Document:

Exhibit 10.11

 

FORM OF NONCOMPETITION AGREEMENT

 

AGREEMENT, made effective as of the     day of       ,       , by and among CPG International Holdings LP (“CPG LP”), a Delaware limited partnership, and its wholly owned subsidiaries, CPG International Inc., a Delaware corporation (“CPG International”), CPG International I Inc., a Delaware corporation (“CPG”), AZEK Building Products, Inc., a Delaware corporation (“AZEK”) and Scranton Products Inc., a Delaware corporation (“Scranton,” together with CPG LP, CPG International, CPG, AZEK, and Scranton, the “Companies” and each individually a “Company”), and                    (the “Covenantor”) (the “Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, the Covenantor currently serves as                                of

 

WHEREAS, the Covenantor, by reason of his intimate involvement in the operations and management of CPG International and its subsidiaries and affiliates has acquired, and will continue to acquire, knowledge and expertise relating to the business and operations of the Companies;

 

WHEREAS, the Companies would not enter into the Employment Agreement, dated as of March 26, 2009 by and among the Companies and the Covenantor (the “Employment Agreement”), without obtaining the agreement that the expertise and knowledge of the Covenantor will not be put to any use which may in any way harm the Companies or their subsidiaries and affiliates or their interests; and

 

WHEREAS, Covenantor acknowledges that the Companies would not enter into the Employment Agreement unless Covenantor executes and delivers this Agreement, and wishes to forego his right to compete therewith with respect to the business of the Companies and their subsidiaries and affiliates.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto, intending legally to be bound, hereby agree as follows:

 

1.                                       Noncompetition; Nonsolicitation.

 

(a)                                  Subject to the provisions of Paragraph 1(c), from and after the date hereof and for the twenty-four (24) month period following termination of the Covenantor’s employment with the Companies, the Covenantor shall not, without the prior written consent of the Companies:

 

(i)                                     directly or indirectly, as a sole proprietor, member of a partnership, stockholder, investor, officer or director of a corporation or other business organization or entity, including, without limitation, as an employee, associate, consultant or agent of any person, partnership, corporation or other business organization or entity, render any service to (including the making of investments in or otherwise providing capital to) any competitor (or any person or entity that is reasonably anticipated to become a competitor within the term hereof) of any of the

 

 

Companies or their subsidiaries or affiliates, within the geographic areas described in Paragraph 1(b); it being understood that such a person, partnership, corporation or other business organization or entity is in competition with a Company or its subsidiaries or affiliates if it is then engaging or planning to engage within the term hereof, itself or through any joint venture, partnership or otherwise, in any business in which (A) any Company or its subsidiaries or affiliates (1) has been engaged in prior to the date hereof (unless such engagement has been terminated) or (2) is presently engaged in at the date hereof, or (B) any Company or its subsidiaries or affiliates is engaged in or has taken steps in preparation to engage in during the term hereof;

 

(ii)                                  induce or attempt to induce any person or entity which is or was a customer or client of any Company or its subsidiaries or affiliates, or becomes a customer or client of any Company or its subsidiaries or affiliates, to terminate its relationship or otherwise cease doing business in whole or in part with any Company or its subsidiaries or affiliates;

 

(iii)                               solicit, entice, induce or hire any person who is an employee, or becomes an employee, of any Company or its subsidiaries or affiliates to become employed by any other person, firm or corporation or to leave his or her employment with any Company or its subsidiaries or affiliates, or approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or

 

(iv)                              interfere with any relationship between any Company or its subsidiaries or affiliates and any of its or their customers or clients so as to cause harm to such Company or its subsidiaries or affiliates.

 

(b)                                 The restrictions contained in Paragraph l(a) shall apply in the specific geographic areas and customer markets within such geographic areas served by any Company or its subsidiaries or affiliates at any time during the term hereof.

 

(c)                                  Nothing in this Paragraph 1 shall prohibit the Covenantor from (i) engaging in any business that is not in competition with any Company or its affiliates or (ii) investing in the securities of any corporation having securities listed on a national securities exchange, provided that such investment does not exceed 2% of any class of securities of any corporation engaged in business in competition with any Company or its affiliates, and provided that such investment represents a passive investment and that neither the Covenantor nor any group of persons including him, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations or otherwise takes any part in its business, other than exercising his or her rights as a shareholder, or seeks to do any of the foregoing.

 

2.                                       Non-Disclosure of Confidential Information.  The Covenantor agrees that on and after the date of this Agreement he shall not, without the prior written consent of each Company, use for himself or others, or divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity, any Confidential Information pertaining to the business of any Company or its or their affiliates, except when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of such Company, or by any administrative body or legislative body (including a

 

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committee thereof) with jurisdiction to order the Covenantor to divulge, disclose or make accessible such information.  All Confidential Information in the Covenantor’s possession shall be returned to the Companies promptly following the date hereof.  The term “Confidential Information” shall mean non-public information concerning any Company or its or their affiliates, including, but not limited to, financial data, strategic business plans, product development or other proprietary product data, customer lists, consulting or licensing agreements, vendor lists, lists of potential customers, pricing and credit techniques, private processes, marketing plans, reports, summaries, analyses or other proprietary information now or hereafter in the possession of the Covenantor, except for specific items which have become publicly available information (other than such items which the Covenantor knows have become publicly available through a breach of fiduciary duty or any confidentiality agreement).

 

3.                                       Inventions.  The Covenantor shall promptly, and in any event no later than one (1) year after termination of his employment with the Companies, with respect to Inventions (as defined below) made or conceived by the Covenantor during his employment with any Company, either solely or jointly with others, if based on or related to or connected with the business of any Company or if any Company’s time, material, facilities or other employees contributed thereto:

 

(a)                                  Promptly and fully inform the Companies in writing of such Inventions;

 

(b)                                 Assign, and the Covenantor does hereby assign, to the Companies all of the Covenantor’s rights to such Inventions, if any, and to applications for letters patent and to letters patent granted upon such Inventions; and

 

(c)                                  Acknowledge and deliver promptly to the Companies (without charge to the Covenantor but at the expense of the Companies) such written instruments and do such other acts as may be reasonably necessary to obtain and maintain letters patent and to vest the entire right and title thereto in the Companies.

 

All Inventions, regardless of whether or not they are considered “works for hire,” shall for all purposes be regarded as acquired and held by the Covenantor for the benefit, and shall be the sole and exclusive property, of the Companies.  The term “Inventions” shall mean discoveries, developments, improvements, or inventions (whether patentable or not) related to the business of any Company.

 

4.                                       Non-Disparagement.  From and after the date hereof and following termination of the Covenantor’s employment with the Companies, the Covenantor agrees not to make any statement that that criticizes, ridicules, disparages or is otherwise derogatory of the Companies or any of their subsidiaries, affiliates, employees, officers, directors or stockholders.

 

5.                                       Remedy for Certain Breaches.

 

(a)                                  The Covenantor acknowledges and agrees that the restrictions on his activities under the provisions of Paragraphs 1, 2, 3 and 4 above are required for the reasonable protection of each Company.  The Covenantor further acknowledges and agrees that a breach of any of those obligations will result in irreparable harm to the Companies, for which there would be no adequate remedy at law, and therefore, the Covenantor irrevocably and unconditionally (i)

 

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agrees that in addition to any other remedies which each Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, each Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief, without the necessity of proving actual damage, restraining the Covenantor from doing or continuing to do or perform any acts constituting such breach or threatened breach, (ii) agrees that such relief and any other claim by any Company pursuant hereto may be brought in the United States District Court for the Southern District of New York, or if such court does not have subject matter jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in the State of New York, (iii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iv) waives any objection which the Covenantor may have to the laying of venue of any such suit, action or proceeding in any such court.

 

(b)                                 The Covenantor agrees that the existence of any claim or cause of action by the Covenantor against any Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by such Company of the provisions of this Agreement.

 

6.                                       Nature of Restrictions.  The Covenantor has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon each Company under this Agreement, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to any Company, do not stifle the inherent skill and experience of the Covenantor, would not operate as a bar to the Covenantor’s sole means of support, are fully required to protect the legitimate interests of each Company and do not confer a benefit upon any Company disproportionate to the detriment to the Covenantor.

 

7.                                       Warranties.  The Covenantor warrants and represents that he has full power and authority to enter into this Agreement for and on behalf of himself and that such act, and the performance of his obligations hereunder, will not conflict with any other agreements or undertakings to which he is a party or to which he is bound.

 

8.                                       Notices.  All notices, requests, consents and demands by the parties hereunder shall be delivered by hand, by confirmed facsimile transmission, by recognized national overnight courier service or by deposit in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to the party to be notified at the addresses set forth below:

 

If to the Covenantor:

 

 

 

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If to any Company:

 

c/o AEA Investors LLC

55 East 52nd Street

New York, NY 10022

Attention: General Counsel

 

With copy to:

 

Fried, Frank, Harris, Shriver and Jacobson LLP

One New York Plaza

New York, NY 10004

Attention: Christopher Ewan, Esq.

