.25 to 1.00.

 

		
	
A)Total Indebtedness
	
$

	
Minus Unrestricted Cash (in an aggregate amount not to exceed $35,000,000)
	
$

	
 
	
 

	
A TOTAL (Total Indebtedness, minus Unrestricted Cash (in an aggregate amount not to exceed $35,000,000))
	
$

	
B)Net income
	
$

	
Plus interest expense
	
$

	
Plus income tax expense
	
$

	
Plus depreciation expense
	
$

	
Plus amortization expense
	
$

	
Plus extraordinary charges
	
$

	
Plus other non-cash charges
	
$

	
Plus non-recurring fees, costs and expenses for such period incurred in connection with entering into the Credit Agreement, the other Loan Documents and the Transactions
	
$

	
Plus fees and reimbursed expenses paid to independent directors during such period for advisory and board management services in an aggregate amount not to exceed $2,000,000 in any fiscal year
	
$

	
Plus non-recurring fees, costs and expenses during such period incurred in connection with any Permitted Acquisition, permitted disposition, permitted equity issuance and/or permitted investment, in each case, whether or not consummated
	
$

	
Minus any cash payments made during such period in respect of non-cash charges
	
$

	
Minus extraordinary gains and any non-cash items of income
	
$

	
B TOTAL (EBITDA)
	
$

	
A Total / B Total = Total Net Leverage Ratio

 
	
        :1.00

 

As of the Compliance Test Date shown above, the Total Net Leverage Ratio is ______.___ to 1.00.

Compliance as of the Compliance Test Date shown above:  [__] Yes   [__] No

 

Schedule I - 1

 

 

 

 

Schedule I - 2

 

 

Schedule II to Compliance Certificate

Borrower’s Applicable Rate Calculation

 

 

 

 

Schedule I - 3

 

 

EXHIBIT F

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [___________], is entered into between [________________________________], a [_________________] (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) under that certain Credit Agreement dated as of [_______] (as the same may be amended, modified, extended or restated from time to time, the “Credit Agreement”) among [_______________] (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent for the Lenders.  All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

The New Subsidiary and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:

	
1.
	
The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit Agreement.  The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Loan Parties set forth in Article III of the Credit Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the Credit Agreement *[and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement.  Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 10.10 and 10.13 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.]*  *[The New Subsidiary has delivered to the Administrative Agent an executed Obligation Guaranty.]*

	
2.
	
If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with the Credit Agreement.

	
3.
	
The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:

 

 

Schedule II - 1

 

 

	
4.
	
The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

	
5.
	
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

	
6.
	
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

[NEW SUBSIDIARY]

By:
Name:
Title:

[Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By:
Name:
Title:

 

 

30691059.9

 

Exhibit F - 1Exhibit 4.2

 

 

__________________________________________

 

NATWEST GROUP PLC

 

as Company,

 

and

 

THE BANK OF NEW YORK MELLON ACTING THROUGH
ITS

LONDON BRANCH

 

as Trustee

 

__________________________________________

 

EIGHTH SUPPLEMENTAL INDENTURE

 

dated as of June
28, 2021

 

to

 

CONTINGENT CONVERTIBLE SECURITIES INDENTURE

 

dated as of August
10, 2015

 

and the

 

FIFTH SUPPLEMENTAL INDENTURE

 

dated as of August
19, 2020

 

in
respect of

 

$750,000,000 4.600%
Reset Perpetual Subordinated Contingent Convertible

 

Additional Tier
1 Capital Notes

 

 

     

     

    

TABLE
OF CONTENTS

___________________ 

 

Page

 

	Article 1

                                                                                Definitions

	Section
    1.01.  Definition of Terms	2
	Section
    1.02.  Separability Clause	20
	Section
    1.03.  Benefits of Instrument	20
	Section
    1.04.  Relation to Contingent Convertible Securities Indenture	20
	Article 2

                                                                                Amendments To The Contingent Convertible Securities Indenture

	Section
    2.01.  Amended Definitions	20
	Article 3

                                                                                The Contingent Capital Notes

	Section
    3.01.  Form, Title, Terms and Payments	21
	Section
    3.02.  Interest	23
	Section
    3.03.  Interest Payments Discretionary	24
	Section
    3.04.  Restrictions on Interest Payments	24
	Section
    3.05.  Agreement to Interest Cancellation	25
	Section
    3.06.  Notice of Interest Cancellation	25
	Section
    3.07.  Payment of Principal, Interest and Other Amounts	25
	Section
    3.08.  Optional Redemption	26
	Section
    3.09.  Optional Tax Redemption	26
	Section
    3.10.  Capital Disqualification Event Redemption	27
	Section
    3.11.  Optional Repurchase	28
	Section 3.12.  Substitution or Variation  	28
	Section
    3.13.  Pre-conditions to Redemptions and Repurchases	29
	Section
    3.14.  Notice of Redemption	30
	Section
    3.15.  Cancelled Interest Not Payable upon Redemption	32
	Section
    3.16.  Automatic Conversion upon Conversion Trigger Event	32
	Section
    3.17.  Settlement Shares	36
	Section
    3.18.  Settlement Shares Offer	37
	Section
    3.19.  Settlement Procedure	38
	Section
    3.20.  Failure to Deliver a Settlement Notice	40
	Section
    3.21.  Delivery of ADSs	41
	Section
    3.22.  Agreement with Respect to Exercise of U.K. Bail-in Power	42
	Article 4

                                                                                Anti-Dilution

	Section
    4.01.  Adjustment of Conversion Price	43
	Section
    4.02.  Takeover Event	49
	Section
    4.03.  Agreement with Respect to a Non-Qualifying Takeover Event	50
	Section 4.04.  Availability of Ordinary Shares  	52

 

    i 

     

    

 

	Article 5

                                                                                Enforcement Events and Remedies

	Section
    5.01.  Winding-up or Administration Event	52
	Section
    5.02.  Non-Payment Event	52
	Section
    5.03.  Limited Remedies for Breach of Performance Obligations	53
	Section
    5.04.  No Other Remedies and Other Terms	53
	Section
    5.05.  Waiver of Past Defaults	54
	Article 6

                                                                                Subordination

	Section
    6.01.  Subordination to Claims of Senior Creditors	55
	Section
    6.02.  No Set-Off	56
	Article 7

                                                                                Satisfaction and Discharge

	Section
    7.01.  Satisfaction and Discharge of Indenture	57
	Article 8

                                                                                Supplemental Indentures

	Section
    8.01.  Amendments or Supplements without Consent of Holders	57
	Section
    8.02.  Amendments or Supplements With Consent of Holders	58
	Section
    8.03.  Holders’ Approval of Amendments	58
	Section
    8.04.  PRA Consent	58
	Article
    9
	Amendments
    to the Contingent Convertible Securities Indenture applicable to the Contingent Capital Notes only
	Section
    9.01.  Additional Amounts	58
	Article 10

                                                                                Miscellaneous

	Section
    10.01.  Effect of Supplemental Indenture	60
	Section
    10.02.  Other Documents to Be Given to the Trustee	60
	Section
    10.03.  Notices to, and Consents Required from, the PRA to Be Given to the Trustee	61
	Section
    10.04.  Survival	61
	Section
    10.05.  Confirmation of Indenture	61
	Section
    10.06.  Concerning the Trustee	61
	Section
    10.07.  Governing Law	61
	Section
    10.08.  Entire Agreement	61
	Section
    10.09.  Counterparts	61

    ii 

     

    

 

This EIGHTH SUPPLEMENTAL
INDENTURE (“Eighth Supplemental Indenture”), dated as of June 28, 2021, between, NATWEST GROUP PLC, a company incorporated
in Scotland with registered number SC045551, as issuer (the “Company”), having its registered office at 36 St Andrew
Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK MELLON, acting through its London Branch, a banking corporation duly
organized and existing under the laws of the State of New York as trustee under the Contingent Convertible Securities Indenture (the
“Trustee”), having its Corporate Trust Office at One Canada Square, London E14 5AL, United Kingdom.

 

WITNESSETH:

 

WHEREAS, the Company
and the Trustee have executed and delivered a contingent convertible securities indenture, dated as of August 10, 2015, as amended and
supplemented by the Fifth Supplemental Indenture dated as of August 19, 2020 (the “Contingent Convertible Securities Indenture”
and, together with this Eighth Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s
Contingent Convertible Securities (the “Securities”);

 

WHEREAS, the Company
hereto desires to issue a series of Securities to be known as the $750,000,000 4.600% Reset Perpetual Subordinated Contingent Convertible
Additional Tier 1 Capital Notes (the “Contingent Capital Notes”);

 

WHEREAS, the parties
hereto desire to establish that the Contingent Capital Notes shall be issued in the form of one of more Global Securities substantially
in the form of Exhibit A to this Eighth Supplemental Indenture pursuant to Sections 2.01 and 3.01 of the Contingent Convertible Securities
Indenture;

 

WHEREAS, Section
9.01(f) of the Contingent Convertible Securities Indenture permits the Company and the Trustee to enter into a supplemental indenture
to establish the forms or terms of Securities of any series as permitted under Sections 2.01 and 3.01 of the Contingent Convertible Securities
Indenture without the consent of Holders;

 

WHEREAS, Section
9.01(d) of the Contingent Convertible Securities Indenture permits the Company and the Trustee to add to, change or eliminate any provisions
of the Contingent Convertible Securities Indenture, subject to certain conditions, without the consent of Holders;

 

WHEREAS, this Eighth
Supplemental Indenture shall amend and supplement the Contingent Convertible Securities Indenture but only with respect to the Contingent
Capital Notes; to the extent the terms of the Contingent Convertible Securities Indenture are inconsistent with such provisions of this
Eighth Supplemental Indenture, the terms of this Eighth Supplemental Indenture shall govern, but only with respect to the Contingent
Capital Notes;

 

WHEREAS, there are
no debt securities outstanding of any series created prior to the execution of this Eighth Supplemental Indenture which are entitled
to the benefit of the provisions set forth herein or would be adversely affected by such provisions;

 

     

     

    

 

WHEREAS, the entry
into of this Eighth Supplemental Indenture has been authorized pursuant to a Board Resolution, as required by Section 9.01 of the Contingent
Convertible Securities Indenture; and

 

WHEREAS, the Company
has requested and does hereby request that the Trustee execute and deliver this Eighth Supplemental Indenture, and whereas all actions
required by the Company to be taken in order to make this Eighth Supplemental Indenture a valid, binding and enforceable instrument in
accordance with its terms, have been taken and performed, and the execution and delivery of this Eighth Supplemental Indenture has been
duly authorized in all respects,

 

NOW, THEREFORE,
the Company and the Trustee mutually covenant and agree as follows:

 

Article
1

Definitions

 

Section 1.01.     
Definition of Terms. For all purposes of this Eighth Supplemental Indenture:

 

(a)           
a term defined anywhere in this Eighth Supplemental Indenture has the same meaning throughout;

 

(b)           
capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Contingent Convertible
Securities Indenture;

 

(c)           
the singular includes the plural and vice versa;

 

(d)           
headings are for convenience of reference only and do not affect interpretation;

 

(e)           
for purposes of this Eighth Supplemental Indenture and the Contingent Convertible Securities Indenture, the term “series”
shall mean the series of Securities designated as the Contingent Capital Notes as defined in this Eighth Supplemental Indenture;

 

(f)            
the words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Eighth Supplemental Indenture, refer to this Eighth Supplemental Indenture as a whole and not to any particular provision
of this Eighth Supplemental Indenture;

 

(g)           
the terms “dollars” and “$” mean United States Dollars;

 

(h)           
the terms “pounds sterling” and “£” mean British pounds sterling;

 

(i)            
references herein to a specific Section, Article or Exhibit refer to Sections or Articles of, or an Exhibit to, this Eighth Supplemental
Indenture;

 

    2 

     

    

 

(j)            
wherever the words “include”, “includes” or “including” are used in this
Eighth Supplemental Indenture, they shall be deemed to be followed by the words “without limitation”;

 

(k)           
the use of “or” is not intended to be exclusive unless expressly indicated otherwise;

 

(l)            
for purposes of this Eighth Supplemental Indenture, references therein to any act or statute or any provision of any act or statute
shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation
made thereunder or under such modification or re-enactment; and

 

(m)            
references to any issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be
taken to be references to an issue or offer or grant to all or substantially all Shareholders, other than Shareholders to whom, by reason
of the laws of any territory or requirements of any recognized regulatory body or any other stock exchange or securities market in any
territory or in connection with fractional entitlements, it is determined not to make such issue or offer or grant.

 

“Accrued
Interest” means any accrued and unpaid interest on the Contingent Capital Notes, excluding any interest which has been cancelled
or deemed to be cancelled in accordance with the terms of this Eighth Supplemental Indenture.

 

“Acquirer”
means the person which, following a Takeover Event, controls the Company.

 

“ADS”
means the American Depository Shares which are the subject of the ADS Deposit Agreement.

 

“ADS Deposit
Agreement” means the Amended and Restated Deposit Agreement among the Company, The Bank of New York Mellon and all holders
from time to time of American Depositary Receipts issued thereunder.

 

“ADS Depository”
means The Bank of New York Mellon, as the depositary under the Company’s ADS Deposit Agreement.

 

“Alternative
Consideration” means, in respect of each Contingent Capital Note and as determined by the Company (i) if all of the Settlement
Shares to be issued and delivered following Automatic Conversion are sold in the Settlement Shares Offer, the pro rata share of the cash
proceeds from the sale of such Settlement Shares attributable to such Contingent Capital Notes translated from sterling into U.S. dollars
at a then-prevailing exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange
transaction costs and an amount equal to the pro rata share of any taxes and duties (including, without limitation, any stamp duty, stamp
duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax or duty) that may arise
or be paid in connection with the issue and delivery of Settlement Shares to the Settlement Share Depository pursuant to the Settlement
Shares Offer); (ii) if some but not all of such Settlement Shares to be issued

 

    3 

     

    

 

and
delivered upon Automatic Conversion are sold in the Settlement Shares Offer, (x) the pro rata share of the cash proceeds from the sale
of such Settlement Shares attributable to such Contingent Capital Notes translated from sterling into U.S. dollars at a then-prevailing
exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange transaction costs and
an amount equal to the pro rata share of any taxes and duties (including, without limitation, any stamp duty, stamp duty reserve tax,
or any other capital, issue, transfer, registration, financial transaction or documentary tax or duty) that may arise or be paid in connection
with the issue and delivery of Settlement Shares to the Settlement Share Depository pursuant to the Settlement Shares Offer) and (y)
the pro rata share of such Settlement Shares not sold pursuant to the Settlement Shares Offer attributable to such Contingent Capital
Notes rounded down to the nearest whole number of Settlement Shares; and (iii) if no Settlement Shares are sold in the Settlement Shares
Offer, the relevant number of Settlement Shares that would have been received had the Company not elected that the Settlement Share Depository
should carry out a Conversion Shares Offer.

 

“Approved
Entity” means a body corporate that is incorporated or established under the laws of an OECD member state and which, on the
occurrence of the Takeover Event, has in issue Relevant Shares.

 

“Assets”
means the unconsolidated gross assets of the Company, as shown in the latest published audited balance sheet of the Company, adjusted
for subsequent events in such manner as the directors of the Company may determine.

 

“Automatic
Conversion” means the irrevocable and automatic release of all of the Company’s obligations under the Contingent Capital
Notes in consideration of the Company’s issuance and delivery of the Settlement Shares at the Conversion Price on the Conversion
Date to the Settlement Share Depository (on behalf of the Holders and Beneficial Owners) in accordance with the terms of the Contingent
Capital Notes or the Indenture.

 

“Banking
Act” means the U.K. Banking Act 2009, as has been or may be amended from time to time, whether pursuant to the U.K. Financial
Services (Banking Reform) Act 2013, secondary legislation or otherwise;

 

“Beneficial
Owners” shall mean (a) with respect to Global Securities, the owners of beneficial interests in the Securities prior to the
occurrence of the Final Cancellation Date and (b) with respect to definitive Securities, the Holders in whose names the Securities are
registered in the Contingent Convertible Security Register.

 

“Business
Day” means any day, other than Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in the City of New York or in the City of London, England.

 

“Calculation
Agent” means National Westminster Bank Plc, or its successor appointed by the Company pursuant to the Calculation Agent Agreement
between the Company and National Westminster Bank Plc, dated as of the date hereof.

 

    4 

     

    

 

“Cancellation
Date” means (i) with respect to any Contingent Capital Note for which a Settlement Notice is received by the Settlement Share
Depository on or before the Notice Cut-off Date, the applicable Settlement Date and (ii) with respect to any Contingent Capital Note
for which a Settlement Notice is not received by the Settlement Share Depository on or before the Notice Cut-off Date, the Final Cancellation
Date.

 

A “Capital
Disqualification Event” shall occur if the Company determines that, as a result of any amendment to, or change in the regulatory
classification of the Contingent Capital Notes under the Capital Regulations (or official interpretation thereof), in any such case becoming
effective on or after the Issue Date, the whole or part of the Contingent Capital Notes are, or are likely to be, excluded from the Tier
1 Capital (as defined in the Capital Regulations) of the Company and/or the Tier 1 Capital of the Regulatory Group.

 

“Cash Component”
means that portion, if any, of the Alternative Consideration consisting of cash.

 

“Cash Dividend”
means any dividend or distribution in respect of the ordinary shares which is to be paid or made to the Shareholders as a class in cash
(in whatever currency) and however described and whether payable out of share premium account, profits, retained earnings or any other
capital or revenue reserve or account, and including a distribution or payment to the Shareholders upon or in connection with a reduction
of capital.

 

“CET1 Capital”
means, at any time, the sum, expressed in pounds sterling, of all amounts that constitute Common Equity Tier 1 Capital of the Regulatory
Group, at such time, less any deductions from Common Equity Tier 1 Capital of the Regulatory Group required to be made, at such time,
in each case as calculated by the Company on a consolidated and fully loaded basis in accordance with the Capital Regulations applicable
to the Regulatory Group as at that point in time (which calculation shall be binding on the Trustee and the Holders).

 

“CET1 Ratio”
means the ratio of CET1 Capital to Risk Weighted Assets expressed as a percentage and on the basis that all measures used in such calculation
shall be calculated on a fully loaded basis.

 

“commencement”
means, in relation to the winding up of the Company, the date on which such winding up commences, or is deemed to commence, determined
in accordance with Section 86 or 129 of the Insolvency Act 1986.

 

“Common
Equity Tier 1 Capital” shall have the meaning ascribed to such term in CRD as interpreted and applied in accordance with the
Capital Regulations then applicable to the Regulatory Group.

 

“Comparable
Treasury Issue” means, with respect to any Reset Period, the U.S. Treasury security or securities selected by the Company with
a maturity date on or about the last day of such Reset Period and that would be utilised, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity
of five years.

 

    5 

     

    

 

“Comparable
Treasury Price” means, with respect to any Reset Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations
for such Reset Date (calculated on the Reset Determination Date preceding such Reset Date), after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received, the arithmetic
average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received, then such Reference
Treasury Dealer Quotation as quoted in writing to the Calculation Agent by a Reference Treasury Dealer.

 

“Compliant
Securities” means securities issued directly by the Company that have terms not materially less favourable to an investor than
the terms of the Contingent Capital Notes (as determined by the Company in consultation with an Independent Financial Adviser), provided
that the Company has delivered an officer’s certificate to such effect (including as to such consultation) to the Trustee (upon
which the Trustee shall be entitled to conclusively rely on and accept such certificate without further enquiry and without liability
to any person) prior to the substitution or variation of the Contingent Capital Notes and provided that such substitution or varied securities:

 

(a) (1) contain
terms which comply with the then current requirements of the Capital Regulations in relation to Tier 1 Capital (as defined in the Capital
Regulations); (2) provide for the same interest rate and Interest Payment Dates from time to time applying to the Contingent Capital
Notes; (3) rank pari passu with the ranking of the Contingent Capital Notes; (4) preserve any existing rights under the Indenture to
any accrued interest or other amounts which have not been either paid or cancelled (but without prejudice to our right to cancel the
same under the terms of the Compliant Securities, if applicable); (5) preserve our obligations (including the obligations arising from
the exercise of any right) as to payments of principal in respect of the Contingent Capital Notes, including (without limitation) as
to the timing and amount of such payments; (6) contain terms providing for the conversion of the Contingent Capital Notes, the cancellation
of payments of interest thereon and/or write-down of the principal of the Contingent Capital Notes only if such terms are not materially
less favourable to an investor than the terms of the Contingent Capital Notes; and (7) qualify as hybrid capital instruments as defined
in section 475C of the Corporation Tax Act 2009, to the extent applicable (or in any equivalent provision in any applicable successor
legislation);

 

(b) are (1) admitted
to trading on the International Securities Market of the LSE or (2) listed on such other stock exchange as is a Recognised Stock Exchange
(as defined below) at that time as selected by the Company; and

 

(c) where the Contingent
Capital Notes which have been substituted or varied had a published rating (solicited by, or assigned with our cooperation) from a Rating
Agency (as defined below) immediately prior to their substitution or variation, at least two Rating Agencies have, or where only one
Rating Agency has published such a Rating, such Rating Agency has, ascribed, or announced their intention to ascribe, an equal or higher
published rating to the relevant Compliant Securities.

 

    6 

     

    

 

“control”
means, for the purposes of the definition of a Takeover Event:

 

		(a)	the acquisition or holding of legal or
                                            beneficial ownership of more than 50% of the issued ordinary shares of the Company; or

 

		(b)	the right to appoint and/or remove all
                                            or the majority of the members of the Board of Directors of the Company, whether obtained
                                            directly or indirectly and whether obtained by ownership of share capital, contract or otherwise.

 

and “controlled”
shall be construed accordingly.

 

“Conversion
Date” means the date on which the Automatic Conversion shall take place as specified in the Conversion Trigger Notice, which
shall occur without delay upon, and in any event within one month of, the occurrence of the Conversion Trigger Event.

 

“Conversion
Price” means $2.448, subject to the anti-dilution provisions set forth under Article 4.

 

“Conversion
Trigger Event” means any point in time at which the CET1 Ratio is less than 7.00%.

 

“Conversion
Trigger Notice” means the written notice to be delivered by the Company to the Trustee and the Holders of the Contingent Capital
Notes in accordance with Section 1.06 of the Contingent Convertible Securities Indenture and in the form of Exhibit B attached thereto
following the occurrence of the Conversion Trigger Event. The date on which the Conversion Trigger Notice shall be deemed to have been
given shall be the date on which it is dispatched by the Company to DTC (or if the Contingent Capital Notes are held in definitive form,
to the Holders of the Contingent Capital Notes directly). The Conversion Trigger Notice shall specify (i) that the Conversion Trigger
Event has occurred and the CET1 Ratio resulting in such Conversion Trigger Event, (ii) the Conversion Date, (iii) the then-prevailing
Conversion Price (which Conversion Price shall remain subject to any subsequent adjustment pursuant to ‎Article
4 up to the Conversion Date), (iv) the contact details of any Settlement Share Depository, or, if the Company has been unable to appoint
a Settlement Share Depository, such other arrangements for the issuance and/or delivery of the Settlement Shares, or, if the Holder elects,
ADSs or any Alternative Consideration to the Holders as it shall consider reasonable in the circumstances, (v) that the Company has the
option, at its sole and absolute discretion, to elect that a Settlement Shares Offer be conducted and that, if the Company so elects,
it will issue a Settlement Shares Offer Notice within ten Business Days following the Conversion Date notifying the Holders of its election
and (vi) the Suspension Date and that the Contingent Capital Notes shall remain in existence for the sole purpose of evidencing the Holder’s
right to receive Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, from the Settlement
Share Depository and that the Contingent Capital Notes may continue to be transferable until the Suspension Date.

 

    7 

     

    

 

“CREST”
means the relevant system, as defined in the CREST Regulations, or any successor clearing system.

 

“CREST
Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended.

 

“Current
Market Price” means in respect of an ordinary share at a particular date, the average of the daily Volume Weighted Average
Price of an ordinary share on each of the five (5) consecutive Dealing Days ending on the Dealing Day immediately preceding such date;
provided that, if at any time during the said five (5) Dealing Day period the Volume Weighted Average Price shall have been based on
a price ex-dividend (or ex- any other entitlement) and during some other part of that period the Volume Weighted Average Price shall
have been based on a price cum-dividend (or cum-any other entitlement), then:

 

(i)       if
the ordinary shares to be created, issued, transferred or delivered do not rank for the dividend (or entitlement thereto) in question,
the Volume Weighted Average Price on the dates on which the ordinary shares shall have been based on a price cum-dividend (or cum- any
other entitlement), shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the
Fair Market Value of any such dividend or entitlement per ordinary share as at the date of first public announcement relating to such
dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made
on account of tax, and disregarding any associated tax credit; or

 

(ii)       if
the ordinary shares to be created, issued, transferred or delivered do rank for the dividend (or entitlement) in question, the Volume
Weighted Average Price on the dates on which the ordinary shares shall have been based on a price ex-dividend (or ex- any other entitlement)
shall, for the purposes of this definition, be deemed to be the amount thereof increased by an amount equal to the Fair Market Value
of any such dividend or entitlement per ordinary share as at the date of first public announcement relating to such dividend or entitlement,
in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and
disregarding any associated tax credit;

 

and provided further
that, if on each of the said five (5) Dealing Days, the Volume Weighted Average Price shall have been based on a price cum-dividend (or
cum- any other entitlement) in respect of a dividend (or other entitlement) which has been declared or announced but the ordinary shares
to be issued and delivered do not rank for that dividend (or other entitlement), the Volume Weighted Average Price on each of such dates
shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of
any such dividend or entitlement per ordinary share as at the date of first public announcement relating to such dividend or entitlement,
in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and
disregarding any associated tax credit;

 

    8 

     

    

 

and provided further
that, if the Volume Weighted Average Price of an ordinary share is not available on one or more of the said five (5) Dealing Days, (disregarding
for this purpose the proviso to the definition of Volume Weighted Average Price), then the average of such Volume Weighted Average Prices
which are available in that five (5) Dealing Day period shall be used (subject to a minimum of two such prices), and if only one, or
no, such Volume Weighted Average Price is available in the relevant period, the Current Market Price shall be determined in good faith
by an Independent Financial Adviser (acting as an expert).

 

“Dealing
Day” means a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is open for business
and on which ordinary shares, Other Securities, options, warrants or other rights (as the case may be) may be dealt in (other than a
day on which the Relevant Stock Exchange or relevant stock exchange or securities market is scheduled to or does close prior to its regular
weekday closing time).

 

“Distributable
Items” means subject as otherwise defined in, and/or interpreted in accordance with, the Capital Regulations applicable to
the Company from time to time, the amount of the Company’s profits at the end of the latest financial year plus any profits brought
forward and reserves available for that purpose before distributions to holders of the Contingent Capital Notes, any Parity Securities
and Junior Securities less any losses brought forward, profits which are non-distributable pursuant to the Companies Act 2006 (U.K.)
(the “Companies Act”) or any other provisions of English law and/or Scots law from time to time applicable to the
Company or the Company’s Memorandum and Articles of Association from time to time (together, the “Articles of Association”)
and sums placed to non-distributable reserves in accordance with the Companies Act or other provisions of English law and/or Scots law
from time to time applicable to the Company or the Articles of Association, in each case with respect to the specific category of own
funds instruments to which such law or the Articles of Association relate; such profits, losses and reserves being determined on the
basis of the Company’s individual accounts and not on the basis of the Company’s consolidated accounts.