 

Notices shall be effective immediately upon personal delivery or facsimile transmission, one business day after deposit with an overnight courier service or three (3) business days after the date of mailing thereof.  Other notices shall be deemed given on the date of receipt.  Any party hereto may change the address specified herein by written notice to the other parties hereto.

 

9.                                       Entire Agreement.  This Agreement cancels and supersedes any and all prior agreements and understandings between the parties hereto with respect to the obligations of the Covenantor and constitutes the entire agreement between the parties with respect to the matters herein provided.  No modifications or waiver of any provision hereof shall be effective unless in writing and signed by each Company and the Covenantor.

 

10.                                 Binding Effect.  All of the terms and provisions of this Agreement shall be binding upon the parties hereto and its, their or his heirs, executors, administrators, legal representatives, successors and assigns, and inure to the benefit of and be enforceable by the Companies and their successors and assigns, except that the duties and responsibilities of the Covenantor hereunder are of a personal nature and shall not be assignable or delegable in whole or in part.

 

11.                                 Reformation of Agreement; Severability.  In the event that any of the provisions of Paragraph 1, 2, 3 or 4 shall be found by a court of competent jurisdiction to be invalid or unenforceable to any extent for any reason, such court shall exercise its discretion in reforming such provision(s) to the end that the Covenantor shall be subject to nondisclosure, nonsolicitation and noncompetition covenants that are reasonable under the circumstances and enforceable by any Company.  In the event that any other provision of this Agreement or application thereof to anyone or under any circumstance is found to be invalid or unenforceable in any jurisdiction to any extent for any reason, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction.

 

12.                                 Remedies; Waiver.  No remedy conferred upon any Company by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter

 

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existing at law or in equity.  No delay or omission by any Company in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

 

13.                                 Counterparts.  This Agreement may be executed in several counterparts, each of which is an original and all of which shall constitute one instrument.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

 

14.                                 Governing Law.  The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New York, without application of conflict of laws principles.

 

15.                                 Headings.  The captions and headings contained in this Agreement are for convenience only and shall not be construed as a part of the Agreement.

 

[signature page follows]

 

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

 

 

	
CPG   INTERNATIONAL HOLDINGS LP
    	
CPG   INTERNTIONAL I INC.
    
	
 
    	
 
    
	
By:
    	
CPG   Holding I LLC 
    	
 
    
	
 
    	
Its   General Partner 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
CPG   INTERNATIONAL INC.
    	
SCRANTON   PRODUCTS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
Name:   
    
	
 
    	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
AZEK   BUILDING PRODUCTS, INC.
    	
COVENANTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

This form of Noncompetition Agreement has been entered into with the following executives:

 

Donald C. Wharton

Jason Grommon

Ken BuckExhibit 10.18

 

EXECUTION COPY

 

LOAN AND SECURITY AGREEMENT

 

by and among

 

SCRANTON PRODUCTS INC.
 AZEK BUILDING PRODUCTS, INC.
 PROCELL DECKING INC.
 as Borrowers

 

CPG INTERNATIONAL INC.
 CPG INTERNATIONAL I INC.
 SANTANA PRODUCTS INC.
 CPG SUB I CORPORATION
 VYCOM CORP.

 

SANATEC SUB I CORPORATION
 as Guarantors

 

THE LENDERS AND ISSUING BANK FROM TIME TO TIME PARTY HERETO

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
 as Administrative Agent

 

WELLS FARGO CAPITAL FINANCE, LLC
 as Collateral Agent

 

UBS SECURITIES LLC and WELLS FARGO CAPITAL FINANCE, LLC
 as Co-Documentation Agents

 

UBS SECURITIES LLC and WELLS FARGO CAPITAL FINANCE, LLC
 as Co-Syndication Agents

 

CREDIT SUISSE SECURITIES (USA) LLC, 
 UBS SECURITIES LLC and WELLS FARGO CAPITAL FINANCE, LLC
 as Joint Lead Arrangers and Joint Lead Bookrunners

 

 

Dated: February 18, 2011

 

 

TABLE OF CONTENTS

 

	
SECTION 1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
CREDIT FACILITIES
    	
48
    
	
2.1
    	
Revolving   Loans
    	
48
    
	
2.2
    	
[Reserved]
    	
48
    
	
2.3
    	
Letters   of Credit
    	
48
    
	
2.4
    	
Requests   for Borrowings
    	
53
    
	
2.5
    	
Increase   in Maximum Credit
    	
54
    
	
2.6
    	
Decrease   in Maximum Credit
    	
56
    
	
2.7
    	
Prepayments
    	
56
    
	
2.8
    	
Joint   and Several Liability of Borrowers
    	
57
    
	
2.9
    	
Commitments
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
INTEREST AND FEES
    	
59
    
	
3.1
    	
Interest
    	
59
    
	
3.2
    	
Fees
    	
59
    
	
3.3
    	
Inability   to Determine Applicable Interest Rate
    	
61
    
	
3.4
    	
Illegality
    	
61
    
	
3.5
    	
Increased   Costs
    	
61
    
	
3.6
    	
Capital   Requirements
    	
62
    
	
3.7
    	
Certificates   for Reimbursement
    	
62
    
	
3.8
    	
Delay   in Requests
    	
62
    
	
3.9
    	
Mitigation;   Replacement of Lenders
    	
62
    
	
3.10
    	
Funding   Losses
    	
63
    
	
3.11
    	
Maximum   Interest
    	
63
    
	
3.12
    	
No   Requirement of Match Funding
    	
64
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
CONDITIONS PRECEDENT
    	
64
    
	
4.1
    	
Conditions   Precedent to Effectiveness of Agreement to Make Initial Loans and Letters of   Credit
    	
64
    
	
4.2
    	
Conditions   Precedent to All Loans and Letters of Credit
    	
69
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
GRANT AND PERFECTION OF SECURITY INTEREST
    	
69
    
	
5.1
    	
Grant   of Security Interest
    	
69
    
	
5.2
    	
Exclusions   from Collateral
    	
71
    
	
5.3
    	
Perfection   of Security Interests
    	
71
    
	
5.4
    	
Control   Collateral Held by Control Agent
    	
74
    
	
5.5
    	
Intercreditor   Provisions
    	
75
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
COLLECTION AND ADMINISTRATION
    	
75
    
	
6.1
    	
Borrowers’   Loan Accounts
    	
75
    
	
6.2
    	
Statements
    	
75
    
	
6.3
    	
Lenders’   Evidence of Debt
    	
75
    
	
6.4
    	
Register
    	
75
    
	
6.5
    	
Promissory   Notes
    	
76
    
	
6.6
    	
Cash   Management; Collection of Proceeds of Collateral
    	
76
    
	
6.7
    	
Payments
    	
77
    
	
6.8
    	
Taxes
    	
78
    
	
6.9
    	
Use   of Proceeds
    	
81
    
	
6.10
    	
Appointment   of Borrower Agent as Agent for Requesting Loans and Receipts of Loans and   Statements
    	
82
    

 

 

	
6.11
    	
Pro   Rata Treatment
    	
82
    
	
6.12
    	
Sharing   of Payments, Etc.
    	
82
    
	
6.13
    	
Settlement   Procedures
    	
83
    
	
6.14
    	
Obligations   Several; Independent Nature of Lenders’ Rights
    	
84
    
	
6.15
    	
Bank   Products
    	
84
    
	
6.16
    	
Defaulting   Lenders
    	
85
    
	
6.17
    	
Cash   Collateral
    	
87
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
COLLATERAL REPORTING AND COVENANTS
    	
87
    
	
7.1
    	
Collateral   Reporting
    	
87
    
	
7.2
    	
Accounts   Covenants
    	
89
    
	
7.3
    	
Inventory   Covenants
    	
89
    
	
7.4
    	
Equipment   and Real Property Covenants
    	
90
    
	
7.5
    	
Power   of Attorney
    	
91
    
	
7.6
    	
Right   to Cure
    	
91
    
	
7.7
    	
Access   to Premises
    	
92
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
REPRESENTATIONS AND WARRANTIES
    	
92
    
	
8.1
    	
Existence,   Power and Authority
    	
92
    
	
8.2
    	
Name;   State of Organization; Chief Executive Office; Collateral Locations
    	
93
    
	
8.3
    	
Financial   Statements; No Material Adverse Effect
    	
93
    
	
8.4
    	
Priority   of Liens; Title to Properties
    	
93
    
	
8.5
    	
Tax   Returns
    	
94
    
	
8.6
    	
Litigation
    	
94
    
	
8.7
    	
Compliance   with Other Agreements and Applicable Laws
    	
94
    
	
8.8
    	
Environmental   Compliance
    	
94
    
	
8.9
    	
Employee   Benefits
    	
95
    
	
8.10
    	
Bank   Accounts
    	
96
    
	
8.11
    	
Intellectual   Property
    	
96
    
	
8.12
    	
Subsidiaries;   Affiliates; Capitalization; Solvency
    	
97
    
	
8.13
    	
Labor   Disputes
    	
97
    
	
8.14
    	
Restrictions   on Subsidiaries
    	
97
    
	
8.15
    	
Material   Contracts
    	
98
    
	
8.16
    	
Payable   Practices
    	
98
    
	
8.17
    	
OFAC
    	
98
    
	
8.18
    	
Accuracy   and Completeness of Information
    	
98
    
	
8.19
    	
Survival   of Warranties; Cumulative
    	
98
    
	
8.20
    	
Compliance   with FCPA
    	
98
    
	
8.21
    	
Anti-Terrorism   Laws
    	
99
    
	
8.22
    	
Regulation   H
    	
99
    
	
8.23
    	
Insurance
    	
99
    
	
8.24
    	
Brokers’   Fees
    	
99
    
	
8.25
    	
Use   of Proceeds
    	
99
    
	
8.26
    	
Margin   Regulations
    	
99
    
	
8.27
    	
Investment   Company Act; etc.
    	
99
    
	
8.28
    	
Designation   as Senior Debt
    	
99
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
AFFIRMATIVE COVENANTS
    	
100
    
	
9.1
    	
Maintenance   of Existence
    	
100
    
	
9.2
    	
New   Collateral Locations
    	
101
    
	
9.3
    	
Compliance   with Laws, Regulations, Etc.
    	
101
    

 

 

	
9.4
    	
Payment   of Taxes and Claims
    	
102
    
	
9.5
    	
Insurance
    	
102
    
	
9.6
    	
Financial   Statements and Other Information
    	
103
    
	
9.7
    	
Compliance   with ERISA
    	
106
    
	
9.8
    	
End   of Fiscal Years; Fiscal Quarters
    	
107
    
	
9.9
    	
License   Agreements
    	
107
    
	
9.10
    	
Additional   Guaranties and Collateral Security; Further Assurances
    	
107
    
	
9.11
    	
[Reserved]
    	
109
    
	
9.12
    	
Costs   and Expenses
    	
109
    
	
9.13
    	
After   Acquired Real Property
    	
109
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
NEGATIVE COVENANTS
    	
110
    
	
10.1
    	
Sale   of Assets, Consolidation, Merger, Dissolution, Etc.
    	
110
    
	
10.2
    	
Encumbrances
    	
111
    
	
10.3
    	
Indebtedness
    	
111
    
	
10.4
    	
Investments
    	
115
    
	
10.5
    	
Restricted   Payments
    	
115
    
	
10.6
    	
Transactions   with Affiliates
    	
118
    
	
10.7
    	
Change   in Business
    	
119
    
	
10.8
    	
Limitation   of Restrictions Affecting Subsidiaries
    	
119
    
	
10.9
    	
Certain   Payments of Indebtedness, Etc.
    	
120
    
	
10.10
    	
Modifications   of Indebtedness, Organizational Documents and Certain Other Agreements
    	
121
    
	
10.11
    	
Inactive   Subsidiaries; Parent Holding Company
    	
122
    
	
10.12
    	
Sale   and Leasebacks
    	
122
    
	
10.13
    	
Designation   of Designated Senior Debt
    	
123
    
	
10.14
    	
Foreign   Assets Control Regulations, Etc.
    	
123
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
FINANCIAL COVENANT
    	
123
    
	
11.1
    	
Fixed   Charge Coverage Ratio
    	
123
    
	
11.2
    	
Cure   Rights
    	
123
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
EVENTS OF DEFAULT AND REMEDIES
    	
124
    
	
12.1
    	
Events   of Default
    	
124
    
	
12.2
    	
Remedies
    	
125
    
	
 
    	
 
    	
 
    
	
SECTION 13.
    	
JURY TRIAL WAIVER; OTHER WAIVERS; CONSENTS; GOVERNING   LAW
    	
128
    
	
13.1
    	
Governing   Law; Choice of Forum; Service of Process; Jury Trial Waiver
    	
128
    
	
13.2
    	
Waiver   of Notices
    	
129
    
	
13.3
    	
Amendments   and Waivers
    	
130
    
	
13.4
    	
Waiver   of Counterclaims
    	
132
    
	
13.5
    	
Indemnification
    	
132
    
	
 
    	
 
    	
 
    
	
SECTION 14.
    	
THE AGENTS
    	
133
    
	
14.1
    	
Appointment,   Powers and Immunities
    	
133
    
	
14.2
    	
Reliance   by Agents
    	
133
    
	
14.3
    	
Events   of Default
    	
134
    
	
14.4
    	
Agents   in Their Individual Capacity
    	
134
    
	
14.5
    	
Indemnification
    	
134
    
	
14.6
    	
Non-Reliance   on Agents and Other Lenders
    	
135
    

 

 

	
14.7
    	
Failure   to Act
    	
135
    
	
14.8
    	
Additional   Loans
    	
135
    
	
14.9
    	
Concerning   the Collateral and the Related Financing Agreements
    	
136
    
	
14.10
    	
Field   Audit, Examination Reports and other Information; Disclaimer by Lenders
    	
136
    
	
14.11
    	
Collateral   Matters
    	
136
    
	
14.12
    	
Agency   for Perfection
    	
138
    
	
14.13
    	
Agent   May File Proofs of Claim
    	
138
    
	
14.14
    	
Successor   Agent
    	
139
    
	
14.15
    	
Legal   Representation of Agent
    	
139
    
	
14.16
    	
Agent   Determinations
    	
139
    
	
14.17
    	
Other   Designations
    	
139
    
	
14.18
    	
Intercreditor   Agreement
    	
140
    
	
14.19
    	
Withholding   Tax
    	
140
    
	
 
    	
 
    	
 
    
	
SECTION 15.
    	
TERM OF AGREEMENT; MISCELLANEOUS
    	
140
    
	
15.1
    	
Term
    	
140
    
	
15.2
    	
Interpretative   Provisions
    	
141
    
	
15.3
    	
Notices
    	
143
    
	
15.4
    	
Partial   Invalidity
    	
144
    
	
15.5
    	
Confidentiality
    	
144
    
	
15.6
    	
Successors
    	
145
    
	
15.7
    	
Assignments;   Participations
    	
146
    
	
15.8
    	
Entire   Agreement
    	
149
    
	
15.9
    	
USA   Patriot Act
    	
149
    
	
15.10
    	
No   Advisory or Fiduciary Responsibility
    	
149
    
	
15.11
    	
Counterparts,   Etc.
    	
149
    

 

 

INDEX 
 TO
 EXHIBITS AND SCHEDULES

 

	
Exhibit A
    	
 
    	
Form of   Assignment and Acceptance
    
	
 
    	
 
    	
 
    
	
Exhibit B
    	
 
    	
Form of   Borrowing Base Certificate
    
	
 
    	
 
    	
 
    
	
Exhibit C
    	
 
    	
Information   Certificate
    
	
 
    	
 
    	
 
    
	
Exhibit D
    	
 
    	
Form of   Compliance Certificate
    
	
 
    	
 
    	
 
    
	
Exhibit E
    	
 
    	
Commitments
    
	
 
    	
 
    	
 
    
	
Exhibit F
    	
 
    	
Form of   ABL/Term Loan Intercreditor Agreement
    
	
 
    	
 
    	
 
    
	
Schedule 1.76
    	
 
    	
Existing Letters of   Credit
    

 

 

LOAN AND SECURITY AGREEMENT

 

This Loan and Security Agreement dated February 18, 2011 is entered into by and among Scranton Products, Inc., a Delaware corporation (“Scranton”), AZEK Building Products, Inc., a Delaware corporation (“AZEK”), Procell Decking Inc., a Delaware corporation (“Procell”, and together with Scranton and AZEK, and any Subsidiaries that may become parties hereto after the date hereof as borrowers, each individually a “Borrower” and collectively, “Borrowers” as hereinafter defined), CPG International Inc., a Delaware corporation (“Parent”), CPG International I Inc., a Delaware corporation (“CPG I”), Santana Products Inc., a Delaware corporation (“Santana”), CPG Sub I Corporation, a Delaware Corporation (“Sub I”), Vycom Corp., a Delaware corporation (“Vycom”) and Sanatec Sub I Corporation, a Delaware corporation (“Sanatec”, and together with Parent, CPG I, Santana, Sub I, Vycom, and any Subsidiaries that are not Foreign Subsidiaries that may become parties hereto after the date hereof as guarantors, each individually a “Guarantor” and collectively “Guarantors” as hereinafter defined), the parties hereto from time to time as lenders, whether by execution of this Agreement or an Assignment and Acceptance (each individually, a “Lender” and collectively, “Lenders” as hereinafter further defined), Wells Fargo Bank, National Association, in its capacity as issuing bank hereunder with respect to Letters of Credit (in such capacity, “Issuing Bank” as hereinafter further defined), Credit Suisse AG, Cayman Islands Branch, in its capacity as administrative agent for the Secured Parties (in such capacity, together with its successors and assigns, “Administrative Agent” as hereinafter further defined) and Wells Fargo Capital Finance, LLC, in its capacity as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns, “Collateral Agent” as hereinafter further defined).