 

“DTC”
means The Depository Trust Company, or any successor clearing system.

 

“EEA Regulated
Market” means a market as defined by Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council
on markets in financial instruments (as amended from time to time) or similar law in the UK.

 

“Enforcement
Event” means any of (i) a Winding-up or Administration Event prior to the occurrence of a Conversion Trigger Event, (ii) a
Non-Payment Event, or (iii) a breach of a Performance Obligation.

 

“Equity
Share Capital” has the meaning provided in Section 548 of the Companies Act 2006.

 

    9 

     

    

 

“Extraordinary
Dividend” means any Cash Dividend that is expressly declared by the Company to be a capital distribution, extraordinary dividend,
extraordinary distribution, special dividend, special distribution or return of value to its Shareholders as a class or any analogous
or similar term, in which case the Extraordinary Dividend shall be such Cash Dividend.

 

“Fair Market
Value” means, with respect to any property on any date, the fair market value of that property as determined by an Independent
Financial Adviser in good faith, provided that (i) the Fair Market Value of a Cash Dividend shall be the amount of such Cash Dividend;
(ii) the Fair Market Value of any other cash amount shall be the amount of such cash; (iii) where Other Securities, options, warrants
or other rights are publicly traded on a stock exchange or securities market of adequate liquidity (as determined in good faith by an
Independent Financial Adviser), the Fair Market Value (a) of such Other Securities shall equal the arithmetic mean of the daily Volume
Weighted Average Prices of such Other Securities and (b) of such options, warrants or other rights shall equal the arithmetic mean of
the daily closing prices of such options, warrants or other rights, in the case of (a) and (b), during the period of five (5) Dealing
Days on the relevant stock exchange or securities market commencing on such date (or, if later, the first such Dealing Day such Other
Securities, options, warrants or other rights are publicly traded) or such shorter period as such Other Securities, options, warrants
or other rights are publicly traded; (iv) where Other Securities, options, warrants or other rights are not publicly traded on a stock
exchange or securities market of adequate liquidity (as aforesaid), the Fair Market Value of such Other Securities, options, warrants
or other rights shall be determined in good faith by an Independent Financial Adviser, on the basis of a commonly accepted market valuation
method and taking account of such factors as it considers appropriate, including the market price per ordinary share, the dividend yield
of an ordinary share, the volatility of such market price, prevailing interest rates and the terms of such Other Securities, options,
warrants or other rights, including as to the expiry date and exercise price (if any) thereof. Such amounts shall, in the case of (i)
above, be translated into the Relevant Currency (if declared, announced, made, paid or payable in a currency other than the Relevant
Currency, and if the relevant dividend is payable at the option of the Company or a shareholder in any currency additional to the Relevant
Currency, the relevant dividend shall be treated as payable in the Relevant Currency) at the rate of exchange used to determine the amount
payable to shareholders who were paid or are to be paid or are entitled to be paid the Cash Dividend in the Relevant Currency; and, in
any other case, shall be translated into the Relevant Currency (if expressed in a currency other than the Relevant Currency) at the Prevailing
Rate on that date. In addition, in the case of (i) and (ii) above, the Fair Market Value shall be determined on a gross basis and disregarding
any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit.

 

“Final
Cancellation Date” means the date, as specified in the Settlement Request Notice, on which the Contingent Capital Notes in
relation to which no Settlement Notice has been received by the Settlement Share Depository on or before the Notice Cut-off Date shall
be cancelled, which date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

    10 

     

    

 

“First
Call Date” means June 28, 2031.

 

“First
Reset Date” means December 28, 2031.

 

“fully
loaded” means, in relation to a measure that is presented or described as being on a “fully loaded basis” that
such measure is calculated without applying the transitional provisions set out in Part Ten of the CRD Regulation, in accordance with
the Capital Regulations applicable to the Regulatory Group, as at the time such measure is calculated.

 

“Holder”
means a Person in whose name a Contingent Capital Note in global or definitive form is registered in the Contingent Convertible Security
Register.

 

“Independent
Financial Adviser” means an independent financial institution of international repute appointed by the Company at its own expense.

 

“Interest
Payment Date” means each of March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 2021.

 

“Issue
Date” means June 28, 2021, being the date of the initial issue of the Contingent Capital Notes.

 

“Junior
Securities” means any ordinary shares or other securities or other obligations (including any guarantee, credit support or
similar undertaking) of the Company ranking, or expressed to rank, junior to the Contingent Capital Notes in a Winding-up or Administration
Event.

 

“Liabilities”
means the unconsolidated gross liabilities of the Company, as shown in the latest published audited balance sheet of the Company, adjusted
for contingent liabilities and prospective liabilities and for subsequent events in such manner as the directors of the Company may determine.

 

“New Conversion
Condition” shall be satisfied if by not later than seven calendar days following the occurrence of a Takeover Event where the
Acquirer is an Approved Entity, the Company shall have entered into arrangements to the Company’s satisfaction with the Approved
Entity pursuant to which the Approved Entity irrevocably undertakes to the Trustee, for the benefit of the Holders and Beneficial Owners,
to deliver the Relevant Shares to the Settlement Share Depository upon Automatic Conversion.

 

“New Conversion
Condition Effective Date” means the date with effect from which the New Conversion Condition shall have been satisfied.

 

“New Conversion
Price” means the amount determined by the Company in accordance with the following formula:

 

	NCP = ECP ×	VWAPRS 

    VWAPOS

 

    11 

     

    

 

where:

 

		NCP	is the New Conversion Price.

 

		ECP	is the Conversion Price in effect on the
                                            Dealing Day immediately prior to the New Conversion Condition Effective Date.

 

		VWAPRS	means the average of the Volume Weighted
                                            Average Price of the Relevant Shares (translated, if necessary, into U.S. dollars at the
                                            Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the
                                            Dealing Day prior to the date the Takeover Event shall have occurred (and where references
                                            in the definition of “Volume Weighted Average Price” to “ordinary shares”
                                            shall be construed as a reference to the Relevant Shares and in the definition of “Dealing
                                            Day”, references to the “Relevant Stock Exchange” shall be to the primary
                                            Regulated Market on which the Relevant Shares are then listed, admitted to trading or accepted
                                            for dealing).

 

		VWAPOS	is the average of the Volume Weighted
                                            Average Price of the ordinary shares (translated, if necessary, into U.S. dollars at the
                                            Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the
                                            Dealing Day prior to the date the Takeover Event shall have occurred.

 

“Non-Payment
Event” has the meaning specified in ‎Section 5.02.

 

“Non-Qualifying
Takeover Event” means a Takeover Event that is not a Qualifying Takeover Event.

 

“Notice
Cut-Off Date” means the date specified as such in the Settlement Request Notice.

 

“Notional
Preference Shares” means an actual or notional class of preference shares in the capital of the Company having an equal right
to return of assets in a Winding-up or Administration Event to, and so ranking pari passu with, the most senior class or classes
of issued preference shares with non-cumulative dividends (if any) in the capital of the Company from time to time and which have a preferential
right to a return of assets in the Winding-up or Administration Event over, and so rank ahead of all other classes of issued shares for
the time being in the capital of the Company but ranking junior to the claims of Senior Creditors and junior to any notional class of
preference shares in our capital which is referenced in any of our instruments for the purposes of determining a claim in our winding-up
or administration, and, as so referenced, (i) is expressed to have a preferential right to a return of assets in our winding-up or administration
over the holders of all other classes of shares for the time-being in our capital and (ii) is not expressed to rank junior to any other
notional class of preference shares in our capital.

 

    12 

     

    

 

“ordinary
shares” means the ordinary shares of the Company, with a nominal value of £1.00 each.

 

“Ordinary
Share Capital” has the meaning provided in Section 1119 of the Corporation Tax Act 2010.

 

“Other
Securities” means any securities including, without limitation, shares in the capital of the Company, or options, warrants
or other rights to subscribe for or purchase or acquire shares in the capital of the Company (and each an “Other Security”).

 

“Outstanding
Amount” has the meaning set forth in ‎Section 3.17(a).

 

“Parity
Securities” means the most senior ranking class or classes of non-cumulative preference shares in the capital of the Company
from time to time and any other securities of the Company or other securities or other obligations (including any guarantee, credit support
or similar undertaking) ranking, or expressed to rank, pari passu with the Contingent Capital Notes and/or such preference shares
following a Winding-up or Administration Event.

 

“Performance
Obligation” has the meaning specified in ‎Section 5.03.

 

“Prevailing
Rate” means, in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing
as at or about 12 noon (London time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined
at such time, the rate prevailing as at or about 12 noon (London time) on the immediately preceding day on which such rate can be so
determined or, if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other manner as an
Independent Financial Adviser shall in good faith prescribe.

 

“Prospectus”
means the prospectus on Form F-3 related to the offering and sale of the Contingent Capital Notes dated December 13, 2017, as amended
or supplemented.

 

“Prudential
Regulation Authority” or “PRA” means the Prudential Regulation Authority or such other governmental authority
having primary supervisory authority with respect to the prudential regulation of the Company’s business.

 

“Qualifying
Takeover Event” means a Takeover Event where:

 

		(i)	the Acquirer is an Approved Entity;

 

		(ii)	the New Conversion Condition is satisfied;
                                            and

 

		(iii)	the Acquirer and persons “connected”
                                            with the Acquirer together have “control” of the Issuer (where “connected”
                                            and “control” have the same meanings as in section 1122 and 1124 of the Corporation
                                            Tax Act 2010 (to the extent applicable or in any equivalent provision in any applicable successor
                                            legislation)).

 

    13 

     

    

 

“Rating
Agency” means Moody’s Investors Service, Inc., S&P Global Ratings Inc., a division of S&P Global Inc., Fitch
Ratings, Inc., or any of their affiliates, or any successor.

 

“Recognised
Stock Exchange” means a recognised stock exchange as defined in section 1005 of the UK Income Tax Act 2007 as the same may
be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time.

 

“Record
Date” means the 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.

 

“Reference
Treasury Dealer” means each of up to five banks selected by the Company (following, where practicable, consultation with the
Calculation Agent), or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors,
or (ii) market makers in pricing corporate bond issues denominated in U.S. dollars.

 

“Reference
Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Reset Date, the arithmetic average,
as determined by the Calculation Agent, of the bid and offered prices for the applicable Comparable Treasury Issue, expressed in each
case as a percentage of its principal amount, at 11:00 a.m. (New York City time), on the Reset Determination Date for such Reset Date.

 

“Regular
Record Date” means, with respect to the payment of interest on the Contingent Capital Notes, the 15th calendar day (whether
or not a Business Day) preceding an Interest Payment Date.

 

“Regulated
Market” means an EEA Regulated Market or another regulated, regularly operating, recognized stock exchange or securities market
in an OECD member state.

 

“Regulatory
Group” means the Company, its subsidiary undertakings, participations, participating interests and any subsidiary undertakings,
participations or participating interests held (directly or indirectly) by any of its subsidiary undertakings from time to time and any
other undertakings from time to time consolidated with it for regulatory purposes, in each case in accordance with the rules and guidance
of the PRA then in effect.

 

“Relevant
Currency” means sterling or, if at the relevant time or for the purposes of the relevant calculation or determination the London
Stock Exchange is not the Relevant Stock Exchange, the currency in which the ordinary shares or the Relevant Shares (as applicable) are
quoted or dealt in on the Relevant Stock Exchange at such time.

 

“Relevant
Page” means the relevant page on Bloomberg or such other information service provider that displays the relevant information.

 

    14 

     

    

 

“Relevant
Shares” means Ordinary Share Capital of the Approved Entity that constitutes Equity Share Capital or the equivalent (or depositary
or other receipts representing the same) which is listed and admitted to trading on a Regulated Market.

 

“Relevant
Stock Exchange” means the London Stock Exchange or, if at the relevant time the ordinary shares are not at that time listed
and admitted to trading on the London Stock Exchange, the principal stock exchange or securities market on which the ordinary shares
are then listed, admitted to trading or quoted or accepted for dealing.

 

“relevant
U.K. authority” means any authority with the ability to exercise a U.K. bail-in power.

 

“Reset
Date” means the First Reset Date and every fifth anniversary thereafter.

 

“Reset
Determination Date” means the second Business Day immediately preceding each Reset Date.

 

“Reset
Period” means any period from and including each Reset Date to but excluding the next succeeding Reset Date.

 

“Risk Weighted
Assets” means, at any time, the aggregate amount, expressed in pounds sterling, of the risk weighted assets of the Regulatory
Group, at such time, as calculated by the Company on a consolidated and fully loaded basis in accordance with the Capital Regulations
applicable to the Regulatory Group (which calculation shall be binding on the Trustee and the Holders) and where the term “risk
weighted assets” means the risk weighted assets or total risk exposure amount, as calculated by the Company in accordance with
the Capital Regulations applicable to the Regulatory Group as at that point in time.

 

“secondary
non-preferential debts” shall have the meaning given to it in the Banks and Building Societies (Priorities on Insolvency) Order
2018 and any other law or regulation applicable to the Company which is amended by such order, as each may be amended or replaced from
time to time.

 

“Senior
Creditors” means creditors of the Company (i) who are unsubordinated creditors, (ii) whose claims are, or are expressed to
be, subordinated (whether only in the event of a Winding-up or Administration Event or otherwise) to the claims of unsubordinated creditors
of the Company but not further or otherwise, (iii) who are creditors in respect of any secondary non-preferential debts, or (iv) who
are subordinated creditors of the Company (whether as aforesaid or otherwise), other than those whose claims rank, or are expressed to
rank, pari passu with, or junior to, the claims of the Holders and/or pari passu with or junior to any claims ranking pari
passu with the claims of the Holders, in each case, in a Winding-up or Administration Event occurring prior to any Conversion Trigger
Event.

 

“Settlement
Date” means:

 

    15 

     

    

 

(i)       with
respect to any Contingent Capital Note in relation to which a Settlement Notice is received by the Settlement Share Depository on or
before the Notice Cut-off Date where the Company has not elected that the Settlement Share Depository will carry out a Settlement Shares
Offer in accordance with ‎Section 3.18, the date that is two (2)
Business Days after the latest of (i) the Conversion Date, (ii) the date on which the Company announces that it will not elect for the
Settlement Share Depository to carry out a Settlement Shares Offer (or, if no such announcement is made, the last date on which the Company
is entitled to give a Settlement Shares Offer Notice), and (iii) the date on which the relevant Settlement Notice has been received by
the Settlement Share Depository;

 

(ii)       with
respect to any Contingent Capital Note in relation to which a Settlement Notice is received by the Settlement Share Depository on or
before the Notice Cut-off Date where the Company has elected that the Settlement Share Depository will carry out a Settlement Shares
Offer in accordance with ‎Section 3.18, the date that is the later
of ‎(a) two (2) Business Days after the day on which the Settlement
Shares Offer Period expires or is terminated and ‎(b) two (2) Business
Days after the date on which such Settlement Notice has been so received by the Settlement Share Depository; and

 

(iii)       with
respect to any Contingent Capital Note in relation to which a Settlement Notice is not so received by the Settlement Share Depository
on or before the Notice Cut-off Date, the date on which the Settlement Share Depository delivers the relevant Settlement Shares, or,
if the Holder elects, ADSs or the Alternative Consideration, as applicable, to the relevant Holders or Beneficial Owners.

 

“Settlement
Notice” means a written notice (substantially in the form attached hereto as Exhibit F) to be delivered by a Holder or Beneficial
Owner (or custodian, broker, nominee or other representative thereof) to the Settlement Share Depository, with a copy to the Trustee,
on or before the Notice Cut-off Date containing the following information: (i) the name of the Holder or Beneficial Owner (or custodian,
broker, nominee or other representative thereof), (ii) the Tradable Amount of the book-entry interests in the Contingent Capital Notes
held by such Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) on the date of such notice, (iii)
the name to be entered in the Company’s share register, (iv) whether Settlement Shares are to be delivered to the Holder or Beneficial
Owner or ADSs, if the Holder elects, are to be deposited with the ADS Depository on behalf of the Holder or Beneficial Owner into the
Company’s ADS facility, (v) the details of the CREST or other clearing system account (subject to the limitations set out in ‎Section
3.19(i)), the details of the registered account in the Company’s ADS facility or, if the Settlement Shares are not a participating
security in CREST or another clearing system, the address to which the Settlement Shares (or the Settlement Share Component, if any,
of any Alternative Consideration) and/or cash (if not expected to be delivered through DTC) should be delivered and (vi) such other details
as may be required by the Settlement Share Depository.

 

    16 

     

    

 

“Settlement
Request Notice” means the written notice (substantially in the form attached hereto as Exhibit E) to be delivered by the Company
to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form,
by the Company to the Trustee directly and to the Holders at their registered addresses as shown on the Contingent Convertible Security
Register) on the Suspension Date requesting that Holders and Beneficial Owners complete a Settlement Notice and specifying (i) the Notice
Cut-off Date and (ii) the Final Cancellation Date.

 

“Settlement
Share Component” means that portion, if any, of the Alternative Consideration consisting of Settlement Shares.

 

“Settlement
Share Depository” means a reputable financial institution, depository entity, trust company or similar entity (which in each
such case is wholly independent of the Company) to be appointed by the Company on or prior to any date when a function ascribed to the
Settlement Share Depository in the Indenture is required to be performed, to perform such functions and which will be required to undertake,
for the benefit of the Holders and Beneficial Owners, to hold the Settlement Shares (and the Alternative Consideration, if any) on behalf
of such Holders and Beneficial Owners in one or more segregated accounts, unless otherwise required to be transferred out of such accounts
for the purposes of the Settlement Shares Offer on terms consistent with the Indenture.

 

“Settlement
Shares” means the ordinary shares credited as fully paid to be issued and delivered to the Settlement Share Depository by the
Company on the Conversion Date.

 

“Settlement
Shares Offer” has the meaning attributed to such term in ‎Section
3.18.

 

“Settlement
Shares Offer Price” has the meaning attributed to such term in ‎Section
3.18.

 

“Settlement
Shares Offer Notice” means the written notice (substantially in the form attached hereto as Exhibit D) to be delivered by the
Company to the Trustee directly and to the Holders at their addresses shown on the Contingent Convertible Security Register if the Company
has elected that a Settlement Shares Offer be made specifying (i) the Settlement Shares Offer Period, and (ii) the Suspension Date, if
the Suspension Date has not previously been specified in the Conversion Trigger Notice.

 

“Settlement
Shares Offer Period” means the period during which the Settlement Shares Offer may occur, which period shall end no later than
forty (40) Business Days after the delivery of the Settlement Shares Offer Notice.

 

“Shareholders”
means the holders of ordinary shares.

 

“Solvency
Condition” has the meaning set forth in ‎Section 6.01(e)
hereof.

 

“Subsidiary”
means a subsidiary or a “subsidiary undertaking” as such terms are defined in Sections 1159 and 1162 of the U.K. Companies
Act 2006.

 

    17 

     

    

 

“Successor
in Business” means, in relation to the Issuer, any entity which (i) acquires all or substantially all of the undertaking and/or
assets of the Issuer or (ii) acquires the beneficial ownership of the whole of the issued voting stock and/or share capital of the Issuer
or (iii) into which the Issuer is amalgamated, merged or reconstructed and where the Issuer is not the continuing company.

 

“Suspension
Date” means the date specified in the Conversion Trigger Notice or Settlement Shares Offer Notice as the date on which DTC
shall suspend all clearance and settlement of transactions in the Contingent Capital Notes in accordance with its rules and procedures.

 

A “Takeover
Event” shall occur if, at any time after the Issue Date, any person or persons acting in concert (as defined in the Takeover
Code of the United Kingdom Panel on Takeovers and Mergers) acquires control of the Company.

 

“Takeover
Event Notice” has the meaning attributed to such term as set forth in ‎Section
4.02.

 

“Tax Event”
has the meaning specified in ‎Section 3.09.

 

“Tradable
Amount” has the meaning specified in ‎Section 3.01(m) hereof.

 

“U.K. bail-in
power” means any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws,
regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment
firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group,
including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United
Kingdom within the context of the U.K. resolution under the Banking Act, pursuant to which any obligations of a bank, banking group company,
credit institution or investment firm or any of its affiliates can be reduced, cancelled, modified, transferred and/or converted into
shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which
any right in a contract governing such obligation may be deemed to have been exercised.

 

“U.S. Treasury
Rate” means, with respect to any Reset Date from which such rate applies, the rate per annum equal to: (1) the average of the
yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days
immediately prior to the Reset Determination Date for such Reset Date and appearing under the caption “Treasury constant maturities”
at 5:00 p.m. (New York City time) on the Reset Determination Date for such Reset Date in the applicable most recently published statistical
release designated “H.15 Daily Update”, or any successor publication that is published by the Board of Governors of the Federal
Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury
Constant Maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published during
the week immediately prior to the Reset Determination Date for such Reset Date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Reset Date.

 

    18 

     

    

 

The U.S. Treasury
Rate shall be determined by the Calculation Agent (as defined above).

 

If the U.S. Treasury
Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the
rate in percentage per annum as notified by the Calculation Agent to the Company equal to the yield on U.S. Treasury securities having
a maturity of five years as set forth in the most recently published statistical release designated “H.15 Daily Update” under
the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors
of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under
the caption “Treasury constant maturities” for the maturity of five years) at 5:00 p.m. (New York City time) on the Reset
Determination Date on which such rate was set forth in such release (or any successor release).

 

“Volume
Weighted Average Price” means, in respect of an ordinary share or Other Security on any Dealing Day, the order book volume-weighted
average price of an ordinary share or Other Security published by or derived (in the case of an ordinary share) from the relevant Bloomberg
page or (in the case of Other Securities (other than ordinary shares), options, warrants or other rights) from the principal stock exchange
or securities market on which such Other Securities, options, warrants or other rights are then listed or quoted or dealt in, if any,
or, in any such case, such other source as shall be determined in good faith to be appropriate by an Independent Financial Adviser on
such Dealing Day, provided that if on any such Dealing Day such price is not available or cannot otherwise be determined as provided
above, the Volume Weighted Average Price of an ordinary share, Other Security, option, warrant or other right, as the case may be, in
respect of such Dealing Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding Dealing
Day on which the same can be so determined or determined as an Independent Adviser might otherwise determine in good faith to be appropriate.

 

“Winding-up
or Administration Event” means:

 

(i) an order is
made, or an effective resolution is passed, for the winding up of the Company (excluding in any such case a solvent winding-up solely
for the purpose of a reconstruction, amalgamation, reorganization, merger or consolidation of the Company, or the substitution in place
of the Company of a Successor in Business, the terms of which have previously been approved by the Trustee or in writing by Holders of
not less than 2/3 (two-thirds) in aggregate principal amount of the Contingent Capital Notes); or

 

(ii) an administrator
of the Company is appointed and such administrator gives notice that it intends to declare and distribute a dividend.

 

    19 

     

    

 

Section 1.02.     
Separability Clause. In case any provision in this Eighth Supplemental Indenture or the Contingent Capital Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

Section 1.03.     
Benefits of Instrument. Nothing in this Eighth Supplemental Indenture, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim
under the Indenture.

 

Section 1.04.     
Relation to Contingent Convertible Securities Indenture. This Eighth Supplemental Indenture constitutes an integral part
of the Contingent Convertible Securities Indenture. Notwithstanding any other provision of this Eighth Supplemental Indenture, all provisions
of this Eighth Supplemental Indenture are expressly and solely for the benefit of the Holders and Beneficial Owners and any such provisions
shall not be deemed to apply to any other Securities issued under the Contingent Convertible Securities Indenture and shall not be deemed
to amend, modify or supplement the Contingent Convertible Securities Indenture for any purpose other than with respect to the Contingent
Capital Notes; provided that pursuant to and in accordance with Section 3.08 of the Contingent Convertible Securities Indenture, the
duties of the Trustee under the Indenture shall extend only to Persons deemed to be Holders.

 

Article
2

Amendments To The Contingent Convertible Securities Indenture

 

Section 2.01.     
Amended Definitions. With respect to the Contingent Capital Notes only, the definitions of “Capital Regulations”,
“CRD IV”, “CRD IV Directive”, “CRD IV Regulation” in Section 1.01 of the Contingent Convertible Securities
Indenture are amended and restated in their entirety by the following definitions:

 

“Capital
Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy
and/or minimum requirement for own funds and eligible liabilities and/or loss absorbing capacity binding on credit institutions (including,
without limitation, as to leverage) then in effect as applicable to the Company or the Regulatory Group including if and to the extent
applicable to the Company or the Regulatory Group and without limitation to the generality of the foregoing, any delegated or implementing
acts (such as regulatory technical standards) adopted by the European Commission, including as they form part of the domestic law of
the United Kingdom either on or before December 31, 2020 or by virtue of the EUWA, and as they may be amended or replaced by the laws
of England and Wales from time to time; and any laws or regulations as well as requirements, guidelines and policies adopted by the PRA
and/or any other national or European authority from time to time, in each case to the extent applicable to the Company or the Regulatory
Group (whether or not such laws, regulations, requirements, guidelines or policies are applied generally or specifically to the Company
or to the Regulatory Group), in each case relating to capital adequacy and/or minimum requirement for own funds and eligible liabilities
and/or loss absorbing capacity.

 

    20 

     

    

 

“CRD”
means (i) the CRD Directive and (ii) the CRD Regulation to the extent applicable to the Issuer or the Regulatory Group.

 

“CRD
Directive” means Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity
of credit institutions and the prudential supervision of credit institutions and investment firms, as amended or replaced from time to
time (including as amended by Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019) and/or any Capital
Regulations , to the extent that they form part of the domestic law of the United Kingdom either on or before December 31, 2020 or by
virtue of the EUWA, and as they may be amended or replaced by the laws of England and Wales from time to time.

 

“CRD
Regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential
requirements for credit institutions and investment firms amending Regulation (EU) No. 648/2012, as amended or replaced from time to
time (including as amended by Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019, to the extent then
in application) and/or any Capital Regulations, to the extent that they form part of the domestic law of the United Kingdom either on
or before December 31, 2020 or by virtue of the EUWA, and as they may be amended or replaced by the laws of England and Wales from time
to time.

 

Article
3

The Contingent Capital Notes

 

Section 3.01.     
Form, Title, Terms and Payments. The form of any Security that is designated as a Contingent Capital Note shall be evidenced
by one or more global notes in registered form (each, a “Global Note”) deposited with, or on behalf of, DTC on the
Issue Date. The Global Notes shall be registered in the name of Cede & Co. and executed and delivered in substantially the form attached
hereto as Exhibit A. The terms of the Global Notes are hereby incorporated herein by reference and made a part hereof as if set forth
herein in full.

 

(a)           
There is hereby established a new series of Securities designated as the 4.600% Reset Perpetual Subordinated Contingent Convertible
Additional Tier 1 Capital Notes (the “Contingent Capital Notes”).

 

    21 

     

    

 

(b)           
The Contingent Capital Notes shall be issued in denominations of $200,000 principal amount and integral multiples of $1,000 in
excess thereof.

 

(c)           
The Contingent Capital Notes shall be initially limited in aggregate principal amount to $750,000,000. The Company may from time
to time, without the consent of the Holders, issue additional Contingent Capital Notes having the same ranking and same interest rate,
interest cancellation terms, redemption terms, Conversion Price and other terms as the Contingent Capital Notes described in this Eighth
Supplemental Indenture, except for the price to public and Issue Date. Any such additional Contingent Capital Notes subsequently issued
shall rank equally and ratably with the Contingent Capital Notes in all respects, so that such further Contingent Capital Notes shall
be consolidated and form a single series with the Contingent Capital Notes.

 

(d)           
The Contingent Capital Notes shall be perpetual Securities and shall have no Stated Maturity in respect of principal.

 

(e)           
The Securities shall not have a sinking fund.

 

(f)            
Any proposed transfer of an interest in the Contingent Capital Notes held in the form of a Global Note shall be effected through
the book-entry system maintained by DTC.

 

(g)           
The interest rate on the Contingent Capital Notes is set forth in ‎Section 3.02 hereof.

 

(h)           
All references to Foreign Government Securities and U.S. Government Obligations in the Contingent Convertible Securities Indenture
shall be deleted in their entirety and be inapplicable to the Contingent Capital Notes, including but not limited to the definition of
“Outstanding” in the Contingent Convertible Securities Indenture and any references to such terms in Sections 4.01, 4.02
and 4.03 of the Contingent Convertible Securities Indenture.

 

(i)            
Payments in respect of the Contingent Capital Notes, including payments of principal and interest, shall be subject to the conditions
set forth under Sections ‎3.02, ‎3.03, ‎3.04, ‎3.05, ‎3.13 and ‎3.15
hereof.

 

(j)            
The Contingent Capital Notes shall be subject to Automatic Conversion following the occurrence of a Conversion Trigger Event as
provided in ‎Section 3.16 hereof and shall be subject to the Enforcement Events as provided in ‎Article 5 hereof.

 

(k)           
The Company may, subject to ‎Section 3.13 hereof, redeem or repurchase the Contingent Capital Notes in accordance with
Sections ‎3.08, ‎3.09, ‎3.10 and ‎3.11 hereof.

 

(l)            
The Company shall undertake reasonable efforts to admit the Contingent Capital Notes to trading on the International Securities
Market of the London Stock Exchange on the Issue Date or as soon as practicable thereafter. The Company shall endeavor to maintain such
admission to trading as long as the Contingent Capital Notes remain outstanding.

 

    22 

     

    

 

(m)            
The denomination of each interest in a Global Note shall be the “Tradable Amount” of such book-entry interest.
Prior to the Automatic Conversion, the aggregate Tradable Amount of the interests in each Global Note shall equal such Global Note’s
outstanding principal amount. Following the Automatic Conversion, the principal amount of each Contingent Capital Note shall equal zero,
but the Tradable Amount of the book-entry interests in each Contingent Capital Note shall remain unchanged as a result of the Automatic
Conversion.

 

Section 3.02.     
Interest.

 

(a)           
From and including the Issue Date to but excluding the First Reset Date, interest will accrue on the Contingent Capital Notes
at an initial rate equal to 4.600% per annum. From and including each Reset Date to but excluding the next succeeding Reset Date (each
such period, a “Reset Period”), interest will accrue on the Contingent Capital Notes at a rate per annum equal to
the sum of the applicable U.S. Treasury Rate (as defined herein) as determined by the Calculation Agent on the relevant Reset Determination
Date and 3.100% converted to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.005 rounded
down). Subject to Sections ‎ ‎3.03 and ‎3.04‎
and the last two sentences of this paragraph below, and other than with respect to any interest payment made on the first
Interest Payment Date, interest, if any, on the Contingent Capital Notes shall be payable in four equal quarterly installments in arrear
on each Interest Payment Date in the relevant Reset Period, provided that if such Interest Payment Date is not a Business Day, the Interest
Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed or made in respect of
such delay. If any scheduled redemption date is not a Business Day, payment of interest, if any, and principal shall be postponed to
the next Business Day, but interest on that payment will not accrue during the period from and after any scheduled redemption date. If
any Reset Date is not a Business Day, the Reset Date shall occur on the next succeeding Business Day. Subject to Sections ‎3.03
and ‎3.04‎
below, if any interest payment on the Contingent Capital Notes is to be made on a date other than on an Interest Payment Date,
including on any scheduled redemption date, it shall be computed by the Calculation Agent by applying the interest rate applicable during
the applicable Reset Period and multiplying the product by “30/360” and rounding the resulting figure to the nearest cent
(half a cent being rounded upwards). For this purpose “30/360” means in respect of any period, the number of days in the
relevant period, from and including the first day in such period to but excluding the last day in such period, such number of days being
calculated on the basis of a 360 day year consisting of twelve (12) months of thirty (30) days, divided by 360.

 

(b)           
In addition to any other restrictions on payments of principal and interest contained in this Eighth Supplemental Indenture, no
payment of the principal amount of the Contingent Capital Notes following any proposed redemption or payment of interest on the Contingent
Capital Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. authority unless, at the
time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made
by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

    23 

     

    

 

Section 3.03.     
Interest Payments Discretionary.

 

(a)           
Interest on the Contingent Capital Notes shall be due and payable only at the full discretion of the Company, and the Company
shall have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would
otherwise be payable on any Interest Payment Date. If the Company does not make an interest payment in respect of the Contingent Capital
Notes on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment),
such non-payment shall evidence the Company’s exercise of its discretion to cancel such interest payment (or the portion of such
interest payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be or become due and payable.
For the avoidance of doubt, if the Company provides notice to cancel a portion, but not all, of an interest payment in respect of the
Contingent Capital Notes, and the Company subsequently does not make a payment of the remaining portion of such interest payment on the
relevant Interest Payment Date, such non-payment shall evidence the Company’s exercise of its discretion to cancel such remaining
portion of such interest payment, and accordingly such remaining portion of the interest payment shall also not be due and payable.

 

(b)           
Interest on the Contingent Capital Notes shall only be due and payable on an Interest Payment Date to the extent it is not cancelled
or deemed cancelled (in each case, in whole or in part) in accordance with the provisions set forth in ‎Section 3.02(b), ‎Section
3.03(a), ‎Section 3.04, ‎Section 3.16(h) and ‎Section 6.01 hereof, respectively, and any interest cancelled
or deemed cancelled (in each case, in whole or in part) pursuant to such sections shall not be due and shall not accumulate or be payable
at any time thereafter, and Holders and Beneficial Owners shall have no rights thereto or to receive any additional interest or compensation
as a result of such cancellation or deemed cancellation of interest in respect of the Contingent Capital Notes. The Company may use such
cancelled payment without restriction to meet its obligations as they fall due.

 

Section 3.04.     
Restrictions on Interest Payments.

 

(a)           
Without limitation on the provisions of ‎Section 3.03 and subject to the extent permitted in paragraph ‎(b)
below hereof in respect of partial interest payments in respect of the Contingent Capital Notes, the Company shall not make an interest
payment in respect of the Contingent Capital Notes on any Interest Payment Date (and such interest payment shall therefore be deemed
to have been cancelled and thus shall not be due and payable on such Interest Payment Date) if:

 

(i)           
the Company has an amount of Distributable Items on any such scheduled Interest Payment Date that is less than the sum
of (i) all payments (other than redemption payments which do not reduce Distributable Items) made or declared by the Company since the
end of its latest financial year and prior to such Interest Payment Date on or in respect of any Parity Securities, the Contingent Capital
Notes and any Junior Securities and (ii) all payments (other than redemption payments which do not reduce Distributable Items) payable
by the Company on such Interest Payment Date (x) on the Contingent Capital Notes and (y) on or in respect of any Parity Securities or
any Junior Securities, in the case of each of (i) and (ii), excluding any payments already accounted for in determining the Distributable
Items, or

 

    24 

     

    

 

(ii)           
the Solvency Condition is not (or would not be) satisfied in respect of such interest payment.

 

(b)           
The Company may, in its sole discretion, elect to make a partial interest payment in respect of the Contingent Capital Notes on
any Interest Payment Date, only to the extent that such partial interest payment may be made without breaching the restriction in paragraph
‎(a) above.

 

(c)           
For purposes of this Eighth Supplemental Indenture, any interest cancelled pursuant to ‎Section 3.04(a) shall be deemed
cancelled under the terms of the Contingent Capital Notes and the Indenture and shall not be due and payable.

 

Section 3.05.     
Agreement to Interest Cancellation. By its acquisition of the Contingent Capital Notes, each Holder and each Beneficial
Owner shall be deemed to have acknowledged and agreed that:

 

(a)           
interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect
of the relevant interest period to the extent that it has been (x) cancelled (in whole or in part) by the Company at the Company’s
sole discretion and/or (y) deemed cancelled (in whole or in part); and

 

(b)           
a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of the Indenture
and the Contingent Capital Notes shall not constitute a default in payment or otherwise under the terms of the Contingent Capital Notes
or the Indenture.

 

Section 3.06.     
Notice of Interest Cancellation. Notwithstanding anything to the contrary in the Indenture (including Section 1.06 of the
Contingent Convertible Securities Indenture), if practicable, the Company shall provide notice of any cancellation or deemed cancellation
of interest (in each case, in whole or in part) to the Holders of the Contingent Capital Notes through DTC (or, if the Contingent Capital
Notes are held in definitive form, to the Holders directly at their addresses shown in the Contingent Convertible Security Register)
and to the Trustee directly on or prior to the relevant Interest Payment Date. Failure to provide such notice shall have no impact on
the effectiveness of, or otherwise invalidate, any such cancellation or deemed cancellation of interest (and accordingly, such interest
will not be due and payable), or give the Holders and Beneficial Owners any rights as a result of such failure.

 

Section 3.07.     
Payment of Principal, Interest and Other Amounts.

 

    25 

     

    

 

(a)           
Payments of principal of and interest, if any, on the Contingent Capital Notes shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts and such payments on Contingent Capital
Notes represented by a Global Note shall be made through one or more Paying Agents appointed under the Contingent Convertible Securities
Indenture to DTC or its nominee, as the Holder of the Global Note. Initially, the Paying Agent and the Security Registrar for the Contingent
Capital Notes shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may
change the Paying Agent without prior notice to the Holders of the Contingent Capital Notes, and in such an event the Company may act
as Paying Agent or Contingent Capital Securities Registrar.

 

(b)           
Payments of principal, interest and other amounts in respect of the Contingent Capital Notes represented by a Global Note shall
be made by wire transfer of immediately available funds on the date such payment is scheduled to be paid. The Company shall, on each
date on which any payment in respect of the Contingent Capital Notes becomes due, transfer to the Paying Agent such amount as may be
required for the purposes of such payment.

 

Section 3.08.     
Optional Redemption. Subject to the satisfaction of the Solvency Condition and the pre-conditions described in ‎Section
3.13 and ‎Section 3.14 hereof, the Company may, at the Company’s option and in its sole discretion on (i) any day falling
in the period commencing on (and including) the First Call Date and ending on (and including) the First Reset Date, and (ii) any Reset
Date thereafter, in each case at a redemption price equal to 100% of the principal amount of the Contingent Capital Notes together with
any Accrued Interest to (but excluding) the date of redemption.

 

Section 3.09.     
Optional Tax Redemption. Subject to the satisfaction of the Solvency Condition and the pre-conditions described in ‎Section
3.13 and ‎Section 3.14 hereof, if a Tax Event shall occur the Company may at any time and at the Company’s option and
in its sole discretion redeem the Contingent Capital Notes, in whole but not in part, at a redemption price equal to 100% of the principal
amount of the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date of redemption. A “Tax
Event” will be deemed to have occurred with respect to the Contingent Capital Notes if, at any time, the Company shall determine
that, as a result of any change in, or amendment to, the laws or regulations of the U.K. or any political subdivision or any authority
thereof or therein having power to tax (including any treaty to which the U.K. or any political subdivision or any authority thereof
or therein is a party), or any change in the official application of such laws or regulations (including a decision of any court or tribunal
or the application by any tax authority), which change or amendment becomes effective or applicable, or, in the case of a change in or
amendment to law, where such change or amendment is enacted by a U.K. Act of Parliament or by a Statutory Instrument, if such U.K. Act
of Parliament or Statutory Instrument is enacted, on or after the Issue Date:

 

    26 

     

    

 

(a)           
in making a payment under the Contingent Capital Notes in respect of interest, the Company has or will or would on the next Interest
Payment Date become obligated to pay Additional Amounts;

 

(b)           
a payment of interest on the next Interest Payment Date in respect of any of the Contingent Capital Notes would be treated as
a “distribution” within the meaning of Section 1000 of the U.K. Corporation Tax Act 2010 (or any statutory modification or
re-enactment thereof for the time being);

 

(c)           
the Company would not be entitled to claim a deduction in respect of a payment of interest payable on the next Interest Payment
Date in computing its U.K. taxation liabilities (or the value of such deduction to the Company would be materially reduced);

 

(d)           
as a result of the Contingent Capital Notes being in issue, the Company would not be able to have losses or deductions (including
in respect of a payment of interest on the Contingent Capital Notes) set against the profits or gains, or profits or gains offset by
losses or deductions, of companies with which it is or would otherwise be grouped for applicable U.K. tax purposes (whether under the
group relief system current as at the date of issue of the Contingent Capital Notes or any similar system or systems having like effect
as may exist from time to time);

 

(e)           
a future write-down of the principal amount of the Contingent Capital Notes or conversion of the Contingent Capital Notes into
ordinary shares would result in a U.K. tax liability, or income, profit or gain being treated for U.K. tax purposes as accruing, arising
or being received;

 

(f)            
the Contingent Capital Notes would no longer be treated as loan relationships for U.K. tax purposes; or

 

(g)           
the Contingent Capital Notes or any part thereof would be treated as a derivative or an embedded derivative for U.K. tax purposes,

 

in each case, the
effect of which cannot be avoided by the Company taking reasonable steps available to it.

 

In any case where
the Company shall determine that as a result of a Tax Event, it is entitled to redeem the Contingent Capital Notes, it shall be required
to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel
of recognized standing (selected by the Company), in a form satisfactory to the Trustee confirming that the Tax Event has occurred and
the effect of such Tax Event cannot be avoided by the Company taking reasonable steps available to it.

 

Section 3.10.     
Capital Disqualification Event Redemption. Subject to the satisfaction of the Solvency Condition and the pre-conditions
described in ‎Section 3.13 and ‎Section 3.14 hereof, the Company may, at the Company’s option and in its
sole discretion, at any time redeem the Contingent Capital Notes, in whole but not in part, at a redemption price equal to 100% of the
principal amount of the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date fixed for redemption,
if, at any time on or after the Issue Date, a Capital Disqualification Event has occurred.

 

    27 

     

    

 

Section 3.11.     
Optional Repurchase. The Company may at any time and from time to time and to the extent not prohibited by CRD repurchase
beneficially or procure others to repurchase beneficially for its account the Contingent Capital Notes in the open market, by tender
or by private agreement, in any manner and at any price or at differing prices. Contingent Capital Notes purchased or otherwise acquired
by the Company may be (i) held, (ii) resold or (iii) at the Company’s sole discretion, surrendered to the Trustee for cancellation
(in which case all Contingent Capital Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter
may not be reissued or resold). Any such purchases will be subject to the satisfaction of the Solvency Condition and of the pre-conditions
described in ‎Section 3.13 hereof.

 

Section 3.12.     
Substitution or Variation. If a Tax Event or a Capital Disqualification Event has occurred, then the Company may, subject
to the conditions described under Section 3.13 below, but without any requirement for the consent or approval of the holders or beneficial
owners of the Contingent Capital Notes, at any time (whether before or following the First Call Date) either substitute the Contingent
Capital Notes in whole (but not in part) for, or vary the terms of the Contingent Capital Notes so that they remain or, as appropriate,
become, Compliant Securities.

 

Notice of any substitution
or variation of the Contingent Capital Notes due to the occurrence of a Tax Event or Capital Disqualification Event will be given by
the Company to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form, to the Holders
directly at their addresses shown on the Contingent Convertible Security Register) not less than fifteen (15) days, nor more than thirty
(30) days, before the date of such substitution or variation (as applicable). The Company shall deliver written notice of such substitution
or variation of the Contingent Capital Notes to the Trustee at least five (5) Business Days prior to the date on which the relevant notice
of substitution or variation is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall
specify the date fixed for substitution or, as the case may be, variation of the Contingent Capital Notes and shall, except as otherwise
provided herein, be irrevocable.

 

Prior to the giving
of any notice of substitution or variation of the Contingent Capital Notes, the Company shall deliver to the Trustee an officer’s
certificate stating that (i) in the Company’s belief a Tax Event or Capital Disqualification Event has occurred and (ii) the terms
of the relevant Compliant Securities comply with the definition thereof. The Trustee is entitled to conclusively rely on and accept such
officer’s certificate without any further inquiry, in which event it shall be conclusive and binding on the Trustee and the holders
and beneficial owners of the Contingent Capital Notes. Subject to receipt of such certificate, the Trustee shall (at the Company’s
request and expense) use its reasonable endeavours to co-operate with the Company to give effect to the substitution or variation, provided
that the Trustee shall not be obliged to co-operate in any such substitution or variation if the securities resulting from such substitution
or variation, or the co-operation in such substitution or variation, would, in the opinion of the Trustee, have the effect of (i) exposing
the Trustee to any liability against which it is not indemnified and/or secured and/or pre-funded to its satisfaction; (ii) changing,
increasing or adding to the obligations or duties of the Trustee; or (iii) removing or amending any protection or indemnity afforded
to, or any other provision in favour of, the Trustee under the Indenture, this prospectus supplement and/or the Contingent Capital Notes.
If the Trustee does not so co-operate as provided above, the Company may, subject as provided above, redeem the Contingent Capital Notes
as provided in this ‎Article 3.

 

    28 

     

    

 

Section 3.13.     
Pre-conditions to Redemptions, Repurchases, Substitution or Variation. Any redemption, repurchase, substitution or variation
of the Contingent Capital Notes by the Company as provided under Sections ‎3.08, ‎3.09, ‎3.10, ‎3.11,
3.12 and 3.14 of this Eighth Supplemental Indenture, is subject to (except to the extent the Capital Regulations no longer so require)
the Company having met the following conditions:

 

(a)           
the Company has given such notice to the PRA, as the PRA may then require before the Company becomes committed to the proposed
redemption, repurchase, substitutions or variation;

 

(b)           
in the case of any redemption or repurchase, the PRA has granted permission for the Company to make any such redemption or repurchase
of the Contingent Capital Notes upon a satisfactory finding that either:

 

(i)           
on or before such redemption or repurchase of any of the Contingent Capital Notes, the Company replaces such Contingent Capital
Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher quality at terms that are sustainable
for its income capacity; or

 

(ii)           
the Company has demonstrated to the satisfaction of the PRA that its own funds and eligible liabilities (as defined by the Capital
Regulations) would following such redemption or repurchase, exceed the requirements laid down in CRD and Directive 2014/59/EU, as amended
or replaced from time to time (including, without limitation, by Directive (EU) 2019/879), or similar laws in the United Kingdom (including,
without limitation, the Banking Act 2009, as amended) by a margin that the PRA considers necessary;

 

(c)           
no Conversion Trigger Notice has been delivered; and

 

(d)           
in the case of any redemption or repurchase, the Solvency Condition is satisfied in respect of the relevant payment on the date
scheduled for redemption or repurchase; and

 

    29 

     

    

 

(e)           
the Company has complied with any alternative or additional pre-conditions as set out in the Capital Regulations and/or required
by the PRA as a prerequisite to its permission for such redemptions or repurchases, at the time; and

 

(f)            
in the case of any substitution or variation, such substitution or variation being effected in compliance with any applicable
regulatory and legal requirements, including the Trust Indenture Act.

 

(g)           
with respect to Sections ‎3.09 and ‎3.10 only, and except to the extent that the Capital Regulations no
longer so require, the Company may only redeem or repurchase the Contingent Capital Notes before five years after the Issue Date if,
in addition to the condition set out in (b) above, the following conditions are met:

 

(i)           
in the case of a redemption due to a Tax Event pursuant to ‎Section 3.09, the Company demonstrates to the satisfaction
of the PRA that the Tax Event relating to the Contingent Capital Notes is material and was not reasonably foreseeable at the time of
issuance of the Contingent Capital Notes; or

 

(ii)           
in the case of a redemption due to the occurrence of a Capital Disqualification Event pursuant to ‎Section 3.10,
(x) the PRA considers such change to be sufficiently certain and (y) the Company demonstrates to the satisfaction of the PRA that the
Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Contingent Capital Notes; or

 

(iii)           
before or at the same time as such redemption or repurchase of the Contingent Capital Notes, the Company replaces the Contingent
Capital Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher quality at terms that are sustainable
for its income capacity and the PRA has permitted that action on the basis of the determination that it would be beneficial from a prudential
point of view and justified by exceptional circumstances; or

 

(iv)           
the Contingent Capital Notes are repurchased for market making purposes in accordance with the Capital Regulations.

 

Section 3.14.     
Notice of Redemption.

 

(a)           
Before the Company may redeem the Contingent Capital Notes pursuant to Sections ‎3.08, ‎3.09 or ‎3.10,
the Company shall deliver to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form,
to the Holders directly at their addresses shown on the Contingent Convertible Security Register) prior notice of not less than fifteen
(15) days, nor more than thirty (30) days. The Company shall deliver written notice of such redemption of the Contingent Capital Notes
to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless
a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s election to redeem the Contingent
Capital Notes and the date fixed for such redemption and shall be irrevocable except in the limited circumstances described in paragraphs
‎(b), ‎(c), ‎(d), (e), ‎(f) or ‎(g) below.

 

    30 

     

    

 

(b)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but the
Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for redemption in such notice,
such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in respect of the redemption
amount shall be due and payable.

 

(c)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but prior
to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been delivered pursuant to ‎Section
3.16(b), such notice of redemption shall be automatically rescinded and shall be of no force and effect, and no payment in respect of
the redemption amount shall be due and payable.

 

(d)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but prior
to the payment of the redemption amount with respect to such redemption the relevant U.K. authority exercises its U.K. bail-in power
with respect to the Company, the relevant redemption notice shall be automatically rescinded and shall be of no force and effect, and
no payment of the redemption amount shall be due and payable.

 

(e)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but prior
to the date of any such redemption the Company has not given notice to the PRA and/or the PRA has objected to or refused to grant permission
to the Company, as applicable, to redeem the relevant Contingent Capital Notes (in each case to the extent, and in the manner, required
by the relevant Capital Regulations), such notice of redemption shall be automatically rescinded and shall be of no force and effect
and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

(f)            
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but in
respect of any redemption proposed to be made prior to the fifth anniversary of the Issue Date, if and to the extent then required under
the Capital Regulations (A) in the case of redemption following the occurrence of a Tax Event, the Company has not demonstrated to the
satisfaction of the PRA that the Tax Event is material and was not reasonably foreseeable as at the Issue Date, or (B) in the case of
redemption following the occurrence of a Capital Disqualification Event, the PRA does not consider such change to be sufficiently certain
and/or the Company has not demonstrated to the satisfaction of the PRA that the relevant change was not reasonably foreseeable as at
the Issue Date; such notice of redemption shall be automatically rescinded and shall be of no force and effect and no payment
in respect of any redemption amount, if applicable, shall be due and payable.

 

    31 

     

    

 

(g)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 3.14, but prior
to the payment of the redemption amount with respect to such redemption the Company is not in compliance with any alternative or additional
pre-conditions required by the PRA as a pre-requisite to its permission for such redemption, such notice of redemption shall be automatically
rescinded and shall be of no force and effect, and no payment in respect of the redemption amount shall be due and payable.

 

If any
of the events specified in paragraphs ‎(b), ‎(c),
‎(d), ‎(e),
‎(f) or ‎(g)
above occurs, the Company shall promptly deliver notice to DTC, as the Holder of the Global Securities (or, if the Contingent Capital
Notes are definitive Securities, to the Holders directly at their addresses shown on the Contingent Convertible Security Register) and
to the Trustee directly, specifying the occurrence of the relevant event.

 

Any notice
of redemption shall state:

 

(i)           
the redemption date;

 

(ii)           
that on the redemption date the redemption price will, subject to the satisfaction of the conditions set forth in the Indenture,
become due and payable upon each Contingent Capital Note being redeemed and that, subject to certain exceptions, interest will cease
to accrue on or after that date;

 

(iii)           
the place or places where the Contingent Capital Notes are to be surrendered for payment of the redemption price; and

 

(iv)           
the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Contingent Capital Notes being redeemed.

 

Section 3.15.     
Cancelled Interest Not Payable upon Redemption. Any interest payments that have been cancelled or deemed cancelled pursuant
to Sections ‎3.03 or ‎3.04 hereof shall not be payable if the Contingent Capital Notes are redeemed pursuant to
Sections ‎3.08, ‎3.09 or ‎3.10 hereof.

 

Section 3.16.     
Automatic Conversion upon Conversion Trigger Event.

 

(a)           
If the Conversion Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the
Company’s obligations under the Contingent Capital Notes shall be irrevocably and automatically released in consideration of the
Company’s issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Contingent
Capital Notes shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged as a result
of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated. If the Company has been unable to
appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including, without limitation,
issuance of the Settlement Shares to another independent nominee or to the Holders of the Contingent Capital Notes directly), the issuance
and delivery of the Settlement Shares or any Alternative Consideration, as applicable, to the Holders of the Contingent Capital Notes,
and such issuance and delivery of the Settlement Shares or any Alternative Consideration, as applicable, shall irrevocably and automatically
release all of the Company’s obligations under the Contingent Capital Notes as if the Settlement Shares had been issued and delivered
to the Settlement Share Depository and, in which case, where the context so admits, references in this Eighth Supplemental Indenture
and the Contingent Capital Notes to the issue and delivery of Settlement Shares to the Settlement Share Depository shall be construed
accordingly and apply mutatis mutandis. Where practicable, the Company shall make such other arrangements to allow Holders, if
they so elect, to take delivery of their Settlement Shares in the form of ADSs.

 

    32 

     

    

 

(b)           
Upon its determination that a Conversion Trigger Event has occurred, the Company shall ‎(a) immediately inform the
PRA of the occurrence of a Conversion Trigger Event, ‎(b) prior to the delivery of the Conversion Trigger Notice, deliver
to the Trustee an Officer’s Certificate substantially in the form attached hereto as Exhibit C, specifying that the Conversion
Trigger Event has occurred. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any duty
whatsoever of further inquiry as sufficient and conclusive evidence of the occurrence of the Conversion Trigger Event, in which event
such Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners, and (c) deliver
a Conversion Trigger Notice to the Trustee directly and to DTC as the Holder of the Global Securities without delay after the occurrence
of such Conversion Trigger Event (and in any event within such period as the PRA may require).

 

(c)           
The date on which the Conversion Trigger Notice shall be deemed to have been given shall be the date on which it is dispatched
by the Company to DTC (or, if the Contingent Capital Notes are in definitive form, to the Holders and Beneficial Owners directly).