 

W I T N E S S E T H:

 

WHEREAS, Borrowers and Guarantors have requested that Lenders provide a credit facility to Borrowers and each Lender is willing to (severally and not jointly) make such loans and provide such financial accommodations to Borrowers on a pro rata basis according to its Commitment (as defined below) on the terms and conditions set forth herein and in the other Financing Agreements (as defined below), Administrative Agent is willing to act as administrative agent for the Secured Parties, Collateral Agent is willing to act as collateral agent for the Secured Parties and the Issuing Bank is willing to issue Letters of Credit hereunder, in each case on the terms and conditions set forth herein and the other Financing Agreements;

 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.                                                    DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

 

1.1                                 “ABL Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

 

1.2                                 “Accounts” shall mean, as to each Borrower and Guarantor, all present and future rights of such Borrower or Guarantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information contained on or for use with the card.

 

 

1.3                                 “Acquired Business” shall have the meaning given such term in the definition of the term “Permitted Acquisitions” contained herein.

 

1.4                                 “Acquired Indebtedness” shall mean Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of Parent or at the time it merges or consolidates with the Parent or any of its Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of Parent or such acquisition, merger or consolidation; provided, that, any Indebtedness of such Person that is extinguished, redeemed, defeased (other than through covenant defeasance), retired or otherwise repaid at the time of or immediately upon consummation of the transaction pursuant to which such Person becomes a Subsidiary of Parent will not be Acquired Indebtedness.

 

1.5                                 “Adjusted Eurodollar Rate” shall mean, with respect to any Eurodollar Rate Loan for any Interest Period, an interest rate per annum equal to the product of (a) the London Interbank Offered Rate in effect for such Interest Period and (b) Statutory Reserves.  The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Statutory Reserves.

 

1.6                                 “Administrative Agent” shall mean Credit Suisse, in its capacity as administrative agent on behalf of the Secured Parties pursuant to the terms hereof and any replacement or successor administrative agent hereunder.

 

1.7                                 “AEA Group” shall mean, collectively, AEA Investors LLC, AEA Management (Cayman) Ltd., AEA Investors LP and their Affiliates.

 

1.8                                 “Affiliate” shall mean, with respect to a specified Person, any other Person (excluding any Subsidiary) which directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person.  For the purposes of this definition, the term “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power either (a) to vote ten (10%) percent or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies, whether through the ownership of Equity Interests, by agreement or otherwise.  Notwithstanding the foregoing, no Agent, Issuing Bank or Lender shall be deemed an Affiliate of Parent or any of its Subsidiaries solely by reason of the relationship created by the Financing Agreements. Furthermore, for purposes of Sections 8 and 10 (other than Section 10.6) hereof, neither the limited partners participating in the AEA Group’s investment programs nor any mezzanine or other debt investment funds managed by the AEA Group nor portfolio companies of the AEA Group shall constitute an Affiliate of Parent or any of its Subsidiaries.

 

1.9                                 “Agents” shall mean, collectively, the Administrative Agent and the Collateral Agent.

 

1.10                           “Agent Payment Account” shall mean such account of Administrative Agent as Administrative Agent may from time to time designate in writing to Borrower Agent as the Agent Payment Account for purposes of this Agreement and the other Financing Agreements.

 

1.11                           “Agreement” means this Loan and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

1.12                           “Applicable Margin” shall mean, with respect to Base Rate Loans and Eurodollar Rate Loans, the applicable percentage (on a per annum basis) set forth below based on the Quarterly Average Excess Availability for the immediately preceding calendar quarter.

 

2

 

	
Tier
    	
 
    	
Quarterly Average
   Excess Availability
    	
 
    	
Applicable
   Eurodollar
   Rate Margin
    	
 
    	
Applicable
   Base
   Rate Margin
    	
 
    
	
1
    	
 
    	
Greater than 66-2/3%   of Maximum Credit
    	
 
    	
2.25
    	
%
    	
1.25
    	
%
    
	
2
    	
 
    	
Greater than 33-1/3%   and less than or equal to 66-2/3% of Maximum Credit
    	
 
    	
2.50
    	
%
    	
1.50
    	
%
    
	
3
    	
 
    	
Less than or equal   to 33-1/3% of Maximum Credit
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    

 

provided, that, (i) the Applicable Margin shall be calculated and established once every three (3) months and shall remain in effect until adjusted for the next three (3) month period, (ii) each adjustment of the Applicable Margin shall be effective as of the first day of each such three (3) month period based on the Quarterly Average Excess Availability for the immediately preceding three (3) month period, and (iii) the Applicable Margin through  June 30, 2011 shall be the amount for Tier 2  set forth above. In the event that at any time after the end of any three (3) month period the Quarterly Average Excess Availability for such three (3) month period used for the determination of the Applicable Margin was less than the actual amount of the Quarterly Average Excess Availability for such period as a result of the inaccuracy of information provided by or on behalf of Borrowers to either Agent for the calculation of Excess Availability, the Applicable Margin for such prior period shall be adjusted to the applicable percentage based on such actual Quarterly Average Excess Availability and any additional interest for the applicable period as a result of such recalculation shall be promptly paid to Administrative Agent.  The foregoing shall not be construed to limit the rights of Agents and Lenders with respect to the amount of interest payable after a Default or Event of Default whether based on such recalculated percentage or otherwise.

 

1.13                           “Approved Fund” shall mean any Person (other than a natural Person), including, without limitation, any special purpose entity, that is (or will be) engaged in making, purchasing, holding or otherwise investing in bank revolving loans and similar extensions of credit in the ordinary course of its business; provided, that, such Approved Fund must be administered 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.

 

1.14                           “Arrangers” shall mean, collectively, Credit Suisse Securities (USA) LLC, UBS Securities LLC and Wells Fargo Capital Finance, LLC, in their respective capacities as joint lead arrangers and joint bookrunners.

 

1.15                           “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Administrative Agent in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of Section 15.7 hereof.

 

1.16                           “AZEK Companies” shall mean, collectively, the following (together with their respective successors and assigns):  . AZEK, Procell, and any other Person that is a Borrower after the date hereof that engages in a line of business substantially similar to, or ancillary or related to, or used or useful to, the businesses that AZEK and Procell are engaged in on the date hereof; sometimes being referred to herein individually as an “AZEK Company”.

 

1.17                           “Bank Product Provider” shall mean any Agent, Arranger, Lender or Affiliate of any such Person that provides any Bank Products to Borrowers or Guarantors.

 

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1.18                           “Bank Products” shall mean any one or more of the following types or services or facilities provided to a Borrower or Guarantor by a Bank Product Provider: (a) credit cards, debit cards or stored value cards or the processing of payments and other administrative services with respect to credit cards, debit cards or stored value cards or (b) cash management or related services, including (i) the automated clearinghouse transfer of funds for the account of a Borrower or Guarantor pursuant to agreement or overdraft for any accounts of such Borrower or Guarantor maintained at any Bank Product Provider that are subject to the control of Collateral Agent pursuant to any Deposit Account Control Agreement to which such Bank Product Provider is a party, as applicable, and (ii) controlled disbursement services and (iii) Hedge Agreements if and to the extent permitted hereunder.

 

1.19                           “Base Rate” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted Eurodollar 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 1.00%; provided that, for the avoidance of doubt, the Adjusted Eurodollar Rate for any day shall be based on the rate determined on such day at approximately 11 a.m. (London time) by reference to the British Bankers’ Association Interest Settlement Rates for deposits in US Dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized vendor for the purpose of displaying such rates).  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the Adjusted Eurodollar Rate shall be effective on the effective date of such change in the Prime Rate, the Federal Funds Rate or the Adjusted Eurodollar Rate, as the case may be.

 

1.20                           “Base Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Base Rate in accordance with the terms hereof.

 

1.21                           “Borrower Agent” shall mean CPG I in its capacity as Borrower Agent on behalf of itself and the other Borrowers and Guarantors pursuant to Section 6.10 hereof and its successors and assigns in such capacity.

 

1.22                           “Borrowers” shall have the meaning set forth in the preamble hereto and include any other Person that at any time after the date hereof becomes a Borrower; each sometimes being referred to herein individually as a “Borrower”.

 

1.23                           “Borrowing Base” shall mean, at any time, the amount equal to:

 

(a)                                  the amount equal to:

 

(i)                                     eighty-five (85%) percent multiplied by the amount of Eligible Accounts of the AZEK Companies; plus

 

(ii)                                  the lesser of (A) seventy (70%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of resin that is not Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(iii)                               the lesser of (A) the sum of (1) sixty (60%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of raw materials (other than resin or blended or re-grinded raw materials) and (2) sixty-five (65%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of finished goods (in each case that is not Eligible Domestic In-Transit Inventory) or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

4

 

(iv)                              the lesser of (A) sixty (60%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of blended or re-grinded raw materials that is not Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(v)                                 the lesser of (A) sixty (60%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(vi)                              so long as the EBITDA of Parent and its Subsidiaries is not less than $35,000,000 for the Last Twelve Month Period immediately prior the commencement of, and during such period, then during the period from February 1 of each year to and including May 31 of such year, the lesser of (A) $5,000,000 or (B) the sum of: (1) five (5%) percent multiplied by the amount of Eligible Accounts of the AZEK Companies, plus (2) the lesser of (aa) five (5%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of resin (that is not Eligible Domestic In-Transit Inventory) or (bb) five (5%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory, plus (3) the lesser of (aa) five (5%) percent multiplied by the Value of Eligible Inventory of the AZEK Companies consisting of raw materials (other than resin) and finished goods inventory (in each case that is not Eligible Domestic In-Transit Inventory) or (bb) five (5%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; minus

 

(vii)                           Reserves attributable to the AZEK Companies; plus

 

(b)                                 the amount equal to:

 

(i)                                     eighty-five (85%) percent multiplied by the amount of Eligible Accounts of the Scranton Companies; plus

 

(ii)                                  the lesser of (A) seventy (70%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of resin that is not Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(iii)                               the lesser of (A) the sum of (1) sixty (60%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of raw materials (other than resin or blended or re-grinded raw materials) and (2) sixty (60%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of finished goods (in each case that is not Eligible Domestic In-Transit Inventory) or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(iv)                              the lesser of (A) sixty (60%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of blended or re-grinded raw materials that is not Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

(v)                                 the lesser of (A) sixty (60%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of Eligible Domestic In-Transit Inventory or (B) eighty-five (85%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; plus

 

5

 

(vi)                              so long as the EBITDA of Parent and its Subsidiaries is not less than $35,000,000 for the Last Twelve Month Period immediately prior the commencement of, and during such period, then during the period from July 1 of each year to and including October 31 of such year, the lesser of (A) $5,000,000 or (B) the sum of: (1) five (5%) percent multiplied by the amount of Eligible Accounts of the Scranton Companies, plus (2) the lesser of (aa) five (5%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of resin (that is not Eligible Domestic In-Transit Inventory) or (bb) five (5%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory, plus the lesser of (aa) five (5%) percent multiplied by the Value of Eligible Inventory of the Scranton Companies consisting of raw materials (other than resin) and finished goods inventory (in each case that is not Eligible Domestic In-Transit Inventory) or (bb) five (5%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory; minus

 

(vii)                           Reserves attributable to the Scranton Companies.

 

1.24                           “Borrowing Base Certificate” shall mean a certificate substantially in the form of Exhibit B hereto, as such form, subject to the terms hereof, may from time to time be modified by Agents, which is duly completed (including all schedules thereto) and executed by the chief executive officer, chief financial officer, controller or other appropriate financial officer of Borrower Agent reasonably acceptable to Agents and delivered to Agents.

 

1.25                           “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the laws of the State of New York or the State of Pennsylvania, and a day on which Agents are open for the transaction of business, except that if a determination of a Business Day shall relate to any Eurodollar Rate Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in dollar deposits in the London interbank market.

 

1.26                           “Capital Expenditures” shall mean with respect to any Person for any period the aggregate of all expenditures by such Person and its Subsidiaries made during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed and including all Capitalized Lease Obligations paid or payable during such period, other than the interest component of any Capitalized Lease Obligation (without duplication as to any period).  No expenditures for assets purchased as part of a Permitted Acquisition will constitute Capital Expenditures for purposes hereof.

 

1.27                           “Capital Lease” shall mean any leasing or similar arrangement which, in accordance with GAAP is classified as a capital lease.

 

1.28                           “Capital Stock” shall mean all common stock or preferred stock, whether voting or non-voting.

 

1.29                           “Capitalized Lease Obligations” shall mean, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date on a balance sheet prepared in accordance with GAAP.

 

1.30                           “Cash Collateralize” shall mean to pledge and deposit with or deliver to the Collateral Agent, for the benefit of one or more of the Issuing Bank or Lenders, as collateral for Letter of Credit Obligations or obligations of Lenders to fund participations in respect of Letter of Credit Obligations, cash or deposit account balances or, if the Administrative Agent and Issuing Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to

 

6

 

the Administrative Agent, Collateral Agent and the Issuing Bank.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

1.31                           “Cash Dominion Event” shall mean a period either (a) commencing on the date that an Event of Default shall exist or have occurred and be continuing and ending on the date that such Event of Default ceases to exist or be continuing or (b) commencing on the date that the aggregate amount of the Excess Availability has been less than $7,500,000 for more than three (3) consecutive Business Days and ending on the date that such Excess Availability has been greater than such amount for each day of any ninety (90) consecutive day period thereafter unless and until Excess Availability shall thereafter be less than $7,500,000 for more than three (3) consecutive Business Days; provided, that, a Cash Dominion Event shall not be terminated following the second (2nd) such termination in any twelve (12) consecutive month period, unless Excess Availability has been greater than such amount for each day of any one hundred twenty (120) consecutive day period thereafter.

 

1.32                           “Cash Equivalents” shall mean (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (b) marketable direct obligations issued by any state, commonwealth or territory of the United States of America or any political subdivision of any such state, commonwealth or territory or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having an investment grade rating from either S&P or Moody’s; (c) commercial paper or other indebtedness maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then an equivalent rating from another nationally recognized rating service); (d) certificates of deposit, time deposits and Eurodollar time deposits or bankers’ acceptances maturing within one year from the date of acquisition thereof and overnight bank deposits issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000 in the case of domestic banks and $500,000,000 (or the dollar equivalent thereof) in the case of foreign banks; (e) repurchase obligations for underlying securities of the types described in clauses (a), (b) and (d) above entered into with any bank meeting the qualifications specified in clause (iv) above or securities dealers of recognized national standing; (f) United States dollars, euros, pounds sterling and local currencies held by Foreign Subsidiaries from time to time in the ordinary course of business; (g) in the case of any investment by a Foreign Subsidiary or investments made in a country outside the United States of America, “Cash Equivalents” will also include: (i) direct obligations of the sovereign nation (or any agency thereof) in which such Foreign Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or agency thereof) and (ii) other customarily utilized high-quality investments in the country where such Subsidiary is located or in which such investment is made; and (h) investments in money market funds or shares of investment companies that are registered under the Investment Company Act of 1940 that invest substantially all their assets in securities of the types described in clauses (a) through (g) above. Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (a), (b) and (f) above, provided, that, such amounts are converted into any currency listed in clauses (a), (b) and (f) above, as promptly as practicable and in any event within ten (10) Business Days following the receipt of such amounts.

 

1.33                           “Cash Management Accounts” shall have the meaning set forth in Section 6.6 hereof.

 

1.34                           “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption 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 or application thereof by any Governmental

 

7

 

Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided  that notwithstanding anything herein to the contrary, any requests, rules, regulations, guidelines or directives thereunder or issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act after the Closing Date shall be deemed to be a “Change in Law”.

 

1.35                           “Change of Control” shall mean the occurrence of any of the following events: (a) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of Parent’s assets (determined on a consolidated basis for Parent and its Subsidiaries) to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with the provisions of this Agreement), other than to the AEA Group and the Management Group; (b) the approval by the holders of Equity Interests of Parent or any Borrower, as the case may be, of any plan or proposal for the liquidation or dissolution of Parent or such Borrower, respectively (whether or not otherwise in compliance with the provisions of this Agreement); (c) any Person or Group, other than the AEA Group and the Management Group, shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than fifty (50%) percent of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Parent; (d) the replacement of a majority of the board of directors of Parent over a two-year period from the directors who constituted the board of directors of Parent at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of Parent then still in office who either were members of any such board of directors at the beginning of such period or whose election as a member of any such board of directors was previously so approved; or (e) Parent at any time ceases to own, directly or indirectly, one hundred (100%) percent of the Equity Interests of any Borrower.

 

1.36                           “Closing Date” shall mean the date of this Agreement.

 

1.37                           “Code” shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

 

1.38                           “Collateral” shall have the meaning set forth in Section 5 hereof.

 

1.39                           “Collateral Access Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agents, from any lessor of premises to any Borrower or Guarantor or any other person to whom any Collateral is consigned or who has custody, control or possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral is located, in favor of Collateral Agent (and if applicable, Collateral Agent under and as defined in the Term Loan Agreement) with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, consignee or other person.

 

1.40                           “Collateral Agent” shall mean Wells Fargo Capital Finance, LLC, in its capacity as collateral agent on behalf of the Secured Parties pursuant to the terms hereof and any replacement or successor collateral agent hereunder.

 

1.41                           “Commitment” shall mean at any time, as to each Lender, the principal amount set forth next to such Lender’s name on Exhibit E hereto or in the Assignment and Acceptance Agreement pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 15.7 hereof, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as “Commitments”.