 

(d)           
The Company shall request that DTC post the Conversion Trigger Notice on its Reorganization Inquiry for Participants System pursuant
to DTC’s procedures then in effect (or such other system as DTC uses for providing notices to holders of securities). Within two
(2) Business Days of its receipt of the Conversion Trigger Notice, the Trustee shall transmit the Conversion Trigger Notice to the direct
participants in DTC holding the Contingent Capital Notes at such time.

 

(e)           
The Settlement Shares to be issued and delivered shall be so issued and delivered on terms permitting a Settlement Shares Offer
and shall, except where the Company has been unable to appoint a Settlement Share Depository and/or as otherwise provided herein and
by the Contingent Capital Notes, initially be registered in the name of the Settlement Share Depository, which, subject to a Settlement
Shares Offer, shall hold such Settlement Shares on behalf of the Holders and Beneficial Owners. By virtue of its holding of any Contingent
Capital Notes, each Holder and Beneficial Owner shall be deemed to have irrevocably directed the Company to issue and deliver the Settlement
Shares corresponding to the conversion of its holding of Contingent Capital Notes to the Settlement Share Depository (or to such other
relevant recipient).

 

    33 

     

    

 

(f)            
The Settlement Share Depository (or the relevant recipient in accordance with this Eighth Supplemental Indenture and the terms
of the Contingent Capital Notes, as applicable) shall hold the Settlement Shares (and the Alternative Consideration, if any) on behalf
of the Holders and Beneficial Owners. For so long as the Settlement Shares are held by the Settlement Share Depository, each Holder and
Beneficial Owner shall be entitled to direct the Settlement Share Depository or such other relevant recipient, as applicable, to exercise
on its behalf all rights of an ordinary Shareholder (including voting rights and rights to receive dividends); provided, however, that
Holders and Beneficial Owners shall not have any rights to sell or otherwise transfer such Settlement Shares unless and until such time
as the Settlement Shares have been delivered to the Holders or Beneficial Owners in accordance with the procedures set forth under ‎Section
3.19 hereof.

 

(g)           
Provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient
in accordance with the terms of the Contingent Capital Notes) in accordance with the terms of the Contingent Capital Notes and the Indenture,
with effect from and on the Conversion Date, Holders and Beneficial Owners shall have recourse only to the Settlement Share Depository
(or to such other relevant recipient, as applicable) for the delivery to them of Settlement Shares, or, if the Holder elects, ADSs or
the Alternative Consideration, as the case may be, to which such Holders and Beneficial Owners are entitled. Subject to the occurrence
of a Winding-up or Administration Event on or following the Conversion Trigger Event, if the Company fails to issue and deliver the Settlement
Shares upon Automatic Conversion to the Settlement Share Depository on the Conversion Date, the only right of Holders and Beneficial
Owners shall be to claim to have such Settlement Shares so issued and delivered.

 

(h)           
Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and delivers the Settlement
Shares to the Settlement Share Depository (or the relevant recipient in accordance with the terms of the Contingent Capital Notes) in
accordance with the terms of the Contingent Capital Notes, Holders and Beneficial Owners shall not have any rights against the Company
with respect to repayment of the principal amount of the Contingent Capital Notes or payment of interest or any other amount on or in
respect of such Contingent Capital Notes, which liabilities of the Company shall be automatically released, and accordingly the principal
amount of the Contingent Capital Notes shall equal zero at all times thereafter. Any interest in respect of an interest period ending
on any Interest Payment Date falling between the date of a Conversion Trigger Event and the Conversion Date shall be deemed to have been
cancelled pursuant to ‎Section 3.03 above upon the occurrence of such Conversion Trigger Event and shall not be due and payable.

 

    34 

     

    

 

(i)            
Notwithstanding any other provision herein, by its acquisition of the Contingent Capital Notes, each Holder and each Beneficial
Owner shall be deemed to have (i) agreed to all of the terms and conditions of the Contingent Capital Notes, including, without limitation,
to those related to (x) Automatic Conversion of its Contingent Capital Notes following the Conversion Trigger Event and (y) the appointment
of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient
in accordance with the terms of this Eighth Supplemental Indenture or the Contingent Capital Notes) and the potential sale of the Settlement
Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur without any further action on
the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and following, the occurrence of the Automatic
Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Contingent Capital Notes and the liability
of the Company to pay any such amounts (including the principal amount of, or any interest in respect of, the Contingent Capital Notes)
shall be automatically released, and the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee
with respect to the Conversion Trigger Event and any related Automatic Conversion, (iii) waived, to the extent permitted by the Trust
Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties,
powers and rights in respect of, the Indenture and in connection with the Contingent Capital Notes, including, without limitation, claims
related to or arising out of or in connection with the Conversion Trigger Event and/or any Automatic Conversion, and (iv) authorized,
directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Contingent Capital Notes
to take any and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the
part of such Holder or Beneficial Owner or the Trustee.

 

(j)            
The procedures set forth in this ‎Section 3.16 are subject to change to reflect changes in DTC practices, and the Company
may make changes to the procedures set forth in this ‎Section 3.16 to the extent reasonably necessary, in the opinion of the
Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of ‎Section 8.01.

 

(k)           
Notwithstanding anything to the contrary contained in the Indenture or the Contingent Capital Notes, once the Company has delivered
a Conversion Trigger Notice following the occurrence of a Conversion Trigger Event, (i) subject to the right of Holders and Beneficial
Owners pursuant to ‎Section 5.03 in the event of a failure by the Company to issue and deliver any Settlement Shares to the
Settlement Share Depository on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever with regard to an
Automatic Conversion upon a Conversion Trigger Event and the Holders and Beneficial Owners shall have no rights whatsoever under the
Indenture or the Contingent Capital Notes to instruct the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion
Trigger Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related
to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial Owners shall cease automatically
and shall be null and void and of no further effect; except in each case of ‎(i) and ‎(ii) of this ‎Section
3.16(k), with respect to any rights of Holders or Beneficial Owners with respect to any payments under the Contingent Capital Notes that
were unconditionally due and payable prior to the date of the Conversion Trigger Notice or unless the Trustee is instructed in writing
by the Company to act otherwise.

 

    35 

     

    

 

(l)            
All authority conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this ‎Section 3.16,
including the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs, executors, administrators,
trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.

 

(m)            
The Trustee shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence
of a Conversion Trigger Event and the timing of such Conversion Trigger Event, (ii) the failure of the Company to post or deliver the
underlying CET1 Ratio calculations of a Conversion Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the
Company’s decision to deliver a Conversion Trigger Notice or the related Automatic Conversion, (iv) the adequacy of the disclosure
of these provisions in the Prospectus or any other offering material in respect of the Contingent Capital Notes or for the direct or
indirect consequences thereof or (v) any other requirement of the Company contained herein related to a Conversion Trigger Event or the
Automatic Conversion.

 

(n)           
Following the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient
in accordance with the terms of the Contingent Capital Notes) on the Conversion Date, the Contingent Capital Notes shall remain in existence
until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right to receive
Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as the case may be, from the Settlement Share Depository
(or such other relevant recipient, as applicable).

 

(o)           
The Holders and Beneficial Owners shall not at any time have the option to convert the Contingent Capital Notes into Settlement
Shares.

 

(p)           
The occurrence of the Automatic Conversion shall not constitute an Enforcement Event.

 

Section 3.17.     
Settlement Shares.

 

(a)           
The number of Settlement Shares to be issued to the Settlement Share Depository on the Conversion Date shall equal the quotient
obtained by dividing the (i) aggregate principal amount of the Contingent Capital Notes Outstanding immediately prior to the Automatic
Conversion on the Conversion Date, (the “Outstanding Amount”) by (ii) the Conversion Price prevailing on the Conversion
Date. The number of Settlement Shares to be delivered to each Holder shall be rounded down, if necessary, to the nearest whole number
of Settlement Shares. Fractions of Settlement Shares will not be delivered to the Settlement Share Depository following the Automatic
Conversion and no cash payment shall be made in lieu thereof. The number of Settlement Shares to be held by the Settlement Share Depository
for the benefit of each Holder shall equal the number of Settlement Shares thus calculated multiplied by a fraction equal to (i) the
Tradable Amount of the book-entry interests in the Contingent Capital Notes held by such Holder on the Conversion Date divided by (ii)
the Outstanding Amount, rounded down, if necessary, to the nearest whole number of Settlement Shares.

 

    36 

     

    

 

(b)           
The Settlement Shares issued following the Automatic Conversion shall be fully paid and non-assessable Ordinary Share Capital
and shall in all respects rank pari passu with the fully paid ordinary shares of the Company in issue on the Conversion Date,
except in any such case for any right excluded by mandatory provisions of applicable law, and except that the Settlement Shares so issued
shall not rank for (or, as the case may be, the relevant Holder or Beneficial Owner shall not be entitled to receive) any rights, the
record date for entitlement to which falls prior to the Conversion Date.

 

(c)           
The procedures set forth in this ‎Section 3.17 are subject to change to reflect changes in DTC practices, and the Company
may make changes to the procedures set forth in this ‎Section 3.17 to the extent reasonably necessary, in the opinion of the
Company, to reflect such changes in DTC practices as provided under ‎Section 3.19(a) hereof. Any such changes shall be subject
to the provisions of ‎Section 8.01.

 

Section 3.18.     
Settlement Shares Offer.

 

(a)           
Within ten (10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect that
the Settlement Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion, all
or some of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the Shareholders upon Automatic
Conversion (the “Settlement Shares Offer”), such offer to be at a cash price per Settlement Share that will be no
less than the Conversion Price (translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company
in its sole discretion) and subject to certain adjustments as provided under ‎Article 4 of this Eighth Supplemental Indenture
(the “Settlement Shares Offer Price”).

 

(b)           
Any Settlement Shares Offer shall be made subject to applicable laws and regulations in effect at the relevant time and shall
be conducted, if at all, only to the extent that the Company, in its sole and absolute discretion, determines that the Settlement Shares
Offer is practicable. The Company reserves the right, in its sole and absolute discretion, to elect that the Settlement Share Depository
terminate the Settlement Shares Offer at any time during the Settlement Shares Offer Period. If the Company makes such an election, it
shall provide at least three (3) Business Days’ notice to the Trustee directly and to DTC as the Holder of the Global Securities
(or, if the Contingent Capital Notes are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses
shown on the Contingent Convertible Security Register) and if it does so, the Settlement Share Depositary may, in its sole and absolute
discretion, (including, without limitation, by changing the Suspension Date) take steps to deliver to Holders and Beneficial Owners (or
the custodian, nominee, broker or other representative thereof) of the Contingent Capital Notes the Settlement Shares or, if the Holder
elects, ADSs, as applicable, at a time that is earlier than the time at which such Holders and Beneficial Owners (or the custodian, nominee,
broker or other representative thereof) would have otherwise received the Alternative Consideration, had the Settlement Shares Offer
been completed.

 

    37 

     

    

 

(c)           
Upon expiry of the Settlement Shares Offer Period, the Settlement Share Depository shall provide notice to the Holders of the
Contingent Capital Notes of the composition of the Alternative Consideration (and of the deductions to the Cash Component, if any, of
the Alternative Consideration (as set out in the definition of “Alternative Consideration” in ‎Section
1.01)) per $1,000 Tradable Amount of the Contingent Capital Notes. The Alternative Consideration will be held by the Settlement Share
Depository on behalf of the Holders and Beneficial Owners and will be delivered to Holders and Beneficial Owners pursuant to the procedures
set forth under ‎Section 3.19.

 

(d)           
The Cash Component of any Alternative Consideration shall be payable by the Settlement Share Depository to the Holders and Beneficial
Owners (or the custodian, nominee, broker or other representative thereof) of the Contingent Capital Notes whether or not the Solvency
Condition is satisfied.

 

(e)           
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner, acknowledges and agrees that, if the Company
elects, in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, such Holder
or Beneficial Owner shall be deemed to have (i) irrevocably consented to any Settlement Shares Offer and, notwithstanding that such Settlement
Shares are held by the Settlement Share Depository on behalf of Holders and Beneficial Owners, to the Settlement Share Depository’s
using the Settlement Shares delivered to it to settle any Settlement Shares Offer, (ii) irrevocably consented to the transfer of the
beneficial interest it holds in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one
or more purchasers identified by the Settlement Share Depository in connection with the Settlement Shares Offer, (iii) irrevocably agreed
that the Company and the Settlement Share Depository may take any and all actions necessary to conduct the Settlement Shares Offer in
accordance with the terms of the Contingent Capital Notes, and (iv) irrevocably agreed that none of the Company, the Trustee or the Settlement
Share Depository shall, to the extent permitted by applicable law, incur any liability to the Holders or Beneficial Owners in respect
of the Settlement Shares Offer (except for the obligations of the Settlement Share Depository in respect of the Holders’ and Beneficial
Owners’ entitlement to, and subsequent delivery of, any Alternative Consideration).

 

Section 3.19.     
Settlement Procedure.

 

(a)           
Delivery of the Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, to the Holders
and Beneficial Owners shall be made in accordance with the procedures set forth in this ‎Section 3.19, which remain subject
to change to reflect changes in DTC practices and the Company may make changes to the procedures set forth in this ‎Section
3.19 to the extent necessary, in the opinion of the Company, to reflect such changes in DTC practices.

 

(b)           
The Settlement Shares Offer Notice shall specify the Suspension Date, provided that the Suspension Date has not previously been
specified in the Conversion Trigger Notice.

 

    38 

     

    

 

(c)           
On the Suspension Date, the Company shall deliver, to the Trustee directly and to DTC as the Holder of the Global Securities (or,
if the Contingent Capital Notes are in definitive form, to the Holders directly at their addresses shown on the Contingent Convertible
Security Register), a Settlement Request Notice, pursuant to which the Company shall request that Holders and Beneficial Owners complete
a Settlement Notice and shall specify the Notice Cut-off Date and the Final Cancellation Date.

 

(d)           
Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) shall not receive delivery of
the relevant Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, unless such Holders or
Beneficial Owners (or the custodian, nominee, broker or other representative thereof) deliver the Settlement Notice to the Settlement
Share Depository on or before the Notice Cut-off Date; provided that, if such delivery is made after the end of normal business hours
at the specified office of the Settlement Share Depository, such delivery shall be deemed for all purposes to have been made or given
on the next following Business Day.

 

(e)           
If the Contingent Capital Notes are held through DTC, the Settlement Notice must be given in accordance with the standard procedures
of DTC (which may include, without limitation, delivery of the notice to the Settlement Share Depository by electronic means) and in
a form acceptable to DTC and the Settlement Share Depository. With respect to any Contingent Capital Notes held in definitive form, the
Settlement Notice must be delivered to the specified office of the Settlement Share Depository together with the relevant Contingent
Capital Notes.

 

(f)            
Subject to satisfaction of the requirements and limitations set forth in this ‎Section 3.19 and provided that the Settlement
Notice and the relevant Contingent Capital Notes, if applicable, are delivered on or before the Notice Cut-Off Date, the Settlement Share
Depository shall deliver the relevant Alternative Consideration or Settlement Shares (rounded down to the nearest whole number of Settlement
Shares) to, or shall deposit such relevant Settlement Shares with the ADS Depository on behalf of, the relevant Holder or Beneficial
Owner (or custodian, nominee, broker or other representative thereof) of the relevant Contingent Capital Notes completing the relevant
Settlement Notice in accordance with the instructions given in such Settlement Notice or its nominee on the applicable Settlement Date.

 

(g)           
Each Settlement Notice shall be irrevocable. The Settlement Share Depository shall determine, in its sole and absolute discretion,
whether any Settlement Notice has been properly completed and delivered, and such determination shall be conclusive and binding on the
relevant Holder or Beneficial Owner. If any Holder or Beneficial Owner fails to properly complete and deliver a Settlement Notice and
the relevant Contingent Capital Notes, if applicable, the Settlement Share Depository shall be entitled to treat such Settlement Notice
as null and void.

 

    39 

     

    

 

(h)           
Neither the Company nor any member of the Group shall pay any taxes or duties (including without limitation, any stamp duty, stamp
duty reserve tax, or any other capital issue, transfer, registration, financial transaction or documentary tax or duty) arising upon
Automatic Conversion or that may arise or be paid as a consequence of the issue and delivery of Settlement Shares to the Settlement Share
Depository or in connection with the issue of ADSs. A Holder or Beneficial Owner must pay any taxes or duties (including without limitation,
any stamp duty, stamp duty reserve tax, or any other capital issue, transfer, registration, financial transaction or documentary tax
or duty) arising upon Automatic Conversion in connection with the issue and delivery of the Settlement Shares to the Settlement Share
Depository and/or the issue of ADSs and such Holder or Beneficial Owner must pay all, if any, such taxes or duties (including without
limitation, any stamp duty, stamp duty reserve tax, or any other capital issue, transfer, registration, financial transaction or documentary
tax or duty) arising by reference to any disposal or deemed disposal of such Holders or Beneficial Owner’s Contingent Capital Note
or interest therein. Any taxes and duties (including without limitation, any stamp duty, stamp duty reserves tax, or any other capital
issue, transfer, registration, financial transaction or documentary tax or duty) arising on delivery or transfer of Settlement Shares
to a purchaser in any Settlement Shares Offer shall be payable by the relevant purchaser of those Settlement Shares.

 

(i)            
Except to the extent a Holder or Beneficial Owner has elected to receive ADSs, the Settlement Shares (and the Settlement Share
Component, if any, of any Alternative Consideration) shall not be available for delivery (i) to, or to a nominee for any person providing
a clearance service within the meaning of Section 96 of the Finance Act 1986 of the United Kingdom (which would include delivery into
Euroclear or Clearstream, Luxembourg, but not, subject to (iii) below, delivery into CREST) or (ii) to a person, or nominee or agent
for a person, whose business is or includes issuing depository receipts within the meaning of Section 93 of the Finance Act 1986 of the
United Kingdom, in each case at any time prior to the “abolition day” as defined in Section 111(1) of the Finance Act 1990
of the United Kingdom, or (iii) to the CREST account of such a person described in ‎(i) or ‎(ii).

 

(j)            
The Company may make changes to the procedures set forth in this ‎Section 3.19 to the extent such changes are reasonably
necessary, in the opinion of the Company, to effect the delivery of the Settlement Shares or, if the Holder elects, ADSs, as applicable,
to the Holders and Beneficial Owners.

 

Section 3.20.     
Failure to Deliver a Settlement Notice. If any Holder or Beneficial Owner (or custodian, nominee, broker or other representative
thereof) fails to deliver a Settlement Notice and the relevant Contingent Capital Notes, if applicable, to the Settlement Share Depository
on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold the Settlement Shares or Alternative Consideration
in respect of such Holder or Beneficial Owner, until a Settlement Notice (and the relevant Contingent Capital Notes, if applicable) are
so delivered; provided, however, that the relevant Contingent Capital Notes shall be cancelled on the Final Cancellation
Date, and any Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of Contingent Capital Notes
delivering a Settlement Notice after the Notice Cut-off Date shall be required to provide evidence of its entitlement to the relevant
Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, satisfactory to the Settlement Share
Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, Alternative Consideration or ADSs
(if so elected to be deposited with the ADS Depository on its behalf). The Company shall have no liability to any Holder or Beneficial
Owner of the Contingent Capital Notes for any loss resulting from such Holder’s or Beneficial Owner’s failure to receive
any Alternative Consideration, Settlement Shares or ADSs, or from any delay in the receipt thereof, in each case as a result of such
Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) failing to duly submit a Settlement Notice
and the relevant Contingent Capital Notes, if applicable, on a timely basis or at all.

 

    40 

     

    

 

Section 3.21.     
Delivery of ADSs. In respect of Settlement Shares for which Holders or Beneficial Owners elect to be converted into ADSs
as specified in the Settlement Notice, subject to the Company’s right to elect that a Settlement Shares Offer be made in accordance
with ‎Section 3.18(a), the Settlement Share Depository shall deposit with the ADS Depository, the number of Settlement Shares
to be issued upon Automatic Conversion of the relevant Contingent Capital Notes, and the ADS Depository shall issue the corresponding
number of ADSs to such Holders or Beneficial Owner (per the ADS-to-ordinary share ratio in effect on the Conversion Date). Once deposited,
the ADS Depository shall be entitled to the economic rights of a holder or beneficial owner of the Settlement Shares for the purposes
of any dividend entitlement and otherwise on behalf of the ADS holders, and the Holder or Beneficial Owner will become the record holder
of the related ADSs for all purposes under the ADS Deposit Agreement. However, the issuance of the ADSs by the ADS Depository may be
delayed until the depositary bank or the custodian receives confirmation that all required approvals have been given and that the Settlement
Shares have been duly transferred to the custodian and that all applicable depositary fees and payments have been paid to the ADS Depository.

 

Section 3.22.     
Agreement with Respect to Exercise of U.K. Bail-in Power.

 

(a)           
Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of
the Contingent Capital Notes, by its acquisition of the Contingent Capital Notes, each Holder and each Beneficial Owner acknowledges,
accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. authority that may result
in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Contingent Capital Notes,
(ii) the conversion of all, or a portion of, the principal amount of, or interest on, the Contingent Capital Notes into ordinary shares
or other securities or other obligations of the Company or another person and/or (iii) the amendment of the amount of interest due on
the Contingent Capital Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period;
which U.K. bail-in power may be exercised by means of variation to the terms of the Contingent Capital Notes solely to give effect to
the above. Each Holder and Beneficial Owner of the Contingent Capital Notes further acknowledges and agrees that the rights of the Holders
and/or Beneficial Owners under the Contingent Capital Notes are subject to, and will be varied, if necessary, solely to give effect to
the exercise of any U.K. bail-in power by the relevant U.K. authority. For the avoidance of doubt, the potential conversion of the Contingent
Capital Notes into ordinary shares, other securities or other obligations in connection with the exercise of any U.K. bail-in power by
the relevant U.K. authority is separate and distinct from the Automatic Conversion following a Conversion Trigger Event.

 

    41 

     

    

 

(b)           
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner:

 

(i)           
acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent
Capital Notes or cancellation or deemed cancellation of interest on the Contingent Capital Notes pursuant to Sections ‎3.03
or ‎3.04 shall not give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c)
(Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(ii)           
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or
abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. authority with respect
to the Contingent Capital Notes;

 

(iii)           
acknowledges and agrees that, (A) upon the exercise of any U.K. bail-in power by the relevant U.K. authority, (a) the Trustee
shall not be required to take any further directions from Holders or Beneficial Owners of the Contingent Capital Notes under Section
5.12 of the Contingent Convertible Securities Indenture and (B) the Indenture shall impose no duties upon the Trustee whatsoever with
respect to the exercise of any U.K. bail-in power by the relevant U.K. authority. Notwithstanding the foregoing, if, following the completion
of the exercise of the U.K. bail-in power by the relevant U.K. authority, the Contingent Capital Notes remain outstanding (for example,
if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Contingent Capital Notes) then
the Trustee’s duties under the Indenture shall remain applicable with respect to the Contingent Capital Notes following such completion
to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company and the Trustee agree that
a supplemental indenture is not necessary; and

 

(iv)           
shall be deemed to have (y) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice
by the relevant U.K. authority of its decision to exercise such power with respect to the Contingent Capital Notes and (z) authorized,
directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Contingent Capital Notes
to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Contingent
Capital Notes as it may be imposed, without any further action or direction on the part of such Holder and such Beneficial Owner or the
Trustee.

 

    42 

     

    

 

(c)           
Each Holder or Beneficial Owner that acquires its Contingent Capital Notes in the secondary market shall be deemed to acknowledge
and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial
Owners that acquire the Contingent Capital Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement
and agreement to be bound by and consent to the terms of the Contingent Capital Notes, including in relation to interest cancellation,
Automatic Conversion, the U.K. bail-in power, the Settlement Shares Offer, the write-down in the event of a Non-Qualifying Takeover Event
and the limitations on remedies specified in ‎Section 5.04 hereof.

 

(d)           
No repayment of the principal amount of the Contingent Capital Notes following any proposed redemption of the Contingent Capital
Notes or payment of interest on the Contingent Capital Notes shall become due and payable after the exercise of any U.K. bail-in power
by the relevant U.K. authority unless, at the time of such repayment or payment, such repayment or payment would be permitted to be made
by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

(e)           
Upon the exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes, the Company
shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying
Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information
purposes.

 

(f)            
The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Contingent Convertible Securities
Indenture shall survive any exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital
Notes and any Automatic Conversion hereunder.

 

(g)           
The exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes shall not constitute
an Enforcement Event.

 

Article
4

Anti-Dilution

 

Section 4.01.     
Adjustment of Conversion Price. Upon the occurrence of any of the events described below, the Conversion Price shall be
adjusted as follows:

 

(a)           
If and whenever there shall be a consolidation, reclassification, redesignation or subdivision in relation to the ordinary shares
which alters the number of ordinary shares in issue, the Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately prior to such consolidation, reclassification, redesignation or subdivision by the following fraction:

 

	 	A

    B

 

		where:	

 

    43 

     

    

 

		A	is the aggregate number of ordinary shares
                                            in issue immediately before such consolidation, reclassification, redesignation or subdivision,
                                            as the case may be; and

 

		B	is the aggregate number of ordinary shares
                                            in issue immediately after, and as a result of, such consolidation, reclassification, redesignation
                                            or subdivision, as the case may be.

 

Such adjustment
shall become effective on the date the consolidation, reclassification, redesignation or subdivision, as the case may be, takes effect.

 

(b)           
If and whenever the Company shall issue any ordinary shares to Shareholders credited as fully paid by way of capitalization of
profits or reserves (including any share premium account or capital redemption reserve) other than (1) where any such ordinary shares
are or are to be issued instead of the whole or part of a Cash Dividend which the Shareholders would or could otherwise have elected
to receive, (2) where the Shareholders may elect to receive a Cash Dividend in lieu of such ordinary shares or (3) where any such ordinary
shares are or are expressed to be issued in lieu of a dividend (whether or not a Cash Dividend equivalent or amount is announced or would
otherwise be payable to the Shareholders, whether at their election or otherwise), the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately prior to such issue by the following fraction:

 

	 	A

    B

 

		where:	

 

		A	is the aggregate number of ordinary shares
                                            in issue immediately before such issue; and

 

		B	is the aggregate number of ordinary shares
                                            in issue immediately after such issue.

 

Such adjustment
shall become effective on the date of issue of such ordinary shares.

 

(c)           
If and whenever the Company shall pay any Extraordinary Dividend to its Shareholders, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

 

	 	A – B

       A

 

		where:	

 

		A	is the Current Market Price of one ordinary
                                            share on the Effective Date; and

 

    44 

     

    

 

		B	is the portion of the aggregate Extraordinary
                                            Dividend attributable to one ordinary share, with such portion being determined by dividing
                                            the aggregate Extraordinary Dividend by the number of ordinary shares entitled to receive
                                            the relevant Extraordinary Dividend. If the Extraordinary Dividend shall be expressed in
                                            a currency other than the Relevant Currency, it shall be converted into the Relevant Currency
                                            at the Prevailing Rate on the relevant Effective Date.