 

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1.42                           “Concentration Accounts” shall mean, collectively, the deposit accounts of the Borrowers and Guarantors identified on Schedule 8.10 of the Information Certificate as the concentration accounts and such other accounts as may be established after the date hereof in accordance with the terms hereof used to receive funds from the Cash Management Accounts; sometimes being referred to herein individually as a “Concentration Account”.

 

1.43                           “Consolidated EBITDA” shall mean, for any period, the sum (without duplication) of: (a) Consolidated Net Income for such period; plus (b) to the extent Consolidated Net Income has been reduced thereby, (i) all income taxes of Parent and its Subsidiaries paid or accrued in accordance with GAAP for such period, (ii) Interest Expense for such period, (iii) Consolidated Non-cash Items for such period less any non-cash items increasing Consolidated Net Income for such period, all as determined on a consolidated basis for Parent and its Subsidiaries in accordance with GAAP, (iv) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued), and (v) (A) up to $1,500,000 each year payable to the AEA Group pursuant to the first paragraph of Section 2 of the Management Agreement (as in effect on the date hereof), (B) any transactional fees payable to the AEA Group pursuant to such Management Agreement and (C) reasonable expenses payable to the AEA Group pursuant to such Management Agreement (provided, that, the aggregate amounts for purposes of clauses (B) and (C) of this subsection (v) shall not exceed $1,500,000 each year), minus (c) all cash payments made during such period on account of reserves, restructuring charges and other non-cash items added pursuant to clause (b)(iii) above in a previous period.

 

1.44                           “Consolidated Net Income” shall mean, with respect to Parent and its Subsidiaries for any period, the aggregate net income (or loss) of Parent and its Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided, that, there shall be excluded therefrom, without duplication: (a) after-tax gains or losses from asset sales or abandonment or reserves relating thereto; (b) after-tax extraordinary gains or losses; (c) and any unusual non-recurring charges (including severance, relocation costs and one-time compensation charges and including restructuring charges or reserves including costs related to closure of facilities), provided that the amount excluded pursuant to this clause (c) in any twelve-month period shall not exceed 7.5% of Consolidated EBITDA for such twelve-month period; (d) the cumulative effect of a change in accounting principles; (e) the net income of any Person, other than Parent or a Subsidiary, except to the extent of cash dividends or distributions paid to Parent or to its Subsidiary by such Person; (f) in the case of a successor to Parent or any Borrower by consolidation or merger or as a transferee of the assets of Parent or such Borrower, as the case may be, any net income of the successor corporation prior to such consolidation, merger or transfer of assets; (g) the amortization of any premiums, fees or expenses incurred in connection with any Permitted Acquisition by Parent or any of its Subsidiaries of assets or Capital Stock or any amounts required or permitted by Accounting Principles Board Opinions Nos. 16 (including non-cash write-ups and non-cash charges relating to inventory and fixed assets, in each case arising in connection with such acquisition) and 17 (including non-cash charges relating to intangibles and goodwill) to be recorded on Parent’s consolidated balance sheet, in each case in connection with such Permitted Acquisitions; (h) any non-cash compensation charge arising from the grant of or issuance of stock, stock options or other equity based awards; (i) unrealized gains and losses with respect to Hedging Agreements or other derivative instruments pursuant to FASB 133, “Accounting for Derivative Instruments and Hedging Activities”, or otherwise; (j) any non-cash impact attributable to the application of the purchase method of accounting in accordance with GAAP, including, without limitation, the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write-up of assets for such period on a consolidated basis in accordance with GAAP to the extent such non-cash expense results from such purchase accounting adjustments; (k) fees, costs and expenses incurred by Parent or any of its Subsidiaries during any period in connection with any acquisition, any other Investment permitted by Section 10.4, disposition or retirement, refinancing, issuance or incurrence of Indebtedness by Parent or any of its Subsidiaries or an equity issuance or offering (including the IPO) by Parent (or any of its direct or indirect parents) or its Subsidiaries (including, without limitation, in each case, amortization of debt issuance

 

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costs, debt discount or premium and other financing fees and expenses directly relating thereto and write-offs of any debt issuance costs relating to Indebtedness being retired or repaid in connection with such acquisition, other Investment, disposition, retirement, refinancing, offering, issuance or incurrence, as well as bonus payments paid to employees in connection with such acquisition, other Investment, disposition, retirement, refinancing, offering, issuance or incurrence), regardless of whether such acquisition, other Investment, disposition, retirement, refinancing, offering, issuance or incurrence has in fact been consummated; (l) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Agreements or other derivative instruments or amortization or write-off of deferred financing fees and any expenses of bridge or other financing fees; (m) any impairment charge or asset write-off pursuant to Financial Accounting Standards Board Statement No. 142 and No. 144 and the amortization of intangibles arising pursuant to No. 141 and (n) the income of any Subsidiary that is not a Borrower or Guarantor to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary.

 

1.45                           “Consolidated Non-cash Items” shall mean, for any period, the aggregate depreciation, amortization and all other non-cash expenses of Parent (including, without limitation, charges related to the impairment of intangibles) and its Subsidiaries reducing Consolidated Net Income of Parent and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (including deferred rent but excluding any such charge which requires an accrual of or a reserve for cash charges for any period).

 

1.46                           “Consolidated Total Assets” shall mean, as of any date, the total assets of Parent and its consolidated Subsidiaries, determined in accordance with GAAP, as set forth on the consolidated balance sheet of Parent as of such date.

 

1.47                           “Control Agent” shall have the meaning provided in the Intercreditor Agreement.

 

1.48                           “Control Collateral” shall have the meaning provided in the Intercreditor Agreement.

 

1.49                           “Credit Facility” shall mean the Loans and Letters of Credit provided to or for the benefit of any Borrower pursuant to Sections 2.1 and 2.3 hereof.

 

1.50                           “Credit Suisse” shall mean Credit Suisse AG, Cayman Islands Branch and its successors.

 

1.51                           “Default” shall mean an act, condition or event which with notice or passage of time or both would constitute an Event of Default.

 

1.52                           “Defaulting Lender” shall mean, subject to Section 6.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower Agent in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (which conditions precedent, together with the applicable default, if any, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Bank or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower Agent, the Administrative Agent or any Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lenders’ obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with the applicable default, if any, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the

 

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Borrower Agent, to confirm in writing to the Administrative Agent and the Borrower Agent that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a bankruptcy or insolvency proceeding, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 6.16(b)) upon delivery of written notice of such determination to the Borrower Agent, each Issuing Bank and each Lender.

 

1.53                           “Deposit Account Control Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agents, by and among Collateral Agent (and if applicable, the Term Loan Collateral Agent or the Control Agent), any Borrower or any Guarantor that is the customer of the bank with respect to a deposit account at such bank and such bank, which, if required hereunder, is sufficient to perfect the security interests of Collateral Agent therein and provides such other rights with respect thereto as Agents require.

 

1.54                           “Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof) or upon the happening of any event or condition:

 

(a)                                  matures or is mandatorily redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;

 

(b)                                 is convertible or exchangeable at the option of the holder thereof for Indebtedness or Equity Interests (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interest and cash in lieu of fractional shares of such Equity Interests); or

 

(c)                                  is redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interest and cash in lieu of fractional shares of such Equity Interests) or is required to be repurchased by such Person or any of its Affiliates, in whole or in part, at the option of the holder thereof;

 

in each case, on or prior to the date that is six (6) months after the Maturity Date; provided, that, an Equity Interest that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Equity Interest upon the occurrence of an “asset sale” or a “change of control” shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after repayment in full in cash of all of the Obligations, the cancellation or expiration of all Letters of Credit and the termination of the Commitments.

 

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1.55                           “Documentation Agents” shall mean, collectively, UBS Securities LLC and Wells Fargo Capital Finance, LLC, in their respective capacities as co-documentation agents with respect to the Credit Facility.

 

1.56                           “Eligible Accounts” shall mean Accounts created by a Borrower or Guarantor that in each case at the time of creation and at all times thereafter satisfy the criteria set forth below as determined by Collateral Agent in its Permitted Discretion.  Without limiting Agents’ discretion provided herein, Eligible Accounts shall not include any Account:

 

(a)                                  which is not subject to a first priority perfected security interest in favor of Collateral Agent;

 

(b)                                 which is subject to any security interest, lien or other encumbrance other than the security interest and lien of Collateral Agent and those permitted in clauses (b), (c) and (j) of the definition of the term Permitted Liens (but as to liens referred to in clause (j) only to the extent that Agents have established a Reserve as provided therein) and any other liens permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Agents between the holder of such security interest or lien and Collateral Agent;

 

(c)                                  which is unpaid more than ninety (90) days after the original invoice date (provided that as to Accounts with a due date greater than thirty (30) days from the invoice date thereof, up to $3,000,000 of which are unpaid more than ninety (90) days after the original invoice date, but less than one hundred twenty (120) days after the original invoice date, may be included as Eligible Accounts), or which has been written off the books of such Person or otherwise designated as uncollectible;

 

(d)                                 which is owing by an account debtor for which more than fifty (50%) percent of the Accounts owing by such account debtor and its Affiliates are ineligible under paragraph (c) above;

 

(e)                                  which is owing by an account debtor to the extent the aggregate amount of Eligible Accounts owing by such account debtor and its Affiliates to (A) a Borrower and its Subsidiaries, taken as a whole, exceeds fifteen (15%) percent of the aggregate amount of Eligible Accounts thereof or (B) Borrowers and their Subsidiaries, taken as a whole, exceeds fifteen (15%) percent of the aggregate amount of Eligible Accounts thereof, except, that, at Collateral Agent’s Permitted Discretion, the foregoing fifteen (15%) percent amounts may be increased to (1) thirty-five (35%) percent from February 1 through and including May 31 of each year with respect only to accounts receivable from The Parksite Group, subject to a maximum of $25,000,000 at any time outstanding, (2) twenty (20%) from February 1 through and including May 31 of each year with respect only to accounts receivable from Boston Cedar, subject to a maximum of $15,000,000 at any time outstanding and (3) twenty (20%) percent with respect to the accounts receivable from such other account debtors as Collateral Agent may determine, in the case of each of clauses (1), (2) and (3) above, subject to the receipt by Collateral Agent from Borrower Agent of satisfactory quarterly summary financial information with respect to liquidity and such other matters concerning such account debtors as Collateral Agent may require;

 

(f)                                    with respect to which any covenant, representation, or warranty contained in this Agreement or in the other Financing Agreements has been breached or is not true in any material respect;

 

(g)                                 which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to Collateral Agent in its Permitted Discretion and which has been sent to the account debtor, (iii) represents a progress billing, (iv) is contingent upon such Person’s or its Affiliates’ completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,

 

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consignment, cash-on-delivery or any other repurchase or return basis,  (vi) relates to payments of interest or (vii) has been invoiced more than once;

 

(h)                                 with respect to which any check or other instrument of payment has been returned uncollected for any reason;

 

(i)                                     which is owed by an account debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, interim receiver, receiver-manager, custodian, trustee, or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, interim receiver, receiver-manager, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state, provincial, territorial or federal bankruptcy laws (other than post-petition accounts payable of an account debtor that is a debtor-in-possession under the US Bankruptcy Code and reasonably acceptable to Collateral Agent in its Permitted Discretion), (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

 

(j)                                     which is owed by any account debtor that has sold all or substantially all its assets (unless such Account has been assumed by a Person that shall have acquired such assets and otherwise satisfies the requirements set forth in this definition);

 

(k)                                  which is owed by an account debtor that (i) does not maintain its chief executive office in the United States or Canada or (ii) is not organized under applicable law of the United States, any State of the United States, Canada, or any Province of Canada, unless, in either case, such Account is backed by a Letter of Credit reasonably acceptable to Collateral Agent and which has been assigned to and is directly drawable by Collateral Agent;

 

(l)                                     which is owed in any currency other than US Dollars or Canadian Dollars;

 

(m)                               which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the United States or Canada, unless such Account is backed by a Letter of Credit reasonably acceptable to Collateral Agent and which has been assigned to and is directly drawable by Collateral Agent, or (ii) the government of the United States or Canada, or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended, or the Financial Administration Act (Canada), as amended, as applicable, and any other steps necessary to perfect the security interest and lien of Collateral Agent in such Account have been complied with to Collateral Agent’s reasonable satisfaction;

 

(n)                                 which is owed by any Affiliate, employee, officer, director or agent of any Borrower or Guarantor;

 

(o)                                 which, for any account debtor, exceeds any credit limit with respect to such account debtor determined by the applicable Borrower or Guarantor from time to time, and such credit limit is acceptable to Collateral Agent in its Permitted Discretion (and otherwise such credit limit as Collateral Agent may determine after notice and consultation with Borrower Agent), to the extent of such excess;

 

(p)                                 which is owed by an account debtor or any Affiliate of such account debtor to which any Borrower or Guarantor is indebted, but only to the extent of such indebtedness, or which is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an account debtor, in each case to the extent thereof;

 

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(q)                                 which is subject to any counterclaim, deduction, defense, setoff or dispute;

 

(r)                                    which is evidenced by or arising under any promissory note, lease, chattel paper, or instrument;

 

(s)                                  which is owed by an account debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Person to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Person has filed such report or qualified to do business in such jurisdiction;

 

(t)                                    with respect to which such Person has made any agreement with the account debtor for any reduction thereof (to the extent of such reduction), other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Person created a new receivable for the unpaid portion of such Account;

 

(u)                                 which does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, State, Provincial, territorial or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

 

(v)                                 which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports to indicate that any Person other than such Person has or has had an ownership interest in such goods, or which indicates any party other than such Person as payee or remittance party;

 

(w)                               which was created on cash on delivery terms; or

 

(x)                                   which Collateral Agent determines in its Permitted Discretion and after notice to Borrower Agent may not be paid by reason of the account debtor’s inability to pay.

 

The criteria for Eligible Accounts set forth above may only be changed and any new criteria for Eligible Accounts may only be established by Agents based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent that such event, condition or circumstance has not been identified by a Borrower to the field examiners of Collateral Agent prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts in any material respect as determined by Agents in the exercise of their Permitted Discretion.  Any such changes will be effective three (3) days after delivery of notice thereof to Borrower Agent.  The Agents will be available during such period to discuss any such proposed change with the Borrowers and, without limiting the right of the Agents to establish or change such eligibility criteria in the Agents’ Permitted Discretion, the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such change in eligibility criteria no longer exists, in a manner and to the extent reasonably satisfactory to the Agents.  Any Accounts that are not Eligible Accounts shall nevertheless be part of the Collateral.

 

1.57                           “Eligible Domestic In-Transit Inventory” shall mean Inventory that would otherwise be Eligible Inventory (other than for its location) that has been shipped from a location of any Borrower or Guarantor or from the manufacturer or wholesale distributor thereof within the United States for receipt at a location of any Borrower or Guarantor within the United States and permitted hereunder, within fifteen (15) days of shipment, but in either case, which has not yet been delivered to such Borrower or Guarantor, for which the purchase order is in the name of a Borrower or Guarantor, title has passed to such Borrower or Guarantor (and Agents have received such evidence thereof as they have requested) and which is insured in

 

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accordance with the terms of this Agreement; provided, that, the aggregate amount of Inventory constituting Eligible Domestic In-Transit Inventory for purposes of the calculation of the Borrowing Base at any time will not exceed $5,000,000.

 

1.58                           “Eligible Inventory” shall mean, as to each Borrower and Guarantor, Inventory of such Borrower or Guarantor consisting of raw materials and finished goods held for resale in the ordinary course of the business of such Borrower or Guarantor that satisfy the criteria set forth below as determined by Collateral Agent in its Permitted Discretion.  Eligible Inventory shall not include any Inventory:

 

(a)                                  which is not subject to a first priority perfected security interest in favor of Collateral Agent;

 

(b)                                 which is subject to any security interest, lien or other encumbrance other than the security interest and lien of Collateral Agent and those permitted in clauses (b), (c) and (j) of the definition of the term Permitted Liens (but as to liens referred to in clause (j) only to the extent that Agents have established a Reserve as provided therein) and any other liens permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Collateral Agent between the holder of such security interest or lien and Collateral Agent;

 

(c)                                  which is, in Collateral Agent’s Permitted Discretion, slow moving (with Inventory that has not been sold after a period of more than twelve (12) months being deemed to be slow moving for this purpose), obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;

 

(d)                                 with respect to which any covenant, representation, or warranty contained in this Agreement or any of the other Financing Agreements has been breached or is not true in any material respect or which does not conform to all standards imposed by any Governmental Authority;

 

(e)                                  in which any Person other than such Person shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

 

(f)                                    which constitutes spare or replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment (unless a Borrower or Guarantor retains title to such goods and such goods are fully insured) or goods which are not of a type held for sale in the ordinary course of business;

 

(g)                                 which is not located at premises owned or leased and controlled by any Borrower or Guarantor, except for Eligible Domestic In-Transit Inventory and Eligible LC Inventory and except as set forth in clause (i) below;

 

(h)                                 which is located in any location leased by such Person or its Affiliates unless (i) the lessor (and its mortgagee, if any) has delivered to Collateral Agent a Collateral Access Agreement that Collateral Agent has acknowledged in writing is reasonably acceptable to them or (ii) a Reserve for rent, charges, and other amounts due or to become due with respect to such facility has been established by Agents in their Permitted Discretion;

 

(i)                                     which is located in any third party warehouse or is in the possession of a bailee or is being processed offsite at a third party location or outside processor and, in any such case, is not evidenced

 

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by a Document, unless (i) such warehouseman or bailee or the owner of such third party location or such outside processor has delivered to Collateral Agent a Collateral Access Agreement that Collateral Agent has acknowledged in writing is reasonably acceptable to it and such other documentation as Collateral Agent may require or (ii) an appropriate Reserve has been established by Agents in their Permitted Discretion;

 

(j)                                     which is a discontinued product or component thereof and is not immediately usable in a continuing product;

 

(k)                                  which is the subject of a consignment by such Person as consignor (unless a Borrower or Guarantor retains title to such goods and such goods are fully insured);

 

(l)                                     which contains or bears any intellectual property rights licensed to such Person unless Collateral Agent is satisfied in its Permitted Discretion that Collateral Agent may sell or otherwise dispose of such Inventory without (i) infringing or otherwise violating the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

 

(m)                               which is not reflected in a current perpetual inventory report of such Person; or

 

(n)                                 for which reclamation rights have been asserted by the seller.