 

Such adjustment
shall become effective on the Effective Date.

 

“Effective
Date” means, in respect of this ‎Section 4.01(c), the first
date on which the ordinary shares are traded ex-the Extraordinary Dividend on the Relevant Stock Exchange.

 

(d)           
If and whenever the Company shall issue ordinary shares to its Shareholders as a class by way of rights or the Company or any
member of the Group or (at the direction or request or pursuant to arrangements with the Company or any member of the Group) any other
company, person or entity, shall issue or grant to Shareholders as a class by way of rights, any options, warrants or other rights to
subscribe for or purchase ordinary shares, or any Other Securities which by their terms of issue carry (directly or indirectly) rights
of conversion into, or exchange or subscription for, any ordinary shares (or shall grant any such rights in respect of existing Other
Securities so issued), in each case at a price per ordinary share which is less than 95% of the Current Market Price per ordinary share
on the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective
Date by the following fraction:

 

	 	A + B

    A + C

 

		where:	

 

		A	is the number of ordinary shares in issue
                                            on the Effective Date;

 

		B	is the number of ordinary shares which the
                                            aggregate consideration (if any) receivable for the ordinary shares issued by way of rights,
                                            or for the Other Securities issued by way of rights, or for the options or warrants or other
                                            rights issued by way of rights and for the total number of ordinary shares deliverable on
                                            the exercise thereof, would purchase at such Current Market Price per ordinary share on the
                                            Effective Date; and

 

		C	is the number of ordinary shares to be issued
                                            or, as the case may be, the maximum number of ordinary shares which may be issued upon exercise
                                            of such options, warrants or rights calculated as at the date of issue of such options, warrants
                                            or rights or upon conversion or exchange or exercise of rights of subscription or purchase
                                            in respect thereof at the initial conversion, exchange, subscription or purchase price or
                                            rate.

 

    45 

     

    

 

provided that if,
on the Effective Date, such number of ordinary shares is to be determined by reference to the application of a formula or other variable
feature or the occurrence of any event at some subsequent time, then for the purposes of this ‎Section
4.01(d), “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs
or had occurred as at the Effective Date and as if such conversion, exchange, subscription, purchase or acquisition had taken place on
the Effective Date.

 

Such adjustment
shall become effective on the Effective Date.

 

“Effective
Date” means, in respect of this ‎Section 4.01(d), the first
date on which the ordinary shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

 

For the purpose
of any calculation of the consideration receivable or price pursuant to this ‎Section
4.01(d), the following provisions shall apply:

 

		(i)	the aggregate consideration receivable
                                            or price for ordinary shares issued for cash shall be the amount of such cash;

 

		(ii)	(x) the aggregate consideration receivable
                                            or price for ordinary shares to be issued or otherwise made available upon the conversion
                                            or exchange of any Other Securities shall be deemed to be the consideration or price received
                                            or receivable for any such Other Securities and (y) the aggregate consideration receivable
                                            or price for ordinary shares to be issued or otherwise made available upon the exercise of
                                            rights of subscription attached to any Other Securities or upon the exercise of any options,
                                            warrants or rights shall be deemed to be that part (which may be the whole) of the consideration
                                            or price received or receivable for such Other Securities or, as the case may be, for such
                                            options, warrants or rights which are attributed by the Company to such rights of subscription
                                            or, as the case may be, such options, warrants or rights or, if no part of such consideration
                                            or price is so attributed, the Fair Market Value of such rights of subscription or, as the
                                            case may be, such options, warrants or rights as at the relevant Effective Date, plus in
                                            the case of each of (x) and (y) above, the additional minimum consideration receivable or
                                            price (if any) upon the conversion or exchange of such Other Securities, or upon the exercise
                                            of such rights of subscription attached thereto or, as the case may be, upon exercise of
                                            such options, warrants or rights and (z) the consideration receivable or price per ordinary
                                            share upon the conversion or exchange of, or upon the exercise of such rights of subscription
                                            attached to, such Other Securities or, as the case may be, upon the exercise of such options,
                                            warrants or rights shall be the aggregate consideration or price referred to in (x) or (y)
                                            above (as the case may be) divided by the number of ordinary shares to be issued upon such
                                            conversion or exchange or exercise at the initial conversion, exchange or subscription price
                                            or rate;

 

    46 

     

    

 

		(iii)	if the consideration or price determined
                                            pursuant to (i) or (ii) above (or any component thereof) shall be expressed in a currency
                                            other than the Relevant Currency, it shall be converted into the Relevant Currency at the
                                            Prevailing Rate on the relevant Effective Date;

 

		(iv)	in determining the consideration or
                                            price pursuant to the above, no deduction shall be made for any commissions or fees (howsoever
                                            described) or any expenses paid or incurred for any underwriting, placing or management of
                                            the issue of the relevant ordinary shares or Other Securities or options, warrants or rights,
                                            or otherwise in connection therewith; and

 

		(v)	the consideration or price shall be
                                            determined as provided above on the basis of the consideration or price received, receivable,
                                            paid or payable, regardless of whether all or part thereof is received, receivable, paid
                                            or payable by or to the Company or another entity.

 

(e)           
Notwithstanding provisions of Sections ‎4.01(a) through ‎(d) above:

 

(i)           
where the events or circumstances giving rise to any adjustment to the Conversion Price have already resulted or will result in
an adjustment to the Conversion Price or the events or circumstances giving rise to any adjustment arise by virtue of any other events
or circumstances that have already given or will give rise to an adjustment to the Conversion Price or where more than one event which
gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the opinion of the Company, a
modification to the adjustment provisions is required to give the intended result, such modification shall be made to the operation of
the provisions of ‎Section 4.01(a) to ‎Section 4.01(d) as may be determined in good faith by an Independent
Financial Adviser to be in its opinion appropriate to give the intended result;

 

(ii)           
such modification shall be made to the operation of the provisions of ‎Section 4.01(a) to ‎Section
4.01(d) as may be determined in good faith by an Independent Financial Adviser to be in its opinion appropriate (x) to ensure that an
adjustment to the Conversion Price or the economic effect thereof shall not be taken into account more than once, (y) to ensure that
the economic effect of an Extraordinary Dividend is not taken into account more than once, and (z) to reflect a redenomination of the
issued ordinary shares for the time being into a new currency;

 

    47 

     

    

 

(iii)           
other than provided under paragraphs (i) and (ii) above, if any doubt shall arise as to whether an adjustment falls to be made
to the Conversion Price or as to the appropriate adjustment to the Conversion Price, the Company may at its discretion appoint an Independent
Financial Adviser and, following consultation between the Company and such Independent Financial Adviser, a written opinion of such Independent
Financial Adviser in respect thereof shall be conclusive and binding on the Company, the Holders and the Beneficial Owners, save in the
case of manifest error;

 

(iv)           
no adjustment will be made to the Conversion Price where ordinary shares or Other Securities (including rights, warrants and options)
are issued, offered, exercised, allotted, purchased, appropriated, modified or granted to, or for the benefit of, employees or former
employees (including directors holding or formerly holding executive office or the personal service company of any such person) or their
spouses or relatives, in each case, of the Company or any of its Subsidiaries or any associated company or to a trustee or trustees to
be held for the benefit of any such person, in any such case pursuant to any share or option scheme;

 

(v)           
on any adjustment, if the resultant Conversion Price has more decimal places than the initial Conversion Price, it shall be rounded
to the same number of decimal places as the initial Conversion Price (with 0.005 being rounded down). No adjustment shall be made to
the Conversion Price where such adjustment (rounded down if applicable) would be less than 1% of the Conversion Price then in effect.
Any adjustment not required to be made pursuant to the above, and/or any amount by which the Conversion Price has been rounded down,
shall be carried forward and taken into account in any subsequent adjustment, and such subsequent adjustment shall be made on the basis
that the adjustment not required to be made had been made at the relevant time and/or, as the case may be, that the relevant rounding
down had not been made;

 

(vi)           
notice of any adjustments to the Conversion Price shall be given by the Company to DTC as the Holder of the Global Securities
(or, if the Contingent Capital Notes are in definitive form, via the Trustee) promptly after the determination thereof;

 

(vii)           
any adjustment to the Conversion Price shall be subject to such Conversion Price not being less than the U.S. dollar equivalent
of the nominal amount of an ordinary share at such time (currently £1.00). The Company undertakes that it shall not take any action,
and shall procure that no action is taken, that would otherwise result in an adjustment to the Conversion Price to below such nominal
value then in effect; and

 

(viii)           
references to the Conversion Price shall be deemed to include the Settlement Shares Offer Price. References to the Conversion
Price and ordinary shares shall be deemed to include any New Conversion Price and any Relevant Shares, such that any New Conversion Price
shall be subject to price adjustments upon the occurrence of the events of set forth in Sections ‎4.01(a) through ‎(d)
above, subject to any modifications as an Independent Financial Adviser shall determine to be appropriate.

 

    48 

     

    

 

Section 4.02.     
Takeover Event.

 

(a)           
Within ten (10) days following the occurrence of a Takeover Event, the Company shall give notice thereof to the Holders and Beneficial
Owners by means of a “Takeover Event Notice”, with a copy to the Trustee.

 

(b)           
The Takeover Event Notice shall specify:

 

		(i)	the identity of the Acquirer;

 

		(ii)	whether the Takeover Event is a Qualifying
                                            Takeover Event or a Non-Qualifying Takeover Event;

 

		(iii)	if it is a Qualifying Takeover Event,
                                            the New Conversion Price; and

 

		(iv)	in the case of a Non-Qualifying Takeover
                                            Event, unless the Conversion Date shall have occurred prior to the date of the Non-Qualifying
                                            Takeover Event, that, following such Non-Qualifying Takeover Event, outstanding Contingent
                                            Capital Notes shall not be subject to Automatic Conversion at any time notwithstanding that
                                            a Conversion Trigger Event may have occurred or may occur subsequently but that, instead,
                                            upon any subsequent Conversion Trigger Event (or where the Conversion Date occurs on or after
                                            the date of the Non-Qualifying Takeover Event), the principal amount of each Contingent Capital
                                            Note will be automatically written down to zero, the Contingent Capital Notes will be cancelled,
                                            the Holders and Beneficial Owners will be automatically deemed to have irrevocably waived
                                            their right to receive, and no longer have any rights against the Company with respect to
                                            repayment of the aggregate principal amount of the Contingent Capital Notes so written down
                                            and all Accrued Interest and any other amounts payable on the Contingent Capital Notes shall
                                            be automatically cancelled, irrespective of whether such amounts have become due and payable
                                            prior to the occurrence of the Conversion Trigger Event.

 

(c)           
If a Qualifying Takeover Event occurs, the Contingent Capital Notes shall, where the Conversion Date (if any) falls on or after
the New Conversion Condition Effective Date, be converted on such Conversion Date into Relevant Shares of the Approved Entity, mutatis
mutandis as provided under ‎Section 3.16 above, at a Conversion Price that shall be the New Conversion Price. Such conversion
shall be effected by the delivery by the Company of such number of Settlement Shares as set forth under ‎Section 3.16 above
to, or to the order of, the Approved Entity. Such delivery shall irrevocably discharge and satisfy all of the Company’s obligations
under the Contingent Capital Notes, but shall be without prejudice to the rights of the Trustee and the Holders and Beneficial Owners
against the Approved Entity in connection with its undertaking to deliver Relevant Shares as provided in the definition of “New
Conversion Condition”. Such delivery shall be in consideration of the Approved Entity irrevocably undertaking for the benefit of
the Holders and Beneficial Owners to deliver the Relevant Shares to the Settlement Share Depository. For the avoidance of doubt, the
Company may elect that a Settlement Shares Offer be made by the Settlement Share Depository in respect of the Relevant Shares.

 

    49 

     

    

 

(d)           
The New Conversion Price shall be subject to adjustment in the circumstances provided for under Sections ‎4.01(a) through
‎4.01(d) above (if necessary with such modifications as an Independent Financial Adviser acting in good faith shall determine
to be appropriate), and the Company shall give notice to the Holders of the New Conversion Price and of any such modifications thereafter.

 

(e)           
In the case of a Qualifying Takeover Event:

 

(i)           
the Company shall, on or prior to the New Conversion Condition Effective Date, enter into such agreements and arrangements (including,
without limitation, supplemental indentures to the Indenture and amendments and modifications to the terms and conditions of the Contingent
Capital Notes and the Indenture) as may be required to ensure that, effective upon the New Conversion Condition Effective Date, the Contingent
Capital Notes shall (following the occurrence of a Conversion Trigger Event) be convertible into, or exchangeable for, Relevant Shares
of the Approved Entity, mutatis mutandis in accordance with, and subject to, the provisions of ‎Section 3.16
of this Eighth Supplemental Indenture (as may be supplemented or amended), at the New Conversion Price; and

 

(ii)           
subject as set out above, the Company shall, where the Conversion Date falls on or after the New Conversion Condition Effective
Date, procure (to the extent within its control) the issue and/or delivery of the relevant number of Relevant Shares mutatis mutandis
in the manner provided under ‎Section 3.17 of this Eighth Supplemental Indenture (as may be supplemented or amended).

 

(f)            
Upon a Conversion Trigger Event occurring subsequently to a Non-Qualifying Takeover Event, the Company shall provide a written
notice to DTC as soon as practicable regarding the automatic write-down to zero of the Contingent Capital Notes for purposes of notifying
Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

Section 4.03.     
Agreement with Respect to a Non-Qualifying Takeover Event.

 

(a)           
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner:

 

(i)           
acknowledges and agrees that in the case of a Non-Qualifying Takeover Event, unless the Conversion Date shall have occurred prior
to the date of the Non-Qualifying Takeover Event, following such Non-Qualifying Takeover Event, outstanding Contingent Capital Notes
shall not be subject to Automatic Conversion at any time notwithstanding that a Conversion Trigger Event may have occurred or may occur
subsequently but that, instead, upon any subsequent Conversion Trigger Event (or where the Conversion Date occurs on or after the date
of a Non-Qualifying Takeover Event), the principal amount of each Contingent Capital Note will be automatically written down to zero,
the Contingent Capital Notes will be cancelled, it will be automatically deemed to have irrevocably waived its right to receive, and
no longer have any rights against the Company with respect to repayment of the aggregate principal amount of the Contingent Capital Notes
so written down and all Accrued Interest and any other amounts payable on the Contingent Capital Notes shall be automatically cancelled,
irrespective of whether such amounts have become due and payable prior to the occurrence of the Conversion Trigger Event;

 

    50 

     

    

 

(ii)           
acknowledges and agrees that a write-down of the Contingent Capital Notes upon the occurrence of a Conversion Trigger Event following
a Non-Qualifying Takeover Event with respect to the Contingent Capital Notes shall not give rise to a default for purposes of Section
315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(iii)           
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action taken by the Trustee or which
the Trustee abstains from taking, in either case in connection with the write-down to zero of the Contingent Capital Notes following
the occurrence of a Conversion Trigger Event subsequently to any Non-Qualifying Takeover Event;

 

(iv)           
acknowledges and agrees that, (A) in connection with the write-down to zero of the Contingent Capital Notes following the occurrence
of a Conversion Trigger Event subsequently to any Non-Qualifying Takeover Event, (a) the Trustee shall not be required to take any further
directions from Holders or Beneficial Owners of the Contingent Capital Notes under Section 5.12 of the Contingent Convertible Securities
Indenture and (B) the Indenture shall impose no additional duties upon the Trustee whatsoever in connection with the write-down to zero
of the Contingent Capital Notes following the occurrence of a Conversion Trigger Event subsequently to any Non-Qualifying Takeover Event;

 

(v)           
shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through
which it holds such Contingent Capital Notes to take any and all necessary action, if required, to implement the write-down to zero of
the Contingent Capital Notes, without any further action or direction on the part of such Holders and such Beneficial Owners of the Contingent
Capital Notes or the Trustee;

 

(b)           
A write-down of the Contingent Capital Notes upon the occurrence of a Conversion Trigger Event following a Non-Qualifying Takeover
Event with respect to the Contingent Capital Notes will not constitute an Enforcement Event.

 

    51 

     

    

 

Section 4.04.     
Availability of Ordinary Shares. If and to the extent permitted by the Capital Regulations, from time to time and only
to the extent that such undertaking would not cause a Capital Disqualification Event to occur, the Company shall, notwithstanding any
Settlement Shares Offer, at all times keep available for issue, free from pre-emptive or other preferential rights, sufficient ordinary
shares to enable Automatic Conversion of the Contingent Capital Notes to be satisfied in full.

 

Article
5

Enforcement Events and Remedies

 

With respect to
the Contingent Capital Notes only, ‎Section 5.01 of the Contingent
Convertible Securities Indenture shall be amended and restated in its entirety as follows in ‎Section
5.01 hereof, Section 5.02 of the Contingent Convertible Securities Indenture shall be amended and restated in its entirety as follows
in Sections ‎5.02 and ‎5.03
hereof, Section 5.03(a) of the Contingent Convertible Securities Indenture shall be amended and restated in its entirety as follows in
‎Section 5.04 hereof, Section 5.03(b) of the Contingent Convertible
Securities Indenture shall be amended and restated in its entirety as follows in ‎Section
6.02 hereof, Section 5.13 of the Contingent Convertible Securities Indenture shall be amended and restated in its entirety as follows
in ‎Section 5.05 hereof, and references in the Contingent Convertible
Securities Indenture to such Sections shall be to such Sections as amended and restated in their entirety by this Eighth Supplemental
Indenture. Section 5.07 and Section 5.10 of the Contingent Convertible Securities Indenture shall apply to the Contingent Capital Notes
subject to the limitations on remedies specified in this ‎Article
5.

 

Section 5.01.     
Winding-up or Administration Event. If a Winding-up or Administration Event occurs prior to the occurrence of a Conversion
Trigger Event, subject to the subordination provisions of ‎Article 6, the principal amount of the Contingent Capital Notes
shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders or any other
Person, including the declaration by the Trustee, the Holders or any other Person that the principal amount of the Contingent Capital
Notes will become immediately due and payable.

 

Section 5.02.     
Non-Payment Event. If the Company does not make payment of principal in respect of the Contingent Capital Notes for a period
of fourteen (14) calendar days or more after the date on which such payment is due (a “Non-Payment Event”), then the
Trustee, on behalf of the Holders and Beneficial Owners, may, at its discretion, or shall at the direction of Holders of 25% or more
of the aggregate principal amount of Outstanding Contingent Capital Notes, subject to any applicable laws, institute proceedings for
the winding up of the Company. In the event of a Winding-up or Administration Event or liquidation of the Company, whether or not instituted
by the Trustee, the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the Winding up or Administration
Event of the Company and/or claim in the liquidation of the Company, such claims as set out in ‎Section 6.01 hereof. For the
avoidance of doubt, the Trustee may not declare the principal amount of any outstanding Contingent Capital Notes to be due and payable
and may not pursue any other legal remedy, including a judicial proceeding for the collection of the sums due and unpaid on the Contingent
Capital Notes.

 

    52 

     

    

 

Section 5.03.     
Limited Remedies for Breach of Performance Obligations. In the event of a breach of any term, obligation or condition binding
upon the Company under the Contingent Capital Notes or the Indenture (other than any payment obligation of the Company under or arising
from the Contingent Capital Notes or the Indenture, including payment of any principal or interest, including any damages awarded for
breach of any obligation) (such obligation, a “Performance Obligation”), the Trustee may without further notice
institute such proceedings against the Company as it may deem fit to enforce the Performance Obligation, provided that the Company shall
not by virtue of the institution of any such proceedings be obliged to pay any sum or sums, in cash or otherwise (including damages for
breach of any obligations under the Contingent Capital Notes) earlier than the same would otherwise have been payable under the Contingent
Capital Notes or the Indenture, but excluding any payments made to the Trustee acting on its own account in respect of its costs, expenses,
liabilities or remuneration. For the avoidance of doubt, any breach by the Company of any Performance Obligation shall not confer upon
the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Contingent Capital Notes any claim for damages
and, in the event of such a breach of a Performance Obligation, the sole and exclusive remedy that the Trustee (acting on behalf of the
Holders) and/or the Holders or Beneficial Owners of the Contingent Capital Notes may seek under the Contingent Capital Notes and the
Indenture is specific performance under the laws of the State of New York. By its acquisition of the Contingent Capital Notes, each Holder
and Beneficial Owner of the Contingent Capital Notes acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek,
and shall not direct the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach
by the Company of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or
the Trustee (acting on their behalf) may seek under the Contingent Capital Notes and the Indenture for a breach by the Company of a Performance
Obligation is specific performance under the laws of the State of New York.

 

Section 5.04.     
No Other Remedies and Other Terms.

 

(a)           
Other than the limited remedies specified in this ‎Article 5, and subject to paragraph ‎(c) below, no remedy
against the Company shall be available to the Trustee (acting on behalf of the Holders) or to the Holders and Beneficial Owners, whether
for the recovery of amounts owing in respect of such Contingent Capital Notes or under the Indenture, or in respect of any breach by
the Company of any of the Company’s obligations under or in respect of the terms of such Contingent Capital Notes or under the
Indenture in relation thereto; provided, however, that the Company’s obligations to the Trustee under, and the Trustee’s
lien provided for in, Section 6.07 of the Contingent Convertible Securities Indenture and the Trustee’s rights to have money collected
applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Contingent Convertible Securities Indenture
shall not be limited or impaired by this Article 5 or otherwise and expressly survive any Enforcement Event and are not subject to the
subordination provisions of ‎Section 6.01 of this Eighth Supplemental Indenture.

 

    53 

     

    

 

(b)           
For purposes of the Contingent Convertible Securities Indenture, “Event of Default” shall mean an “Enforcement
Event” as defined in this Eighth Supplemental Indenture, except that the term “Event of Default” as used in Article
8 of the Contingent Convertible Securities Indenture shall mean “Winding-up or Administration Event” and as used in
Article 5.08 of the Contingent Convertible Securities Indenture shall mean “Non-Payment Event”.

 

(c)           
Notwithstanding the limitations on remedies specified in this ‎Article 5, (i) the Trustee shall have such powers as
are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial Owners under
the provisions of the Indenture, and (ii) nothing shall impair the right of a Holder or Beneficial Owner of the Contingent Capital Notes
under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment due but unpaid
with respect to the Contingent Capital Notes as provided for in Section 5.08 of the Contingent Convertible Securities Indenture; provided
that, in the case of (i) and (ii) above, any payments in respect of, or arising from, the Contingent Capital Notes, including any payments
or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the Contingent Capital
Notes, shall be subject to the subordination provisions set forth in ‎Section 6.01 of this Eighth Supplemental Indenture.

 

(d)           
In furtherance of Section 6.01 of the Contingent Convertible Securities Indenture:

 

(i)           
For purposes of Sections 315(a) and 315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean
an Enforcement Event which has occurred and is continuing.

 

(ii)           
Notwithstanding anything contained in the Contingent Convertible Securities Indenture to the contrary, the duties and responsibilities
of the Trustee under this Indenture shall be subject to the protections, exculpations and limitations on liability afforded to an indenture
trustee under the provisions of the Trust Indenture Act.

 

Section 5.05.     
Waiver of Past Defaults.

 

(a)           
Holders of not less than a majority in aggregate principal amount of the Outstanding Contingent Convertible Securities may on
behalf of the Holders of all of the Contingent Capital Notes waive any past Enforcement Event that results from a breach by the Company
of a Performance Obligation. Holders of a majority of the aggregate principal amount of the Outstanding Contingent Capital Notes shall
not be entitled to waive any past Enforcement Event that results from a Winding-up or Administration Event or a Non-Payment Event.

 

(b)           
Upon the occurrence of any waiver permitted by paragraph ‎(a) above, such Enforcement Event shall cease to exist, and
any Enforcement Event with respect to the Contingent Capital Notes arising therefrom shall be deemed to have been cured and not to have
occurred for every purpose of the Contingent Convertible Securities Indenture, but no such waiver shall extend to any subsequent or other
Enforcement Event or impair any right consequent thereon.

 

    54 

     

    

 

Article
6

Subordination

 

Section 6.01.     
Subordination to Claims of Senior Creditors.

 

(a)           
With respect to the Contingent Capital Notes only, and pursuant to Section 12.01(a) of the Contingent Convertible Securities Indenture,
the extent and manner in which the payment of principal of (and premium, if any) and interest, if any, on the Contingent Convertible
Securities is subordinated to the claims of the holders of certain other present or future obligations of the Company shall be determined
as set out in this ‎Section 6.01. References in the Contingent Convertible Securities Indenture to Section 12.01(a) thereof
shall be to ‎Section 6.01 hereof. For the avoidance of doubt, no provision of Article 12 of the Contingent Convertible Securities
Indenture other than replacing Section 12.01(a) with this ‎Section 6.01 shall be amended by this Eighth Supplemental Indenture.

 

(b)           
The Contingent Capital Notes shall constitute the Company’s direct, unsecured and subordinated obligations, ranking pari
passu without any preference among themselves. The rights and claims of the Holders and Beneficial Owners in respect of or arising
from the Contingent Capital Notes (including any damages for breach of obligations thereunder, if payable) shall be subordinated to the
claims of Senior Creditors.

 

(c)           
If a Winding-up or Administration Event occurs before the date on which the Conversion Trigger Event occurs, there shall be payable
by the Company in respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if any, as would
have been payable to a Holder or Beneficial Owner if, on the day prior to the commencement of the Winding-up or Administration Event
and thereafter, such Holder or Beneficial Owner were the holder of one of a class of Notional Preference Shares on the assumption that
the amount that such Holder or Beneficial Owner was entitled to receive in respect of such Notional Preference Shares, on a return of
assets in such Winding-up or Administration Event, was an amount equal to the principal amount of the relevant Contingent Capital Note,
together with any Accrued Interest and any damages for breach of any obligations thereunder (if payable), regardless of whether the Solvency
Condition is satisfied on the date upon which the same would otherwise be due and payable.

 

(d)           
If a Winding-up or Administration Event occurs on or after the date on which the Conversion Trigger Event occurs but the Settlement
Shares to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be
payable by the Company in respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if any,
as would have been payable to the Holder or Beneficial Owner of such Contingent Capital Note in a Winding-up or Administration Event
if the Conversion Date in respect of the Automatic Conversion had occurred immediately before the occurrence of a Winding-up or Administration
Event (and, as a result, such Holder or Beneficial Owner were the holder of such number of the Company’s ordinary shares as such
Holder or Beneficial Owner would have been entitled to receive on the Conversion Date, ignoring for this purpose the Company’s
right to make an election for a Settlement Shares Offer to be effected pursuant to ‎Section 3.18 hereof), regardless of whether
the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable.

 

    55 

     

    

 

(e)           
Other than in the event of a Winding-up or Administration Event of the Company as described in paragraph ‎(c) and ‎(d)
above, or in relation to the Cash Component of any Alternative Consideration in any Settlement Shares Offer, payments in respect of or
arising from the Contingent Capital Notes (including any damages for breach of any obligations thereunder) shall, in addition to the
right of the Company to cancel payments of interest pursuant to ‎Section 3.03 or ‎3.04 hereof, be conditional upon
the Company’s being solvent at the time when the relevant payment is due to be made, and no principal, interest or other amount
shall be due and payable in respect of or arising from the Contingent Capital Notes except to the extent that the Company could make
such payment and still be solvent immediately thereafter (such condition referred to herein as the “Solvency Condition”).
For purposes of determining whether the Solvency Condition is met, the Company shall be considered to be solvent at a particular point
in time if (i) it is able to pay its debts as they fall due and (ii) its Assets are at least equal to its Liabilities. An Officer’s
Certificate (which shall only be required if the Company at the relevant time has not satisfied the Solvency Condition and is relying
on that fact as the basis for not making a payment on the Contingent Capital Notes) as to the Company’s solvency shall, unless
there is manifest error, be treated and accepted by the Company, the Trustee and any Holder as correct and sufficient evidence that the
Solvency Condition is not satisfied. The Trustee shall be entitled to rely absolutely on such certificate without liability to any person
without any obligation to verify or investigate the accuracy thereof. If the Company fails to make a payment because the Solvency Condition
is not satisfied, such payment shall not be or become due and payable and shall be deemed cancelled.

 

Section 6.02.     
No Set-Off. Subject to applicable law, the Trustee (acting on behalf of the Holders) and the Holders of the Contingent
Capital Notes by their acceptance thereof will be deemed to have waived to the fullest extent permitted by law any right of set-off,
counterclaim or combination of accounts with respect to the Contingent Capital Notes, this Eighth Supplemental Indenture or the Contingent
Convertible Securities Indenture (or between the Company’s obligations under or in respect of the Contingent Capital Notes and
any liability owed by a Holder to the Company) that they (or the Trustee acting on their behalf) might otherwise have against the Company,
whether before or during any Winding-up or Administration Event. Notwithstanding the above, if any of such rights and claims of any such
Holder against the Company are discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge
to the Company or, in the event of any Winding-up or Administration Event, the liquidator or administrator (or other relevant insolvency
official), as the case may be, to be held on trust for the Senior Creditors and until such time as payment is made will hold a sum equal
to such amount on trust for the Senior Creditors and accordingly such discharge shall be deemed not to have taken place.

 

    56 

     

    

 

Article
7

Satisfaction and Discharge

 

Section 7.01.     
Satisfaction and Discharge of Indenture. For purposes of the Contingent Capital Notes, ‎Section 4.01 of the
Contingent Convertible Securities Indenture shall be amended and restated in its entirety and shall read as follows:

 

This Indenture shall upon
Company Request cease to be of further effect with respect to the Contingent Capital Notes (except as to any surviving rights of registration
of transfer of the Contingent Capital Notes herein expressly provided for), and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of the Indenture with respect to the Contingent Capital Notes when:

 

(a)           
all Contingent Capital Notes theretofore authenticated and delivered (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 3.06 of the Contingent Convertible Securities Indenture) have been
delivered to the Trustee for cancellation;

 

(b)           
the Company has paid or caused to be paid all other sums payable hereunder (including Accrued Interest, if any) by the Company
with respect to the Contingent Capital Notes; and

 

(c)           
the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of the Indenture with respect to the Contingent Capital Notes
have been complied with.

 

Notwithstanding
any satisfaction and discharge of the Indenture, the obligations of the Company to the Trustee under Section 6.07 of the Contingent Convertible
Securities Indenture, the obligations of the Trustee to any Authenticating Agent under Section 6.14 of the Contingent Convertible Securities
Indenture and the obligations of the Trustee under ‎Section 4.02
of the Contingent Convertible Securities Indenture and the last paragraph of Section 10.03 of the Contingent Convertible Securities Indenture
shall survive such satisfaction and discharge.

 

Article
8

Supplemental Indentures

 

Section 8.01.     
Amendments or Supplements without Consent of Holders. In addition to any permitted amendment or supplement to the Contingent
Convertible Securities Indenture pursuant to ‎Section 9.01 of the Contingent Convertible Securities Indenture, the Company
and the Trustee may amend or supplement the Indenture or the Contingent Capital Notes without notice to or the consent of any Holder
of the Contingent Capital Notes (i) to conform this Eighth Supplemental Indenture and the form or terms of the Contingent Capital Notes
to the section entitled “Description of the Contingent Capital Notes” as set forth in the Prospectus, (ii) to reflect changes
to the procedures set forth in ‎Section 3.16 or ‎Section 3.17 above or (iii) pursuant to ‎Section 3.22(b)(iii).

 

    57 

     

    

 

Section 8.02.     
Amendments or Supplements With Consent of Holders. The Company and the Trustee may amend the Contingent Capital Notes and
the Indenture with respect to the Contingent Capital Notes as provided in ‎Section 9.02 of the Contingent Convertible Securities
Indenture. Notwithstanding the foregoing provision and in addition to the provisions of ‎Section 9.02 of the Contingent Convertible
Securities Indenture, without the consent of each Holder of an outstanding Security affected thereby, no amendment or waiver may make
any change that adversely affects the conversion rights of any of the Contingent Capital Notes. The Trustee shall be obliged to concur
with the Issuer in effecting any variations in the circumstances and as otherwise set out in Section 3.12 or on a Qualifying Takeover
Event without the consent of the Holders.

 

Section 8.03.     
Holders’ Approval of Amendments. The consent of the Holders is not necessary under the Indenture to approve the particular
form of any proposed amendment, supplement or waiver, but it will be sufficient if such consent approves the substance of such proposed
amendment, supplement or waiver. After an amendment, supplement or waiver becomes effective, the Company shall give to the Holders affected
by such amendment, supplement or waiver a notice in accordance with the Indenture briefly describing such amendment, supplement or waiver.
The Company shall mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect
in such notice, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

Section 8.04.     
PRA Consent. No modification shall be effected to this Eighth Supplemental Indenture or in relation to the Contingent Capital
Notes, unless the Company has received any consent (or indication of no objection) from the PRA as may be required under the Capital
Regulations. The Trustee is entitled to request and rely on an Officer’s Certificate as to the satisfaction of this condition precedent
to any modification without further enquiry.

 

Article
9 

 

Amendments
to the Contingent Convertible Securities Indenture applicable to the Contingent Capital Notes only

 

Section 9.01.     
Additional Amounts. With respect to the Contingent Capital Notes only, Section 10.04 of the Contingent Convertible Securities
Indenture is amended and restated in its entirety and shall read as follows:

 

Section
10.04. Additional Amounts. All amounts of principal and interest, if any, on the Contingent Capital Notes will be paid by the
Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on
behalf of the United Kingdom or any political subdivision or any authority thereof or therein having the power to tax (the “Taxing
Jurisdiction”), unless such deduction or withholding is required by law.

 

    58 

     

    

 

If deduction or
withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the
Taxing Jurisdiction, the Company will pay such additional amounts in respect of the payment of any interest on (but not, for the avoidance
of doubt, in respect of the payment of the principal amount of) the Contingent Capital Notes (“Additional Amounts”)
as may be necessary in order that the net amounts in respect of any interest paid to the Holders of the Contingent Capital Notes, after
such deduction or withholding, shall equal the amount of any interest which would have been payable in respect of such Contingent Capital
Notes had no such deduction or withholding been required; provided, however, that the foregoing will not apply to any such
tax, levy, impost, duty, charge, fee, deduction or withholding that would not have been payable or due but for the fact that:

 

(i)           
the Holder or the beneficial owner of the Contingent Capital Note is a domiciliary, national or resident of, or engaging in business
or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the
Taxing Jurisdiction other than the mere holding or ownership of a Contingent Capital Note, or the collection of any payment of (or in
respect of) any interest on the Contingent Capital Notes

 

(ii)           
the Contingent Capital Note is presented (where presentation is required) for payment more than 30 days after the date payment
became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional
Amount on presenting (where presentation is required) the Contingent Capital Note for payment at the close of such 30 day period,

 

(iii)           
the Holder or the beneficial owner of the Contingent Capital Note or the beneficial owner of any payment of (or in respect of)
any interest on such Contingent Capital Note failed to comply with a request of the Company or its liquidator or other authorized Person
addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial
owner or (y) to make any declaration or other similar claim, which in the case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption or relief from all or part of such deduction
or withholding,

 

(iv)           
the withholding or deduction is required to be made pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of
1986, as amended, any agreement with the U.S. Treasury entered into with respect thereto, any U.S. Treasury regulation issued thereunder
or any other official interpretations or guidance issued with respect thereto; any intergovernmental agreement entered into with respect
thereto, or any law, regulation, or other official interpretation or guidance promulgated pursuant to such an intergovernmental agreement,

 

    59 

     

    

 

(v)           
any combination of subclauses (i) through (iv) above,

 

nor shall
Additional Amounts be paid with respect to a payment of any interest on the Contingent Capital Notes to any Holder who is a fiduciary
or partnership or Person other than the sole beneficial owner of such payment to the extent such payment would be required by the laws
of the Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or
a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the Holder.

 

Whenever in this
Eighth Supplemental Indenture there is mentioned, in any context, the payment of any interest on, or in respect of, any Contingent Capital
Notes such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent
that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section
and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express
mention is not made.

 

Article
10

Miscellaneous

 

Section 10.01. 
Effect of Supplemental Indenture. Upon the execution and delivery of this Eighth Supplemental Indenture by each of the
Company and the Trustee, the Contingent Convertible Securities Indenture shall be supplemented and amended in accordance herewith, and
this Eighth Supplemental Indenture shall form a part of the Contingent Convertible Securities Indenture for all purposes in respect of
any Contingent Capital Notes.

 

Section 10.02. 
Other Documents to Be Given to the Trustee. As specified in ‎Section 9.03 of the Contingent Convertible Securities
Indenture and subject to the provisions of Section 6.03 of the Contingent Convertible Securities Indenture, the Trustee shall be entitled
to receive an Officer’s Certificate stating the recitals contained in ‎Section 1.02 of the Contingent Convertible Securities
Indenture have been complied with and an Opinion of Counsel stating that this Eighth Supplemental Indenture is permitted by the Contingent
Convertible Securities Indenture, conforms to the requirements of the Trust Indenture Act, and (subject to ‎Section 1.03 of
the Contingent Convertible Securities Indenture) constitutes valid and binding obligations of the Company enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness
and equitable principles of general applicability. The Trustee shall be entitled to rely on such Officer’s Certificate and Opinion
of Counsel as conclusive evidence that this Eighth Supplemental Indenture complies with the applicable provisions of the Contingent Convertible
Securities Indenture.

 

    60 

     

    

 

Section 10.03. 
Notices to, and Consents Required from, the PRA to Be Given to the Trustee. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon without any investigation, a copy of all notifications provided to, and prior consents required
from, the PRA pursuant to the Indenture.

 

Section 10.04. 
Survival. Anything herein to the contrary notwithstanding, for purposes of the Contingent Capital Notes, Section 6.08 of
the Contingent Convertible Securities Indenture is hereby amended in its entirety as follows: The Trustee’s right to payment of
its fees, reimbursement and indemnity under, and in its lien provided for in, Sections 5.06 and 6.07 of the Contingent Convertible Securities
Indenture shall survive the payment in full of the Contingent Capital Notes, the satisfaction and discharge of the Indenture, the Automatic
Conversion upon a Conversion Trigger Event, the resignation or removal of the Trustee, the termination for any reason of the Indenture
and any exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes.

 

Section 10.05. 
Confirmation of Indenture. The Contingent Convertible Securities Indenture, as supplemented and amended by this Eighth
Supplemental Indenture, is in all respects ratified and confirmed, and the Contingent Convertible Securities Indenture and this Eighth
Supplemental Indenture shall, in respect of any Contingent Capital Notes, be read, taken and construed as one and the same instrument.
This Eighth Supplemental Indenture constitutes an integral part of the Contingent Convertible Securities Indenture with respect to the
Contingent Capital Notes. In the event of a conflict between the terms and conditions of the Contingent Convertible Securities Indenture
and the terms and conditions of this Eighth Supplemental Indenture, the terms and conditions of this Eighth Supplemental Indenture shall
prevail with respect to the Contingent Capital Notes.

 

Section 10.06. 
Concerning the Trustee. The Trustee does not make any representations as to the validity or sufficiency of this Eighth
Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into
this Eighth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Contingent Convertible Securities
Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

Section 10.07. 
Governing Law. This Eighth Supplemental Indenture and the Contingent Capital Notes shall be governed by and construed in
accordance with the laws of the State of New York, except that (i) Sections ‎Section 6.01 and ‎Section 6.02 of
this Eighth Supplemental Indenture (other than the Trustee’s own rights, duties or immunities thereunder) shall be governed by
and construed in accordance with the laws of Scotland and (ii) the authorization and execution by the Company of this Eighth Supplemental
Indenture and the Contingent Capital Notes shall be governed by (in addition to the laws of the State of New York relevant to execution)
the jurisdiction of the Company.

 

Section 10.08. 
Entire Agreement. With respect to Contingent Capital Notes issued pursuant to this Eighth Supplemental Indenture, any agreements,
arrangements or understandings between the Company and any Holder and Beneficial Owner of the Contingent Capital Notes with respect to
the Contingent Capital Notes must be entered into in accordance with the terms of the Indenture.

 

Section 10.09. 
Counterparts. This Eighth Supplemental Indenture may be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute but one and the same instrument.

 

[Signature Pages
Follow]

 

    61 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Eighth Supplemental Indenture to be duly executed as of the date first written above.

 

	 	NATWEST GROUP PLC, as Company
	 	 
	 	By:	/s/ Donal Quaid
	 	 	Name:	Donal Quaid
	 	 	Title:	NatWest Group Treasurer

 

 

	 	THE BANK OF NEW YORK MELLON, acting through its London Branch

    as Trustee
	 	 
	 	By:	/s/ Michael Lee
	 	 	Name:	Michael Lee
	 	 	Title:	Authorized Signatory

 

 

 

 

 

 

 

 

 

 

[Signature Page
to Eighth Supplemental Indenture]

 

     

     

    

 

EXHIBIT A

 

FORM OF GLOBAL
NOTE

 

THIS SECURITY IS
A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY
IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

THE RIGHTS OF THE
HOLDER OF THIS SECURITY ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED TO THE CLAIMS
OF OTHER CREDITORS OF THE COMPANY, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 12.01, AND THE HOLDER OF THIS
SECURITY, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 12.01 OF THE INDENTURE AND
THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF SCOTLAND.

 

This Security is
one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Securities” and
each, a “Security”) issued and to be issued in one or more series under and governed by the Contingent Convertible
Securities Indenture, dated as of August 10, 2015, as amended and supplemented by the Fifth Supplemental Indenture dated as of August
19, 2020 (the “Contingent Convertible Securities Indenture”), as supplemented by the Eighth Supplemental Indenture,
dated as of [●], 2021 (the “Eighth Supplemental Indenture” and, together with the Contingent Convertible Securities
Indenture, the “Indenture”). Capitalized terms used herein but not otherwise defined shall have the meaning ascribed
to them in the Eighth Supplemental Indenture.

 

The rights of the
Holder and Beneficial Owners of this Security are, to the extent and in the manner set forth in Section 6.01 of the Eighth Supplemental
Indenture (which amends in its entirety Section 12.01(a) of the Contingent Convertible Securities Indenture), subordinated to the claims
of other creditors of the Company, and this Security is issued subject to the provisions of that Section 6.01, and the Holder (and Beneficial
Owners) of this Security, by accepting the same, agrees to, and shall be bound by, such provisions. The provisions of Sections 6.01 and
6.02 of the Eighth Supplemental Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with,
Scots law.

 

    1 

     

    

 

The rights of the
Holder of this Security are subject to ‎Section 3.16 of the Eighth
Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and
delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with this Security or the
Eighth Supplemental Indenture), Holders and Beneficial Owners shall not have any rights against the Company with respect to repayment
of the principal amount of this Security or payment of interest or any other amount on or in respect of this Security, which liabilities
of the Company shall be irrevocably and automatically released, and accordingly the principal amount of this Security shall equal zero
at all times thereafter.

 

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Contingent Capital
Notes, by its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner of the Contingent Capital Notes, acknowledges,
accepts, agrees to be bound by and consents to the exercise of any U.K. bail- in power by the relevant U.K. authority that may result
in the (i) reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Contingent Convertible Securities,
(ii) the conversion of all, or a portion of, the principal amount of, or interest on, the Contingent Convertible Securities into ordinary
shares or other securities or other obligations of the Company or another person and/or (iii) the amendment of the amount of interest
due on the Contingent Capital Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary
period; which U.K. bail-in power may be exercised by means of variation to the terms of the Contingent Convertible Securities, solely
to give effect to the above. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of
principal and interest that have become due and payable, but which have not been paid, prior to the exercise of any U.K. bail-in power.
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner further acknowledges and agrees that the rights
of the Holders and/or Beneficial Owners under the Contingent Capital Notes are subject to, and will be varied, if necessary, solely to
give effect to, the exercise of any U.K. bail-in power by the relevant U.K. authority.

 

NATWEST
GROUP PLC

$[ ] []% Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes

 

	No. [    ]	$[                  ]

 

CUSIP NO. [             
]

ISIN NO. [              ]

 

NATWEST GROUP plc
(herein called the “Company”, which term includes any successor Person under the Indenture (as defined on the reverse
hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assignees, the principal sum of $[●] ([●]
Dollars), if and to the extent due, and to pay interest thereon, if any, in accordance with the terms hereof and the Indenture. The Contingent
Capital Notes shall have no fixed maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) [●],
20[●] (the “First Reset Date”), the interest rate on the Contingent Capital Notes shall be [●]% per annum.
From and including the First Reset Date and each fifth anniversary date thereafter (each such date, a “Reset Date”),
to (but excluding) the

 

    2 

     

    

 

next
succeeding Reset Date, the applicable per annum rate shall be equal to the sum of the applicable U.S. Treasury Rate, as determined by
National Westminster Bank Plc (the “Calculation Agent”),
on the Reset Determination Date and [●]% converted to a quarterly rate in accordance with market convention (rounded to three decimal
places, with 0.005 being rounded). Subject to the provisions on the reverse of this Security relating to cancellation and deemed cancellation
of interest and to ‎Section 3.03, ‎Section
3.04, ‎Section 3.16(h) and ‎Section
6.01 of the Eighth Supplemental Indenture and to the two last sentences of this paragraph, interest, if any, shall be payable in four
equal quarterly installments in arrear on [●], [●], [●] and [●] of each year (each, an “Interest Payment
Date”). The first date on which interest may be paid will be [●], 2021. Subject to the limitations specified on the reverse
of this Security, if any interest payment is to be made in respect of the Contingent Capital Notes on any other date, including on any
scheduled redemption date, it shall be calculated by the Calculation Agent by applying the interest rate as described above and multiplying
the product by 30/360 and rounding the resulting figure to the nearest cent (half a cent being rounded upwards). For this purpose “30/360”
means, in respect of any period, the number of days in the relevant period, from and including the first day in such period to but excluding
the last day in such period, such number of days being calculated on the basis of a 360 day year consisting of 12 months of 30 days each,
divided by 360.

 

“U.S. Treasury
Rate” means, with respect to any Reset Date from which such rate applies, the rate per annum equal to: (1) the average of the
yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days
immediately prior to the Reset Determination Date for such Reset Date and appearing under the caption “Treasury constant maturities”
at 5:00 p.m. (New York City time) on the Reset Determination Date for such Reset Date in the applicable most recently published statistical
release designated “H.15 Daily Update”, or any successor publication that is published by the Board of Governors of the Federal
Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury
Constant Maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published during
the week immediately prior to the Reset Determination Date for such Reset Date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Reset Date.

 

The U.S. Treasury
Rate shall be determined by the Calculation Agent.

 

If the U.S. Treasury
Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the
rate in percentage per annum as notified by the Calculation Agent to the Company equal to the yield on U.S. Treasury securities having
a maturity of five years as set forth in the most recently published statistical release designated “H.15 Daily Update” under
the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors
of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under
the caption “Treasury constant maturities” for the maturity of five years) at 5:00 p.m. (New York City time) on the Reset
Determination Date on which such rate was set forth in such release (or any successor release).

 

    3 

     

    

 

“Comparable
Treasury Issue” means, with respect to any Reset Period, the U.S. Treasury security or securities selected by the Company with
a maturity date on or about the last day of such Reset Period and that would be utilised, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity
of five years.

 

“Comparable
Treasury Price” means, with respect to any Reset Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations
for such Reset Date (calculated on the Reset Determination Date preceding such Reset Date), after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received, the arithmetic
average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received, then such Reference
Treasury Dealer Quotation as quoted in writing to the Calculation Agent by a Reference Treasury Dealer.

 

“Reference
Treasury Dealer” means each of up to five banks selected by the Company (following, where practicable, consultation with the
Calculation Agent), or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors,
or (ii) market makers in pricing corporate bond issues denominated in U.S. dollars.

 

“Reference
Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Reset Date, the arithmetic average,
as determined by the Calculation Agent, of the bid and offered prices for the applicable Comparable Treasury Issue, expressed in each
case as a percentage of its principal amount, at 11:00 a.m. (New York City time), on the Reset Determination Date for such Reset Date.

 

The “Reset
Determination Date” shall be the second Business Day immediately preceding each Reset Date.

 

“Reset
Period” means any period from and including each Reset Date to but excluding the next succeeding Reset Date.

 

If any Interest
Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or
other payment shall be owed or made in respect of such delay.

 

If any scheduled
redemption date is not a Business Day, payment of interest, if any, and principal shall be postponed to the next Business Day, but interest
on that payment will not accrue during the period from and after any scheduled redemption date. If any Reset Date is not a Business Day,
the Reset Date shall occur on the next succeeding Business Day.

 

    4 

     

    

 

The interest, if
any, so payable, and paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security is registered at the close of business on the Regular Record Date for such interest which shall be the 15th
calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.

 

In addition to any
other restrictions on payments of principal and interest contained in the Eighth Supplemental Indenture, no payment of the principal
amount of this Security following any proposed redemption or payment of interest on this Security shall become due and payable after
the exercise of any U.K. bail-in power by the relevant U.K. authority unless, at the time that such repayment or payment, respectively,
is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of
the United Kingdom and the European Union applicable to the Company and the Group.

 

Interest on the
Contingent Capital Notes shall be due and payable only at the full discretion of the Company, and the Company shall have sole and absolute
discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any
Interest Payment Date. If the Company elects not to make an interest payment in respect of the Contingent Capital Notes on the relevant
Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment), such non-payment
shall evidence the Company’s exercise of its discretion to cancel such interest payment (or the portion of such interest payment
not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be or become due and payable.

 

Any interest cancelled
or deemed cancelled (in each case, in whole or in part) pursuant to this Security shall not be due and shall not accumulate or be payable
at any time thereafter, and Holders and Beneficial Owners of the Contingent Capital Notes shall have no right to or claim against the
Company with respect to such interest amount. In addition, any such cancellation or deemed cancellation shall not constitute a default
under this Security and Holders and Beneficial Owners of this Security shall have no rights thereto or to receive any additional interest
or compensation as a result of such cancellation or deemed cancellation.

 

Without limitation
on the foregoing paragraph, the Company shall cancel any interest in respect of the Contingent Capital Notes (or, as appropriate, any
part thereof) on any Interest Payment Date (and such interest payment shall therefore be deemed to have been cancelled and thus shall
not be due and payable on such Interest Payment Date) if in respect of such Interest Payment Date (a) the Company has an amount of Distributable
Items on such scheduled Interest Payment Date that is less than the sum of (i) all payments (other than redemption payments which do
not reduce Distributable Items) made or declared by the Company since the end of the Company’s latest financial year and prior
to such Interest Payment Date on or in respect of any Parity Securities, the Contingent Capital Notes and any Junior Securities and (ii)
all payments (other than redemption payments which do not reduce Distributable Items) payable by the Company on such Interest Payment
Date (x) on the Contingent Capital Notes and (y) on or in respect of any Parity Securities or any Junior Securities, in the case of each
of (i) and (ii), excluding any payments already accounted for in determining the Distributable Items, or (b) if the Solvency Condition
is not (or would not be) satisfied in respect of such amounts payable on such Interest Payment Date.

 

    5 

     

    

 

By its acquisition
of the Contingent Capital Notes, each Holder and each Beneficial Owner shall be deemed to have contracted and agreed that (i) interest
is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect of the relevant
interest period to the extent that it has been (x) cancelled (in whole or in part) by the Company at the Company’s sole discretion
and/or (y) deemed cancelled pursuant to ‎Section 3.04(a) of the Eighth
Supplemental Indenture, and (ii) a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance
with the terms of the Indenture and the Contingent Capital Notes shall not constitute a default in payment or otherwise under the terms
of the Contingent Capital Notes or the Indenture.

 

Interest on the
Contingent Capital Notes shall only be due and payable on an Interest Payment Date to the extent it is not cancelled or deemed cancelled
under the terms of this Security and Sections 3.02(b), 3.03(a), 3.04, 3.16(h) and Section 6.01 of the Eighth Supplemental Indenture.
Any interest cancelled or deemed cancelled (in each case, in whole or in part) in the circumstances described in this Security shall
not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Contingent Capital
Notes shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation
of interest in respect of the Contingent Capital Notes. The Company may use such cancelled payment without restriction to meet its obligations
as they fall due.

 

Payments of principal
of and interest, if any, on the Contingent Capital Notes shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts and such payments on Contingent Convertible Securities represented
by a Global Note shall be made through one or more Paying Agents appointed under the Contingent Convertible Securities Indenture to DTC
or its nominee, as the Holder of this Security. Initially, the Paying Agent and the Security Registrar for the Contingent Capital Notes
shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may change the Paying
Agent or the Security Registrar without prior notice to the Holders of the Contingent Capital Notes, and in such an event the Company
may act as Paying Agent or Security Registrar. Payments of principal of and interest on the Contingent Capital Notes shall be made by
wire transfer of immediately available funds; provided, however, that in the case of payments of principal, this Security
is first surrendered to the Paying Agent.

 

This Security shall
be governed by and construed in accordance with the laws of the State of New York, irrespective of conflicts of laws principles, except
as stated in Section 10.07 of the Eighth Supplemental Indenture and as stated herein, and except that the authorization and execution
of this Security shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions
of the Company and the Trustee, as the case may be.

 

    6 

     

    

 

Reference is hereby
made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.

 

All terms used in
this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

THIS SECURITY IS
NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OF THE UNITED
STATES OR THE UNITED KINGDOM.

 

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent,
by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

 

 

 

[The
rest of this page is intentionally left blank.]

 

    7 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this instrument to be duly executed.

 

Date: [ ]

 

	 	NATWEST GROUP PLC
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

    8 

     

    

Trustee’s
Certificate of Authentication

 

This is one of the
Contingent Capital Notes of the series designated herein referred to in the Indenture.

 

Date: [ ]

 

	 	THE BANK OF NEW YORK MELLON, acting through its London Branch,

    as Trustee
	 	 
	 	By:	 
	 	 	Authorized Signatory

    9 

     

    

 

(Reverse of Security)

 

This Security is
one of a duly authorized issue of securities of the Company (herein called the “Securities” and each, a “Security”)
issued and to be issued in one or more series under and governed by the Contingent Convertible Securities Indenture, dated as of August
10, 2015 (herein called the “Contingent Convertible Securities Indenture”), between the Company and The Bank of New
York Mellon, London Branch, as Trustee (herein called the “Trustee,” which term includes any successor trustee under
the Contingent Convertible Securities Indenture), as supplemented and amended by the Eighth Supplemental Indenture, dated as of [●],
2021 (the “Eighth Supplemental Indenture” and, together with the Contingent Convertible Securities Indenture, the
“Indenture”), and reference is hereby made to the Indenture, the terms of which are incorporated herein by reference,
for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders
of the Contingent Capital Notes and of the terms upon which the Contingent Capital Notes are, and are to be, authenticated and delivered.
Insofar as the provisions of the Indenture may conflict with the provisions set forth in this Security, the former shall control for
purposes of this Security.

 

This Security is
one of the series designated on the face hereof, limited to a principal amount of $[aggregate principal amount of series of Contingent
Capital Notes], which amount may be increased at the option of the Company if in the future it determines that it may wish to sell
additional Securities of this series. References herein to “this series” mean the series designated on the face hereof.

 

All payments of
principal and/or interest to the Holders by or on behalf of the Company in respect of the Contingent Capital Notes shall be made without
withholding or deduction for or on account of any present or future tax, duty, assessment or governmental charge of whatsoever nature
imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any authority thereof or therein having power
to tax, unless such withholding or deduction is required by law. In that event, and in respect of withholding or deduction imposed by
a Taxing Jurisdiction in respect of interest only (and not, for the avoidance of doubt, principal), the Company shall pay such additional
amounts (“Additional Amounts”) as will result (after such withholding or deduction) in receipt by the Holders of the
sums which would have been receivable (in the absence of such withholding or deduction) from it in respect of their Contingent Capital
Notes; except that no such Additional Amounts shall be payable with respect to any Contingent Capital Note in accordance with Section
10.04 of the Contingent Convertible Securities Indenture (as amended and restated with respect to the Contingent Capital Notes only by
Section 9.01 of the Eighth Supplemental Indenture).

 

    10 

     

    

 

Payments under the
Contingent Capital Notes will be subject in all cases to any applicable fiscal or other laws and regulations in the place of payment
or other laws and regulations to which the Company or its Paying Agents agree to be subject and the Company will not, save as provided
under Section 10.04 of the Contingent Convertible Securities Indenture (as amended and restated with respect to the Contingent Capital
Notes only by Section 9.01 of the Eighth Supplemental Indenture), be liable for any taxes or duties of whatever nature imposed or levied
by such laws, regulations or agreements. No commission or expenses shall be charged to the Holders in respect of such payments.

 

Subject to the Solvency
Condition and the pre-conditions specified below, the Company may, at the Company’s option and in its sole discretion, redeem the
Contingent Capital Notes, in whole but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal
to 100% of the principal amount of the Contingent Capital Notes then outstanding, together with any Accrued Interest to (but excluding)
the date fixed for redemption.

 

Subject to the Solvency
Condition and the pre-conditions specified below, the Company may, at the Company’s option and in its sole discretion at any time,
redeem the Contingent Capital Notes, in whole but not in part at a redemption price equal to 100% of the principal amount of the Contingent
Capital Notes then outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time the
Company determines that as a result of any amendment to, or change in the regulatory classification of the Contingent Capital Notes under
the Capital Regulations (or official interpretation thereof), in any such case becoming effective on or after the Issue Date, the whole
or part of the Contingent Capital Notes are, or are likely to be, excluded from the Tier 1 Capital (as defined in the Capital Regulations)
of the Company and/or the Regulatory Group (a “Capital Disqualification Event”).

 

Subject to the Solvency
Condition and the pre-conditions specified below, on the occurrence of a Tax Event, the Company may, at the Company’s option and
in its sole discretion, at any time redeem all, but not some only, of the Contingent Capital Notes at 100% of their principal amount
together with any Accrued Interest to (but excluding) the date of redemption. A “Tax Event” will be deemed to have
occurred with respect to the Contingent Capital Notes if, at any time, the Company determines that, as a result of any change in, or
amendment to, the laws or regulations of the U.K. or any political subdivision or any authority thereof or therein having power to tax
(including any treaty to which the U.K. or any political subdivision or any authority thereof or therein is a party), or any change in
the official application of such laws or regulations (including a decision of any court or tribunal or the application by any tax authority),
which change or amendment becomes effective or applicable, or, in the case of a change in or amendment to law, where such change or amendment
is enacted by a U.K. Act of Parliament or by a Statutory Instrument, if such U.K. Act of Parliament or Statutory Instrument is enacted
on or after the Issue Date:

 

		(a)	in making a payment under the Contingent
                                            Capital Notes in respect of interest, the Company has or will or would on the next Interest
                                            Payment Date become obligated to pay Additional Amounts;

 

		(b)	a payment of interest on the next
                                            Interest Payment Date in respect of any of the Contingent Capital Notes would be treated
                                            as a “distribution” within the meaning of Section 1000 of the U.K. Corporation
                                            Tax Act 2010 (or any statutory modification or re-enactment thereof for the time being);

 

    11 

     

    

 

		(c)	the Company would not be entitled
                                            to claim a deduction in respect of a payment of interest payable on the next Interest Payment
                                            Date in computing its U.K. taxation liabilities (or the value of such deduction to the Company
                                            would be materially reduced);

 

		(d)	as a result of the Contingent Capital
                                            Notes being in issue, the Company would not be able to have losses or deductions (including
                                            in respect of a payment of interest on the Contingent Capital Notes) set against the profits
                                            or gains, or profits or gains offset by losses or deductions, of companies with which it
                                            is or would otherwise be grouped for applicable U.K. tax purposes (whether under the group
                                            relief system current as at the date of issue of the Contingent Capital Notes or any similar
                                            system or systems having like effect as may exist from time to time);

 

		(e)	a future write-down of the principal
                                            amount of the Contingent Capital Notes or conversion of the Contingent Capital Notes into
                                            ordinary shares would result in a U.K. tax liability, or income, profit or gain being treated
                                            for U.K. tax purposes as accruing, arising or being received;

 

		(f)	the Contingent Capital Notes would
                                            no longer be treated as loan relationships for U.K. tax purposes; or

 

		(g)	the Contingent Capital Notes or any
                                            part thereof would be treated as a derivative or an embedded derivative for U.K. tax purposes,

 

in each case, the effect of which cannot
be avoided by the Company taking reasonable steps available to it.

 

In any case where
the Company shall determine that as a result of a Tax Event, it is entitled to redeem the Contingent Capital Notes, it shall be required
to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel
of recognized standing (selected by the Company), in a form satisfactory to the Trustee confirming that the Tax Event has occurred.

 

Any interest payments
that have been cancelled or deemed cancelled pursuant to the terms of this Security and the Indenture shall not be payable if the Contingent
Capital Notes are redeemed pursuant to any of the preceding paragraphs.

 

Before the Company
may redeem the Contingent Capital Notes pursuant to any of the preceding paragraphs relating to the Company’s rights of redemption,
the Company shall deliver to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form,
to the Holders directly at their addresses shown on the Contingent Convertible Security Register) prior notice of not less than fifteen
(15) days, nor more than thirty (30) days. The Company shall deliver written notice of such redemption of the Contingent Capital Notes
to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to the Holders (unless
a shorter notice period shall be satisfactory to the Trustee).

 

    12 

     

    

 

Such notice shall
specify the Company’s election to redeem the Contingent Capital Notes and the date fixed for such redemption and shall be irrevocable
except in the limited circumstances described below.

 

Any notice of redemption
shall state (i) the redemption date, (ii) that on the redemption date the redemption price will, subject to the satisfaction of the conditions
set forth in the Indenture, become due and payable upon each Contingent Capital Note being redeemed and that, subject to certain exceptions,
interest will cease to accrue on or after that date, (iii) the place or places where the Contingent Capital Notes are to be surrendered
for payment of the redemption price, and (iv) the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Contingent
Capital Notes being redeemed.

 

If the Company has
delivered a notice of redemption, but the Solvency Condition is not satisfied immediately prior to, and immediately following, the date
specified for redemption in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect,
and no payment in respect of the redemption amount shall be due and payable.

 

If the Company has
delivered a notice of redemption, but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger
Notice has been delivered, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment
in respect of the redemption amount shall be due and payable.

 

If the Company has
delivered a notice of redemption, but prior to the date of any such redemption the Company has not given notice to the PRA and/or the
PRA has objected to or refused to grant permission to the Company, as applicable, to redeem the relevant Contingent Capital Notes (in
each case to the extent, and in the manner, required by the relevant Capital Regulations), such notice of redemption shall be automatically
rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

If the Company has
delivered a notice of redemption but in respect of any redemption proposed to be made prior to
the fifth anniversary of the Issue Date, if and to the extent then required under the Capital Regulations (A) in the case of redemption
following the occurrence of a Tax Event, the Company has not demonstrated to the satisfaction of the PRA that the Tax Event is material
and was not reasonably foreseeable as at the Issue Date, or (B) in the case of redemption following the occurrence of a Capital Disqualification
Event, the PRA does not consider such change to be sufficiently certain or the Company has not demonstrated to the satisfaction of the
PRA that the relevant change was not reasonably foreseeable as at the Issue Date; such notice of redemption shall be automatically
rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

    13 

     

    

 

If the Company has
delivered a notice of redemption but prior to the payment of the redemption amount with respect to such redemption the Company is not
in compliance with any alternative or additional pre-conditions required by the PRA as a prerequisite to its permission for such redemption,
such notice of redemption shall be automatically rescinded and shall be of no force and effect, and no payment in respect of the redemption
amount shall be due and payable.

 

If any of the events
specified in each of the preceding five paragraphs occurs, the Company shall promptly deliver notice to DTC as the Holder of the Global
Securities (or, if the Contingent Capital Notes are definitive Securities, to the Holders directly at their addresses shown on the Contingent
Convertible Security Register) and to the Trustee directly, specifying the occurrence of the relevant event.

 

Subject to the Solvency
Condition and the pre-conditions specified below, the Company may at any time and from time to time, and to the extent not prohibited
by CRD, repurchase beneficially or procure others to repurchase beneficially for its account the Contingent Capital Notes in the open
market, by tender or by private agreement, in any manner and at any price or at differing prices. Contingent Capital Notes purchased
or otherwise acquired by the Company may be (i) held, (ii) resold or (iii) at the Company’s sole discretion, surrendered to the
Trustee for cancellation (in which case all Contingent Capital Notes so surrendered will forthwith be cancelled in accordance with applicable
law and thereafter may not be reissued or resold).

 

Any redemption,
repurchase, substitution or variation of the Contingent Capital Notes by the Company as provided under ‎‎Section
3.08, ‎‎Section 3.09, ‎‎Section
3.10, ‎Section 3.11, Section 3.12 and ‎‎Section
3.14 of the Eighth Supplemental Indenture, is subject to (except to the extent the Capital Regulations no longer so require) the Company
having met the following conditions:

 

(a)           
the Company has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period, as the
PRA may then require or accept) before the Company becomes committed to the proposed redemption or repurchase;

 

(b)           
the PRA has granted permission for the Company to make any such redemption or repurchase of the Contingent Capital Notes upon
a satisfactory finding that either:

 

(i)           
on or before such redemption or repurchase of any of the Contingent Capital Notes, the Company replaces such Contingent Capital
Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher quality on terms that are sustainable
for its income capacity; or

 

(ii)           
the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the Capital
Regulations) would, following such redemption or repurchase, exceed the capital ratios required under CRD and the combined buffer requirement
defined in CRD by a margin that the PRA may consider necessary on the basis set out in CRD for it to determine the appropriate level
of capital of an institution;

 

    14 

     

    

 

(c)           
no Conversion Trigger Notice has been delivered; and

 

(d)           
the Company has complied with any alternative or additional pre-conditions as set out in the Capital Regulations and/or required
by the PRA as a prerequisite to its permission for such redemptions or repurchases, at that time; and

 

(e)           
with respect to Sections 3.09 and 3.10 of the Eighth Supplemental Indenture only, and except to the extent that the PRA no longer
so requires, the Company may only redeem the Contingent Capital Notes before five years after the Issue Date if, in addition to the conditions
set out in (a), (b), (c) and (d) above, the following conditions are met:

 

(i)           
in the case of a redemption due to a Tax Event pursuant to Section 3.09 of the Eighth Supplemental Indenture, the Company demonstrates
to the satisfaction of the PRA that the Tax Event relating to the Contingent Capital Notes is material and was not reasonably foreseeable
at the time of issuance of the Contingent Capital Notes; or

 

(ii)          
in the case of a redemption due to the occurrence of a Capital Disqualification Event pursuant to Section 3.10 of the Eighth Supplemental
Indenture, (x) the PRA considers such change to be sufficiently certain and (y) the Company demonstrates to the satisfaction of the PRA
that the Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Contingent Capital Notes.

 

If a Conversion
Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations
under the Contingent Capital Notes shall be irrevocably and automatically released in consideration of the Company’s issuance and
delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Contingent Capital Notes shall
equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged as a result of the Automatic
Conversion). Under no circumstances shall such released obligations be reinstated. If the Company has been unable to appoint a Settlement
Share Depository, it shall effect, by means it deems reasonable in the circumstances (including, without limitation, issuance of the
Settlement Shares to another independent nominee or to the Holders of the Contingent Capital Notes directly), the issuance and delivery
of the Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, to the Holders of the Contingent
Capital Notes, and such issuance and delivery shall irrevocably and automatically release all of the Company’s obligations under
the Contingent Capital Notes as if the Settlement Shares had been issued and delivered to the Settlement Share Depository and, in which
case, where the context so admits, references in the Eighth Supplemental Indenture and in this Security to the issue and delivery of
Settlement Shares to the Settlement Share Depository shall be construed accordingly and apply mutatis mutandis.

 

    15 

     

    

 

The procedures set
forth in this Security and Section 3.16 of the Eighth Supplemental Indenture are subject to change to reflect changes in DTC practices,
and the Company may make changes to the procedures set forth in Section 3.16 to the extent reasonably necessary, in the opinion of the
Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of Section 8.01 of the Eighth
Supplemental Indenture.

 

Notwithstanding
anything to the contrary contained in the Indenture or this Security, once the Company has delivered a Conversion Trigger Notice following
the occurrence of a Conversion Trigger Event, (i) subject to the right of the Holders and Beneficial Owners pursuant to ‎Section
5.03 in the event of a failure by the Company to issue and deliver any Settlement Shares to the Settlement Share Depository on the Conversion
Date, the Indenture shall impose no duties upon the Trustee whatsoever with regard to an Automatic Conversion upon a Conversion Trigger
Event and the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Contingent Capital Notes to instruct
the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice, except for any indemnity and/or
security provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any direction previously given
to the Trustee by any Holder or by any Beneficial Owner shall cease automatically and shall be null and void and of no further effect;
except in each case of (i) and (ii) of this paragraph, with respect to any rights of the Holders or Beneficial Owners with respect to
any payments under the Contingent Capital Notes that were unconditionally due and payable prior to the date of the Conversion Trigger
Notice or unless the Trustee is instructed in writing by the Company to act otherwise.

 

All authority conferred
or agreed to be conferred by each Holder and Beneficial Owner pursuant to this Security, including the consents given by such Holder
and Beneficial Owner, shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of such Holder and Beneficial Owner.

 

The Trustee shall
not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence of a Conversion Trigger
Event and the timing of such Conversion Trigger Event, (ii) the failure of the Company to post or deliver the underlying CET1 Ratio calculations
of a Conversion Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver
a Conversion Trigger Notice or the related Automatic Conversion, (iv) the adequacy of the disclosure of these provisions in the Prospectus
or any other offering material in respect of the Contingent Capital Notes or for the direct or indirect consequences thereof, or (v)
any other requirement of the Company contained herein related to a Conversion Trigger Event or the Automatic Conversion.

 

Following the issuance
and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance with the terms of
the Contingent Capital Notes, as applicable) on the Conversion Date, this Contingent Capital Note shall remain in existence until the
applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right to receive Settlement
Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as the case may be, from the Settlement Share Depository (or
such other relevant recipient, as applicable).

 

    16 

     

    

 

The Holders and
the Beneficial Owners shall not at any time have the option to convert the Contingent Capital Notes into Settlement Shares.

 

The occurrence of
the Automatic Conversion shall not constitute an Enforcement Event.

 

Notwithstanding
any other provision herein, by its acquisition of the Contingent Capital Notes, each Holder and each Beneficial Owner shall be deemed
to have (i) agreed to all of the terms and conditions of the Contingent Capital Notes, including, without limitation, to those related
to (x) Automatic Conversion of its Contingent Capital Notes following the Conversion Trigger Event and (y) the appointment of the Settlement
Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance
with the terms of the Eighth Supplemental Indenture or the Contingent Capital Notes) and the potential sale of the Settlement Shares
pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur without any further action on the part
of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and following, the occurrence of the Automatic
Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Contingent Capital Notes and the liability
of the Company to pay any such amounts (including the principal amount of, or any interest in respect of, the Contingent Capital Notes)
shall be automatically released, and the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee
with respect to the Conversion Trigger Event and any related Automatic Conversion, (iii) waived, to the extent permitted by the Trust
Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties,
powers and rights in respect of, the Indenture and in connection with the Contingent Capital Notes, including, without limitation, claims
related to or arising out of or in connection with the Conversion Trigger Event and/or any Automatic Conversion, and (iv) authorized,
directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Contingent Capital Notes
to take any and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the
part of such Holder or Beneficial Owner or the Trustee.

 

The Conversion Price
shall be subject to adjustment as provided in Article 4 of the Eighth Supplemental Indenture.

 

In the Company’s
sole and absolute discretion, within ten (10) Business Days following the Conversion Date, the Company may elect that the Settlement
Share Depository (or an agent on its behalf) make an offer of all or some of the Settlement Shares to all or some of the Company’s
Shareholders upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion
Price (translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in its sole discretion)
(the “Settlement Shares Offer”).

 

    17 

     

    

 

If the Company elects,
in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, each Holder or Beneficial
Owner, by its acquisition of the Contingent Capital Notes, shall be deemed to have: (i) irrevocably consented to any Settlement Shares
Offer and, notwithstanding that such Settlement Shares are held by the Settlement Share Depository on behalf of the Holders and Beneficial
Owners, to the Settlement Share Depository’s using the Settlement Shares delivered to it to settle any Settlement Shares Offer
in accordance with the terms of the Contingent Capital Notes, (ii) irrevocably consented to the transfer of the beneficial interest it
holds in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one or more purchasers identified
by the Settlement Share Depository in connection with the Settlement Shares Offer in accordance with the terms of the Contingent Capital
Notes, (iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary to conduct
the Settlement Shares Offer in accordance with the terms of the Contingent Capital Notes, and (iv) irrevocably agreed that none of the
Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur any liability to the
Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the Settlement Share Depository
in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery of, any Alternative Consideration).

 

Following the occurrence
of a Conversion Trigger Event, subsequent to a Takeover Event having occurred, the Contingent Convertible Notes will be subject to conversion
into Relevant Shares of the Approved Entity in the case of a Qualifying Takeover Event, or write-down to zero in the case of a Non-Qualifying
Takeover Event, as provided in ‎Section 4.03 of the Eighth Supplemental
Indenture.

 

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Contingent Capital
Notes, by its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner acknowledges, accepts, agrees to be bound
by and consents to the exercise of any U.K. bail-in power by the relevant U.K. authority that may result in (i) the reduction or cancellation
of all, or a portion, of the principal amount of, or interest on, the Contingent Capital Notes, (ii) the conversion of all, or a portion
of, the principal amount of, or interest on, the Contingent Capital Notes into ordinary shares or other securities or other obligations
of the Company or another person and/or (iii) the amendment of the amount of interest due on the Contingent Capital Notes, or the dates
on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised
by means of variation to the terms of the Contingent Capital Notes solely to give effect to the above. With respect to (i), (ii) and
(iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable,
but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Contingent Capital
Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Contingent Capital Notes are
subject to, and will be varied, if necessary, solely to give effect to the exercise of any U.K. bail-in power by the relevant U.K. authority.
For the avoidance of doubt, the potential conversion of the Contingent Capital Notes into ordinary shares, other securities or other
obligations in connection with the exercise of any U.K. bail-in power by the relevant U.K. authority is separate and distinct from the
Automatic Conversion following a Conversion Trigger Event.

 

    18 

     

    

 

By its acquisition
of the Contingent Capital Notes, each Holder and Beneficial Owner (i) acknowledges and agrees that the exercise of the U.K. bail-in power
by the relevant U.K. authority with respect to the Contingent Capital Notes or any cancellation or deemed cancellation of interest pursuant
to ‎Section 3.03 or ‎Section
3.04 of the Eighth Supplemental Indenture and the terms of this Security shall not give rise to a default for purposes of Section 315(b)
(Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the U.S. Trust Indenture Act of 1939,
(ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a
suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains
from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. authority with respect to
the Contingent Capital Notes, (iii) acknowledges and agrees that, (a) upon the exercise of any U.K. bail-in power by the relevant U.K.
authority, the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Contingent Capital
Notes under Section 5.12 of the Contingent Convertible Securities Indenture and (b) the Indenture shall impose no duties upon the Trustee
whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. authority. Notwithstanding the foregoing in (iii),
if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. authority, the Contingent Capital Notes remain
outstanding, (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Contingent
Capital Notes) then the Trustee’s duties under the Indenture shall remain applicable with respect to the Contingent Capital Notes
following such completion to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company
and the Trustee agree that a supplemental indenture is not necessary, and (iv) shall be deemed to have (y) consented to the exercise
of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. authority of its decision to exercise such
power with respect to the Contingent Capital Notes and (z) authorized, directed and requested DTC and any direct participant in DTC or
other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise
of any U.K. bail-in power with respect to the Contingent Capital Notes as it may be imposed, without any further action or direction
on the part of such Holder and such Beneficial Owner or the Trustee.

 

Each Holder and
Beneficial Owner that acquires its Contingent Capital Notes in the secondary market shall be deemed to acknowledge and agree to be bound
by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Contingent
Capital Notes that acquire the Contingent Capital Notes upon their initial issuance, including, without limitation, with respect to the
acknowledgement and agreement to be bound by and consent to the terms of the Contingent Capital Notes, including in relation to interest
cancellation, Automatic Conversion, the Settlement Shares Offer, the U.K. bail-in power, the write-down in the event of a Non-Qualifying
Takeover Event and the limitations on remedies specified in this Security and Section 5.04 of the Eighth Supplemental Indenture.

 

    19 

     

    

 

Upon the exercise
of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes, the Company shall provide a written
notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders and Beneficial
Owners of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

The Company’s
obligations to indemnify the Trustee in accordance with Section 6.07 of the Contingent Convertible Securities Indenture shall survive
any exercise of the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes and any Automatic
Conversion.

 

The exercise of
the U.K. bail-in power by the relevant U.K. authority with respect to the Contingent Capital Notes shall not constitute an Enforcement
Event.

 

A “Winding-up
or Administration Event” shall result if (i) an order is made, or an effective resolution is passed, for the winding up of
the Company (excluding in any such case a solvent winding-up solely for the purpose of a reconstruction, amalgamation, reorganization,
merger or consolidation of the Company, or the substitution in place of the Company of a Successor in Business, the terms of which have
previously been approved by the Trustee or in writing by Holders of not less than 2/3 (two-thirds) in aggregate principal amount of the
Contingent Capital Notes); or (ii) an administrator of the Company is appointed and such administrator gives notice that it intends to
declare and distribute a dividend.

 

If a Winding-up
or Administration Event occurs prior to the occurrence of a Conversion Trigger Event, subject to the subordination provisions of Article
6 of the Eighth Supplemental Indenture, the principal amount of the Contingent Capital Notes shall become immediately due and payable,
without the need of any further action on the part of the Trustee, the Holders or any other Person, including the declaration by the
Trustee, the Holders or any other Person that the principal amount of the Contingent Capital Notes will become immediately due and payable.

 

Subject to ‎Section
3.13 of the Eighth Supplemental Indenture, if the Company does not make payment of principal in respect of the Contingent Capital Notes
for a period of fourteen (14) calendar days or more after the date on which such payment is due (a “Non-Payment Event”),
then the Trustee, on behalf of the Holders and Beneficial Owners, may, at its discretion, or shall at the direction of Holders of 25%
or more of the aggregate principal amount of Outstanding Contingent Capital Notes, subject to any applicable laws, institute proceedings
for the winding up of the Company. In the event of a Winding-up or Administration Event or liquidation of the Company, whether or not
instituted by the Trustee, the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the Winding up or Administration
Event of the Company and/or claim in the liquidation of the Company, such claims as set out in ‎Section
6.01 of the Eighth Supplemental Indenture. For the avoidance of doubt, the Trustee may not declare the principal amount of any outstanding
Contingent Capital Notes to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the collection
of the sums due and unpaid on the Contingent Capital Notes.

 

    20 

     

    

 

In the event of
a breach of any term, obligation or condition binding upon the Company under the Contingent Capital Notes or the Indenture (other than
any payment obligation of the Company under or arising from the Contingent Capital Notes or the Indenture, including payment of any principal
or interest including any damages awarded for breach of any obligation) (such obligation, a “Performance Obligation”),
the Trustee may without further notice institute such proceedings against the Company as it may deem fit to enforce the Performance Obligation,
provided that the Company shall not by virtue of the institution of any such proceedings be obliged to pay any sum or sums, in cash or
otherwise (including damages for breach of any obligations under the Contingent Capital Notes) earlier than the same would otherwise
have been payable under the Contingent Capital Notes or the Indenture, but excluding any payments made to the Trustee acting on its own
account in respect of its costs, expenses, liabilities or remuneration. For the avoidance of doubt, any breach by the Company of any
Performance Obligation shall not confer upon the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of
the Contingent Capital Notes any claim for damages and, in the event of such a breach of a Performance Obligation, the sole and exclusive
remedy that the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Contingent Capital Notes may
seek under the Contingent Capital Notes and the Indenture is specific performance under the laws of the State of New York. By its acquisition
of the Contingent Capital Notes, each Holder and Beneficial Owner of the Contingent Capital Notes acknowledges and agrees (i) that such
Holder and Beneficial Owner shall not seek, and shall not direct the Trustee (acting on their behalf) to seek, any claim for damages
against the Company in respect of any breach by the Company of a Performance Obligation, and (ii) that the sole and exclusive remedy
that such Holder and Beneficial Owner and/or the Trustee (acting on their behalf) may seek under the Contingent Capital Notes and the
Indenture for a breach by the Company of a Performance Obligation is specific performance under the laws of the State of New York.

 

Other than the limited
remedies specified in this Security and Article 5 of the Eighth Supplemental Indenture, and subject to the second paragraph below, no
remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) or to the Holders and Beneficial Owners,
whether for the recovery of amounts owing in respect of such Securities or under the Indenture, or in respect of any breach by the Company
of any of the Company’s obligations under or in respect of the terms of such Securities or under the Indenture in relation thereto;
provided, however, that the Company’s obligations to the Trustee under, and the Trustee’s lien provided for
in, Section 6.07 of the Contingent Convertible Securities Indenture and the Trustee’s rights to have money collected applied first
to pay amounts due to it under such Section pursuant to Section 5.06 of the Contingent Convertible Securities Indenture expressly survive
any Enforcement Event and are not subject to the subordination provisions of ‎Section
6.01 of the Eighth Supplemental Indenture.

 

    21 

     

    

 

For purposes of
the Contingent Convertible Securities Indenture, “Event of Default” shall mean an “Enforcement Event”
as defined in the Eighth Supplemental Indenture, except that the term “Event of Default” as used in Article 8 of the Contingent
Convertible Securities Indenture shall mean “Winding-up or Administration Event.”

 

Notwithstanding
the limitations on remedies specified in this Security and under Article 5 of the Eighth Supplemental Indenture, (i) the Trustee shall
have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial
Owners of the Contingent Capital Notes under the provisions of the Indenture, and (ii) nothing shall impair the right of a Holder or
Beneficial Owner of the Contingent Capital Notes under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s
consent, to sue for any payment due but unpaid with respect to the Contingent Capital Notes; provided that, in the case of (i) and (ii)
above, any payments in respect of, or arising from, the Contingent Capital Notes, including any payments or amounts resulting or arising
from the enforcement of any rights under the Trust Indenture Act in respect of the Contingent Capital Notes, shall be subject to the
subordination provisions set forth in ‎Section 6.01 of the Eighth
Supplemental Indenture.

 

In furtherance of
Section 6.01 of the Contingent Convertible Securities Indenture:

 

(i)        For
purposes of Sections 315(a) and 315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean an Enforcement
Event which has occurred and is continuing.

 

(ii)        Notwithstanding
anything contained in the Contingent Convertible Securities Indenture to the contrary, the duties and responsibilities of the Trustee
under this Indenture shall be subject to the protections, exculpations and limitations on liability afforded to an indenture trustee
under the provisions of the Trust Indenture Act.

 

With respect to
the Contingent Capital Notes only, and pursuant to Section 12.01(a) of the Contingent Convertible Securities Indenture, the extent and
manner in which the payment of principal of (and premium, if any) and interest, if any, on the Contingent Convertible Securities is subordinated
to the claims of the holders of certain other present or future obligations of the Company shall be determined as set out in ‎Section
6.01 of the Eighth Supplemental Indenture. References in the Contingent Convertible Securities Indenture to Section 12.01(a) thereof
shall be to ‎Section 6.01 of the Eighth Supplemental Indenture. For
the avoidance of doubt, no provision of Article 12 of the Contingent Convertible Securities Indenture other than replacing Section 12.01(a)
with ‎Section 6.01 of the Eighth Supplemental Indenture shall be
amended by the Eighth Supplemental Indenture.

 

The Contingent Capital
Notes shall constitute the Company’s direct, unsecured and subordinated obligations, ranking pari passu without any preference
among themselves. The rights and claims of the Holders and Beneficial Owners of the Contingent Capital Notes in respect of or arising
from the Contingent Capital Notes shall be subordinated to the claims of Senior Creditors.

 

    22 

     

    

 

If a Winding-up
or Administration Event occurs before the date on which the Conversion Trigger Event occurs, there shall be payable by the Company in
respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if any, as would have been payable
to a Holder or Beneficial Owner if, on the day prior to the commencement of a Winding-up or Administration Event and thereafter, such
Holder or Beneficial Owner were the holder of one of a class of Notional Preference Shares on the assumption that the amount that such
Holder or Beneficial Owner was entitled to receive in respect of such Notional Preference Shares, on a return of assets in such Winding-up
or Administration Event, was an amount equal to the principal amount of the relevant Contingent Capital Note, together with any Accrued
Interest and any damages for breach of any obligations thereunder (if payable), regardless of whether the Solvency Condition is satisfied
on the date upon which the same would otherwise be due and payable.

 

In the paragraph
above, “Notional Preference Shares” means an actual or notional class of preference shares in the capital of the Company
having an equal right to return of assets in a Winding-up or Administration Event to, and so ranking pari passu with, the most
senior class or classes of issued preference shares with non-cumulative dividends (if any) in the capital of the Company from time to
time and which have a preferential right to a return of assets in a Winding-up or Administration Event over, and so rank ahead of all
other classes of issued shares for the time being in the capital of the Company but ranking junior to the claims of Senior Creditors
and junior to any notional class of preference shares in the capital of the Company which is referenced in any instrument of the Company
for the purposes of determining a claim in the winding-up or administration of the Company and, as so referenced, (i) is expressed to
have a preferential right to a return of assets in the Company’s winding-up or administration over the holders of all other classes
of shares for the time-being in the capital of the Company and (ii) is not expressed to rank junior to any other notional class of preference
shares in the capital of the Company. The terms “Parity Securities” and “Senior Creditors” have
the meaning given to such terms in the Eighth Supplemental Indenture.

 

If a Winding-up
or Administration Event occurs on or after the date on which the Conversion Trigger Event occurs but the Settlement Shares to be issued
and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be payable by the Company
in respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if any, as would have been payable
to the Holder or Beneficial Owner of such Contingent Capital Note in a Winding-up or Administration Event if the Conversion Date in respect
of the Automatic Conversion had occurred immediately before the occurrence of a Winding-up or Administration Event (and, as a result,
such Holder or Beneficial Owner were the holder of such number of the Company’s ordinary shares as such Holder or Beneficial Owner
would have been entitled to receive on the Conversion Date, ignoring for this purpose the Company’s right to make an election for
a Settlement Shares Offer to be effected pursuant to ‎Section 3.18
of the Eighth Supplemental Indenture), regardless of whether the Solvency Condition is satisfied on the date upon which the same would
otherwise be due and payable.

 

    23 

     

    

 

Other than in the
event of a Winding-up or Administration Event of the Company, or in relation to the Cash Component of any Alternative Consideration in
any Settlement Shares Offer payments in respect of or arising from the Contingent Capital Notes (including any damages for breach of
any obligations thereunder) shall, in addition to the right of the Company to cancel payments of interest pursuant to the terms of the
Eighth Supplemental Indenture or this Security, be conditional upon the Company’s being solvent at the time when the relevant payment
is due to be made, and no principal, interest or other amount shall be due and payable in respect of or arising from the Contingent Capital
Notes except to the extent that the Company could make such payment and still be solvent immediately thereafter (such condition referred
to herein as the “Solvency Condition”).

 

For purposes of
determining whether the Solvency Condition is met, the Company shall be considered to be solvent at a particular point in time if (i)
it is able to pay its debts as they fall due and (ii) its Assets are at least equal to its Liabilities.

 

Subject to applicable
law, the Trustee (acting on behalf of the Holders) and the Holders of the Contingent Capital Notes by their acceptance thereof will be
deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the Contingent Capital Notes, the
Eighth Supplemental Indenture or the Contingent Convertible Securities Indenture (or between the Company’s obligations under or
in respect of the Contingent Capital Notes and any liability owed by a Holder to the Company) that they (or the Trustee acting on their
behalf) might otherwise have against the Company, whether before or during any Winding-up or Administration Event. Notwithstanding the
above, if any of such rights and claims of any such Holder (or the Trustee acting on behalf of such Holders) against the Company are
discharged by set-off, such Holder (or the Trustee acting on behalf of such Holder) will immediately pay an amount equal to the amount
of such discharge to the Company or, in the event of any Winding-up or Administration Event, the liquidator or administrator (or other
relevant insolvency official), as the case may be, to be held on trust for the Senior Creditors and until such time as payment is made
will hold a sum equal to such amount on trust for Senior Creditors, and accordingly such discharge shall be deemed not to have taken
place.

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the rights of the Holders of the Contingent Capital Notes of each series to be affected under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Contingent Capital Notes then
outstanding of each series to be affected.

 

With respect to
Contingent Capital Notes issued pursuant to the Eighth Supplemental Indenture, any agreements, arrangements or understandings between
the Company and any Holder and Beneficial Owner of the Contingent Capital Notes with respect to the Contingent Capital Notes must be
entered into in accordance with the terms of the Contingent Convertible Securities Indenture and the Eighth Supplemental Indenture.

 

    24 

     

    

 

Holders of not less
than a majority in aggregate principal amount of the Outstanding Contingent Capital Notes may on behalf of the Holders of all of the
Contingent Capital Notes waive any past Enforcement Event that results from a breach by the Company of a Performance Obligation. Holders
of a majority of the aggregate principal amount of the outstanding Contingent Capital Notes shall not be entitled to waive any past Enforcement
Event that results from a Winding-up or Administration Event or a Non-Payment Event.

 

As set forth in,
and subject to, the provisions of the Indenture, no Holder will have the right to institute any proceeding, judicial or otherwise, with
respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder fulfils
the requirements of Section 5.07 of the Contingent Convertible Securities Indenture.

 

This Security, and
any other Securities of this series and of like tenor, are issuable only in registered form without coupons in initial denominations
of $200,000 and increments of $1,000 thereafter. The denominations cannot be changed without the consent of the Trustee. The denomination
of each interest in this Security shall be the “Tradable Amount” of such book-entry interest. Prior to the Automatic
Conversion, the aggregate Tradable Amount of the interests in this Security shall equal this Security’s outstanding principal amount.
Following the Automatic Conversion, the principal amount of this Security shall equal zero, but the Tradable Amount of the book-entry
interests in this Security shall remain unchanged as a result of the Automatic Conversion.

 

Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person
in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security shall be governed by
and construed in accordance with the laws of the State of New York, except (i) as otherwise provided for pursuant to Section 1.12 of
the Contingent Convertible Securities Indenture and ‎Section
10.07 of the Eighth Supplemental Indenture, the subordination provisions referred to herein and in ‎Section
6.01 of the Eighth Supplemental Indenture (which replaces in its entirety Section 12.01(a) of the Contingent Convertible Securities Indenture)
and the waiver of the right to set-off referred to herein and in ‎Section
6.02 of the Eighth Supplemental Indenture, which are governed by, and construed in accordance with, Scots law (other than the Trustee’s
own rights, duties or immunities under Article 12 of the Contingent Convertible Securities Indenture, as amended by ‎Section
6.01 of the Eighth Supplemental Indenture, or otherwise), and (ii) the authorization and execution by the Company of this Security shall
be governed by (in addition to the laws of the State of New York relevant to execution) the jurisdiction of the Company.

 

    25 

     

    

Exhibit
B

 

Form
of Conversion Trigger Notice1

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[NatWest
Group Letterhead]

 

		To:	The Depository Trust Company

                                            55 Water Street, 25th Floor

                                            New York, NY 10041-0099

                                            Attn: Mandatory Reorganization Department

                                            Fax: +1 (212) 855-5488

                                            Email: mandatoryreorgannouncements@dtcc.com

 

	Cc:	The
Bank of New York Mellon

    One
Canada Square

    London
E14 5AL

    United
Kingdom

    Attn:
[ ]

    Email:[
]

    Fax:
[ ]

    Tel:
[ ]
	The
Bank of New York Mellon

    One Wall Street

    New York, NY
10286

    United States
of America

    Attn:[ ]

    Email:[
]

    Fax: [ ]

    Tel: [ ]

 

Re: NatWest Group
plc [$][ ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) – Notice to DTC,
Holders and Beneficial Owners of the Occurrence of a Conversion Trigger Event

 

This notice is in
relation to NatWest Group plc’s (the “Company”) [$][ ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) issued on [ ], 2021 (the “Securities”) pursuant to the Contingent Convertible
Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”),
as amended and supplemented by the Fifth Supplemental Indenture dated as of August 19, 2020 and as supplemented by the Eighth Supplemental
Indenture, dated [●], 2021, between the Company and the Trustee (together, the “Indenture”), and pursuant to
the prospectus dated December 13, 2017. Capitalized terms used herein and not defined herein shall have the respective meanings ascribed
to such terms in the Indenture.

 

The Company hereby
notifies The Depository Trust Company (“DTC”), the Holders and Beneficial Owners of the Contingent Capital Notes that
a Conversion Trigger Event has occurred with respect to the Contingent Capital Notes. Such Conversion Trigger Event has occurred because
the Regulatory Group’s CET1 Ratio as determined on [    ] was less than 7.00%.

 

____________________

 

1
Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and
to changes in DTC (or successor clearing system) policies and procedures.

 

    26 

     

    

 

Upon the occurrence
of the Conversion Trigger Event, the terms of the Contingent Capital Notes provide for the Automatic Conversion of the Contingent Capital
Notes into Settlement Shares on the Conversion Date, which is expected to be [date], at the Conversion Price. Upon the Automatic Conversion,
all of the Company’s obligations under the Contingent Capital Notes shall be irrevocably and automatically released in consideration
of the Company’s issuance and delivery of Settlement Shares to the Settlement Share Depository (or other relevant recipient). However,
the terms of the Contingent Capital Notes provide that the Contingent Capital Notes shall remain in existence until the applicable Settlement
Date for the sole purpose of evidencing a right to receive Settlement Shares, or, if the Holder elects, ADSs or Alternative Consideration,
as applicable, from the Settlement Share Depository.

 

Accordingly, the
Company hereby instructs DTC to indicate to all participants that payments of principal and interest are no longer payable under the
Contingent Capital Notes as of the Conversion Date and that the Contingent Capital Notes will have no further entitlement to interest
or principal as of such date by making a note to that effect in its systems.

 

The Company further
requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing
notices to holders of securities).

 

Should DTC, any
Holder or any Beneficial Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax,
Email] or [Name] or the Settlement Share Depository, at [Telephone, Fax, Email].2

 

 

 

____________________

 

2
Insert contact details of any Settlement Share Depository, or, if NatWest Group plc has been unable to appoint a Settlement Share
Depository, any other details required to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or
any Alternative Consideration as to Holders and Beneficial owners as NatWest Group plc shall consider reasonable in the circumstances.

 

    27 

     

    

 

Exhibit
C

 

Form
of Conversion Trigger Event Officer’s Certificate

 

NATWEST
GROUP PLC

 

Conversion
Trigger Event Officer’s Certificate

 

This Officer’s
Certificate is being delivered in relation to NatWest Group plc’s (the “Company”) [$][     ] Perpetual Subordinated
Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [      ], ISIN: [      ]) issued on [ ], 2021 (the “Securities”)
pursuant to the Contingent Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon,
London Branch, as Trustee (the “Trustee”), as amended and supplemented by the Fifth Supplemental Indenture, dated
August 19, 2020, and as supplemented by the Eighth Supplemental Indenture dated [●], 2021 between the Company and the Trustee (together,
the “Indenture”).

 

Capitalized terms
used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

Pursuant to ‎Section
1.02 of the Contingent Convertible Securities Indenture and ‎‎Section
3.16(b) of the Eighth Supplemental Indenture, the undersigned, being authorized signatory of the Company and authorized by the Company
to give this certificate, hereby certifies as follows:

 

(a)           
I have read all of the covenants and conditions in the Indenture, setting forth certain provisions in respect of the occurrence
of a Conversion Trigger Event, including ‎ ‎Section 3.16(b) of the Eighth Supplemental Indenture, and the definitions relating
thereto;

 

(b)           
[Include a brief statement as to the nature and scope of the examination or investigation upon which the statements contained
in such certificate are based][I have reviewed such other documents as I have deemed necessary as a basis for the opinion hereinafter
expressed];

 

(c)           
I have made such other examinations and investigations as I have deemed necessary to enable me to express an informed opinion
as to (i) whether or not such covenants and conditions have been complied with, and (ii) the matters set forth in ‎(d) below; and

 

(d)           
In my opinion, such conditions (including all conditions precedent) and covenants have been complied with; and

 

(e)           
a Conversion Trigger Event has occurred with respect to the Contingent Capital Notes. Such Conversion Trigger Event has occurred
because the Regulatory Group’s CET1 Ratio, as determined on [    ], was less than 7.00%.

 

    28 

     

    

 

[Concurrently with][Immediately
following] the delivery of this Conversion Trigger Event Officer’s Certificate, the Company is delivering to The Depository Trust
Company (“DTC”) the Conversion Trigger Notice attached hereto as Exhibit A as a notice to DTC and for publication
as a notice to Holders and Beneficial Owners in the form set forth in Exhibit B to the Eighth Supplemental Indenture.

 

The Trustee is entitled
to conclusively rely on and accept this Conversion Trigger Event Officer’s Certificate without any duty whatsoever of further inquiry
as sufficient and conclusive evidence of the occurrence of a Conversion Trigger Event, and this Conversion Trigger Event Officer’s
Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Dated: [     ]

 

	 
	 	 
	 	Name:	 
	 	Title:	 

    29 

     

    

Exhibit
D

 

Form
of Settlement Shares Offer Notice3

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[NatWest
Group Letterhead]

 

	To:	The
Depository Trust Company

    55 Water Street,
25th Floor

    New York, NY 10041-0099

    Attn: Mandatory
Reorganization Department

    Fax: +1 (212)
855-5488

    Email: mandatoryreorgannouncements@dtcc.com

     
	

    

     

	Cc:	The Bank of
New York Mellon

    One Canada Square

    London E14 5AL

    United Kingdom

    Attn: [        ]

    Email:[         ]

    Fax:   [         ]

    Tel:   [         ]
	The Bank of
New York Mellon

    One Wall Street

    New York, NY 10286

    United States
of America

    Attn: [         ]

    Email:[         ]

    Fax:   [         ]

    Tel:   [         ]

 

Re: NatWest Group
plc [$][ ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [        ], ISIN: [       ]) – Notice to DTC,
Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in
relation to NatWest Group plc’s (the “Company”) [$][ ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) issued on [ ], 2021 (the “Securities”) pursuant to the Contingent Convertible
Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”),
as amended and supplemented by the Fifth Supplemental Indenture dated as of August 19, 2020 and as supplemented by the Eighth Supplemental
Indenture, dated [●], 2021, between the Company and the Trustee (together, the “Indenture”), and pursuant to
the prospectus dated December 17, 2017 (the “Prospectus”). Capitalized terms used herein and not defined herein shall
have the respective meanings ascribed to such terms in the Indenture.

 

The Company hereby
notifies The Depository Trust Company (“DTC”), the Holders and the Beneficial Owners of the Contingent Capital Notes
that it has elected that the Settlement Share Depository conduct a Settlement Shares Offer. The Settlement Shares Offer Period will extend
from the date of this notice until [Date]4.

 

 

____________________

 

3
Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and
to changes in DTC (or successor clearing system) policies and procedures.

 

4
Note: Insert the date that the Settlement Shares Offer expires, which shall be no later than forty (40) business days after the
delivery of this Settlement Shares Offer Notice.

    30 

     

    

 

[In addition, the
Company hereby notifies DTC, the Holders and the Beneficial Owners of the Contingent Capital Notes that the Suspension Date shall be
[Date]5. Accordingly, the Company hereby instructs DTC to implement a “chill” on the clearance and settlement
of the Contingent Capital Notes on the Suspension Date. As described in the Prospectus, Holders and Beneficial Owners will not be able
to settle the transfer of any Contingent Capital Notes following the Suspension Date, and any sale or other transfer of the Contingent
Capital Notes that a Holder or Beneficial Owner may have initiated prior to the Suspension Date that is scheduled to settle after the
Suspension Date will be rejected by DTC and will not be settled within DTC.]6

 

NatWest Group plc
further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for
providing notices to holders of securities).

 

Should DTC, any
Holder or any Beneficial Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax,
Email] or [Name], the Settlement Share Depository, at [Telephone, Fax, Email] 7

 

 

 

____________________

 

5
Note: Insert the Suspension Date, which is the date on which DTC shall suspend all clearance and settlement of the Contingent Capital
Notes.

 

6
Insert information concerning the Suspension Date if such information has not previously been included in the Conversion Trigger
Notice.

 

7
Insert contact details of any Settlement Share Depository, or, if NatWest Group plc has been unable to appoint a Settlement Share
Depository, any other details required to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or
any Alternative Consideration as to Holders and Beneficial owners as NatWest Group plc shall consider reasonable in the circumstances.

    31 

     

    

 

Exhibit
E

 

Form
of Settlement Request Notice8

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[NatWest
Group Letterhead]

 

	To:	The
Depository Trust Company

    55 Water Street,
25th Floor

    New York, NY 10041-0099

    Attn: Mandatory
Reorganization Department

    Fax: +1 (212)
855-5488

    Email: mandatoryreorgannouncements@dtcc.com

     
	

    

     

	Cc:	The Bank of
New York Mellon

    One Canada Square

    London E14 5AL

    United Kingdom

    Attn: [        ]

    Email:[        ]

    Fax:   [
       ]

    Tel:   [       ]

     
	The Bank of
New York Mellon

    One Wall Street

    New York, NY 10286

    United States
of America

    Attn: [       ]

    Email:[        ]

    Fax:   [
       ]

    Tel:   [
       ]

 

Re: NatWest Group
plc [$][ ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) – Notice to DTC,
Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in
relation to NatWest Group plc’s (the “Company”) [$][ ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) issued on [ ], 2021 (the “Securities”) pursuant to the Contingent Convertible
Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”),
as amended and supplemented by the Fifth Supplemental Indenture dated as of August 19, 2020 and as supplemented by the Eighth Supplemental
Indenture, dated [●], 2021, between the Company and the Trustee (together, the “Indenture”), and pursuant to
the prospectus dated December 13, 2017 (the “Prospectus”). Capitalized terms used herein and not defined herein shall
have the respective meanings ascribed to such terms in the Indenture.

 

The Company hereby
requests that Holders and Beneficial Owners of the Contingent Capital Notes provide notice to [Name of Settlement Share Depository (or
other nominee)], as [Settlement Share Depository ]9, with a copy to the Trustee, in the form provided in Exhibit F to the
Eighth Supplemental Indenture before [Date] (the “Notice Cut-off Date”).

 

 

____________________

 

 

8
Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and
to changes in DTC (or successor clearing system) policies and procedures.

 

9
Note: If NatWest Group plc has been unable to appoint a Settlement Share Depository, this should refer to the entity undertaking
its functions.

    32 

     

    

 

If a Holder or Beneficial
Owner of the Contingent Capital Notes properly completes and delivers a Settlement Notice on or before the Notice Cut-off Date, the Settlement
Share Depository shall, in accordance with the terms of the Eighth Supplemental Indenture, deliver to such Holder or Beneficial Owner
the relevant Settlement Shares (rounded down to the nearest whole number of Settlement Shares), ADSs or Alternative Consideration, as
applicable, [on the date which is the later of (a) two (2) Business Days after the date on which the Settlement Notice is received by
the Settlement Share Depository and (b) two (2) Business Days after [Date]10.]

 

If a Holder or Beneficial
Owner of the Contingent Capital Notes fails to properly complete and deliver a Settlement Notice before the Notice Cut-off Date, the
Settlement Share Depository shall continue to hold the relevant Settlement Shares or Alternative Consideration. However, the relevant
Securities shall be cancelled on the Final Cancellation Date, which shall be [Date],11 and any Holder or Beneficial
Owner delivering a Settlement Notice after the Notice Cut-off Date will have to provide evidence of its entitlement to the relevant Settlement
Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement Share Depository in its sole and absolute discretion
in order to receive delivery of such Settlement Shares, ADSs or Alternative Consideration (if so elected to be deposited with the ADS
Depository on its behalf). The Company shall have no liability to any Holder or Beneficial Owner of the Contingent Capital Notes for
any loss resulting from such Holder’s or Beneficial Owner’s failure to receive any Alternative Consideration, Settlement
Shares or ADSs, or from any delay in the receipt thereof, in each case as a result of such Holder or Beneficial Owner (or custodian,
nominee, broker or other representative thereof) failing to duly submit a Settlement Notice and the relevant Contingent Capital Notes,
if applicable, on a timely basis or at all.

 

The Company further
requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing
notices to holders of securities).

 

Should DTC, any
Holder or any Beneficial Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax,
Email] or [Name], the [Settlement Share Depository], at [Telephone, Fax, Email].

 

 

____________________

 

 

10
Note: Date of expiry or termination of the Settlement Share offer period.

 

11
Note: The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-Off Date.

    33 

     

    

 

Exhibit
F

 

Form
of Settlement Notice12

NOTICE TO THE [SETTLEMENT SHARES DEPOSITORY AND] DTC

 

	To:	The
Depository Trust Company

    55 Water Street,
25th Floor

    New York, NY 10041-0099

    Attn: Mandatory
Reorganization Department

    Fax: +1 (212)
855-5488

    Email: mandatoryreorgannouncements@dtcc.com

     
	

    

     

	Cc:	The Bank of
New York Mellon

    One Canada Square

    London E14 5AL

    United Kingdom

    Attn: [         ]

    Email:[         ]

    Fax:   [         ]

    Tel: [           ]
	The Bank of
New York Mellon

    One Wall Street

    New York, NY 10286United
States of America

     

    Attn: [         ]

    Email:[        ]

    Fax:   [        ]

    Tel:   [        ]

 

Re: NatWest Group
plc [$][ ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) – Notice to DTC,
Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in
relation to NatWest Group plc’s (the “Company”) [$][ ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [ ], ISIN: [ ]) issued on [ ], 2021 (the “Securities”) pursuant to the Contingent Convertible
Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”),
as amended and supplemented by the Fifth Supplemental Indenture dated as of August 19, 2020 and as supplemented by the Eighth Supplemental
Indenture, dated [●], 2021, between the Company and the Trustee (together, the “Indenture”), and pursuant to
the prospectus dated December 13, 2017 (the “Prospectus”). Capitalized terms used herein and not defined herein shall
have the respective meanings ascribed to such terms in the Indenture.

 

 

 

____________________

 

12
Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and
to changes in DTC and CREST (or successor clearing system) policies and procedures.

 

    34 

     

    

 

INFORMATION
OF THE HOLDER OR BENEFICIAL OWNER FOR DELIVERY OF SETTLEMENT SHARES, ADSs OR ALTERNATIVE CONSIDERATION

 

Surname/Company
Name:

 

First name:

 

Name to be entered
in the share register of NatWest Group plc:

 

Tradable Amount
of the Contingent Capital Notes held on the date hereof:

 

Securities to be
delivered:

 

□ Settlement
Shares

 

CREST participant
ID:

 

CREST member account
(if applicable):

 

[Account details
of clearing system account]13

 

[Address to which
any Settlement Shares should be delivered]14

 

□ American
Depositary Shares

 

Registered account
in the Company’s American Depositary Share facility: 

 

Cash account details
(if applicable):

 

YOU MUST DELIVER
THE SETTLEMENT NOTICE TO THE SETTLEMENT SHARE DEPOSITORY AND THE TRUSTEE VIA DTC BEFORE [DATE].

 

If you fail to properly
complete and deliver the Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold
your Settlement Shares or Alternative Consideration. However, your Contingent Capital Notes shall be cancelled on the Final Cancellation
Date, which shall be [Date],15 and you will have to provide evidence of your entitlement to the relevant Settlement Shares,
ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement Share Depository in its sole and absolute discretion
in order to receive delivery of such Settlement Shares, ADSs or Alternative Consideration. 

 

__________________ 

 

13
Note: To be included if the Settlement Shares will be delivered through a clearing system account other than CREST.

 

14
Note: To be included if the Settlement Shares are not a participating security in CREST or any another clearing system.

 

15
Note: The Final Cancellation Date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

 

 

    35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00329-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00329-of-00352.parquet"}]]