 

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only be established by Agents based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent that such event, condition or circumstance has not been identified by a Borrower or Guarantor to the field examiners of Collateral Agent prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory as determined by Agents in the exercise of their Permitted Discretion.  The Agents will be available during such period to discuss any such proposed change with the Borrowers and, without limiting the right of the Agents to establish or change such eligibility criteria in the Agents’ Permitted Discretion, the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such change in eligibility criteria no longer exists, in a manner and to the extent reasonably satisfactory to the Agents.  Any such changes will be effective three (3) days after delivery of notice thereof to Borrower Agent.  Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral.

 

1.59                           “Eligible LC Inventory” shall mean Inventory that would otherwise be Eligible Inventory (other than for its location) as to which: (i) the Inventory is purchased with and subject to a Letter of Credit issued hereunder, (ii) the Inventory is then in transit (whether by vessel, air or land) from a location outside of the continental United States of America to a location permitted hereunder and for which Collateral Agent shall have received such evidence thereof as Collateral Agent may reasonably require, (iii) the title of the Inventory has passed to, and such Inventory is owned by, a Borrower or Guarantor and for which Collateral Agent shall have received such evidence thereof as Collateral Agent may reasonably require, (iv) Collateral Agent has received each of the following: (A) a copy of the certificate of marine cargo insurance in connection therewith in which Collateral Agent has been named as an additional insured and loss payee in a manner reasonably acceptable to Collateral Agent and (B) a copy of the invoice, packing slip and manifest with respect thereto, (v) the Inventory is either (A) subject to a negotiable bill of lading: (1) that is consigned to the Issuing Bank (unless and until such time as Agents shall require that the same be consigned to Collateral Agent, then thereafter, that is consigned to Collateral Agent either directly or by means of endorsements), (2) that was issued by the carrier in respect of such Inventory and (3) is either in the possession of the customs broker, freight forwarder or other third party handling the shipping and delivery of

 

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such Inventory acting on behalf of Collateral Agent or the subject of a telefacsimile or other electronic copy that Agents have received from the Issuing Bank with respect to the Letter of Credit and as to which Agents have also received confirmation from such Issuing Bank that such document is in transit to Agents or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of Collateral Agent or (B) subject to a negotiable cargo receipt and is not the subject of a bill of lading (other than a negotiable bill of lading consigned to, and in the possession of a consolidator or Collateral Agent, or their respective agents) and such negotiable cargo receipt is (1) consigned to Issuing Bank (unless and until such time as Agents shall require that the same be consigned to Collateral Agent, then thereafter, that is consigned to Collateral Agent either directly or by means of endorsements), (2) issued by a consolidator in respect of such Inventory and (3) either in the possession of Collateral Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of Collateral Agent or the subject of a telefacsimile or other electronic copy that Agents have received from the Issuing Bank with respect to the Letter of Credit and as to which Agents have also received a confirmation from such Issuing Bank that such document is in transit to Collateral Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory, (vi) such Inventory is insured against types of loss, damage, hazards, and risks, and in amounts, reasonably satisfactory to Agents, and (vii) such Inventory shall not have been in transit for more than ninety (90) days.

 

1.60                           “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender and/or any Affiliate of such Lender which is at least fifty (50%) percent owned by such Lender or its parent company; (c) any person (whether a corporation, partnership, trust or otherwise) that is an Approved Fund; and (d) any other commercial bank, financial institution or “accredited investor” (as defined in Regulation D under the Securities Act), provided, that, neither any Borrower nor any Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an Eligible Transferee, except as Administrative Agent and Required Lenders may otherwise specifically agree; provided, further, that, a Defaulting Lender and its subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a subsidiary of a Defaulting Lender, shall not qualify as an Eligible Transferee; and provided, further, that, a natural person shall not qualify as an Eligible Transferee.

 

1.61                           “Engagement Letter” shall mean the engagement letter dated January 27, 2011 among Parent, the Arrangers and Wells Fargo Securities, LLC.

 

1.62                           “Environmental Laws” shall mean all foreign, Federal, State, Provincial and local laws (including common law), legislation, rules, codes, licenses, permits (including any conditions imposed therein), authorizations, binding judicial or administrative decisions, injunctions or agreements between any Borrower or Guarantor and any Governmental Authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety, (b)  relating to the exposure to, or the use, storage, recycling, treatment, generation, manufacture, processing, distribution, transportation, handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Materials as now or may at any time be in effect during the term of this Agreement.

 

1.63                           “Equipment” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s now owned and hereafter acquired equipment, wherever located, including machinery, data processing and computer equipment (whether owned or leased and including embedded software that is licensed as part of such computer equipment), vehicles, rolling stock, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.

 

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1.64                           “Equity Interests” shall mean, with respect to any Person, all of the shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity, ownership or profit interests at any time outstanding, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), but excluding any interests in phantom equity plans and any debt security that is convertible into or exchangeable for such shares, and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

1.65                           “ERISA” shall mean the Employee Retirement Income Security Act of 1974, together with all rules, regulations and interpretations thereunder or related thereto.

 

1.66                           “ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, any Guarantor or any of its or their respective Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

 

1.67                           “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which the requirement of notice has been waived in regulations by the Pension Benefit Guaranty Corporation; (b) the adoption of any amendment to a Pension Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;  (c) a complete or partial withdrawal by any Borrower, Guarantor or any ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit Guaranty Corporation to terminate a Pension Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or ERISA Affiliate in excess of $2,500,000.

 

1.68                           “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.

 

1.69                           “Event of Default” shall have the meaning specified in Section 12.1 hereof.

 

1.70                           “Excess Availability” shall mean the amount, as determined by Agents, calculated at any date, equal to: (a) the lesser of:  (i)  the Borrowing Base and (ii) the Maximum Credit (in each case under (i) or (ii) after giving effect to any applicable Reserves), plus (b) cash and Cash Equivalents of the Borrowers and Guarantors as of the date of determination, which are subject to a perfected security interest of the Collateral Agent pursuant to a Deposit Account Control Agreement and to no other Lien (other than Liens in favor of the Term Loan Collateral  Agent or the Control Agent, as applicable) minus, without duplication, (c) the sum of (i) the amount of all then outstanding and unpaid Obligations of the applicable Borrowers (excluding for this purpose any Obligations of a Borrower arising pursuant to any guarantees in favor of Agents and Lenders of the Obligations of the other Borrowers), plus (ii) the aggregate amount of all then outstanding and unpaid trade payables and other obligations of the applicable Borrowers in each case which are outstanding more than ninety (90) days past due as of the end of the immediately preceding month (other than trade payables or other obligations being contested or disputed by a Borrower in good faith).  For

 

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purposes of determining the outstanding trade payables in the ordinary course, Borrower Agent shall provide to Agents the summary reports of payables as set forth in Section 7.1(a) hereof, together with such other information with respect thereto as Agent may from time to time reasonably request.

 

1.71                           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, together with all rules, regulations and interpretations thereunder or related thereto.

 

1.72                           “Excluded Property” shall mean:

 

(a)                                  leased Real Property;

 

(b)                                 Real Property with a fair market value of less than (i) $1,000,000 for any individual property or (ii) $5,000,000 in the aggregate for all excluded Real Property other than any Real Property that is adjacent to, contiguous with or necessary or related to or used in connection with any Mortgaged Property;

 

(c)                                  motor vehicles subject to certificates of title in accordance with applicable State law;

 

(d)                                 any rights or interests in any contract, lease, permit, license, charter or license agreement covering real or personal property, as such, if under the terms of such contract, lease, permit, license, charter or license agreement, or applicable law with respect thereto, the valid grant of a security interest or lien therein to Collateral Agent is prohibited and such prohibition has not been or is not waived or the consent of the other party to such contract, lease, permit, license, charter or license agreement has not been or is not otherwise obtained or under applicable law such prohibition cannot be waived; provided, that, the foregoing exclusion shall in no way be construed (i) to apply if any such prohibition is unenforceable under Sections 9-406, 9-407, 9-408 or 9-409 of the UCC or other applicable law or (ii) so as to limit, impair or otherwise affect Collateral Agent’s unconditional continuing security interests in and liens upon any rights or interests of a Borrower or Guarantor in or to monies due or to become due under any such contract, lease, permit, license, charter or license agreement (including any Receivables);

 

(e)                                  any Equipment which is, or at the time of a Borrower’s or Guarantor’s acquisition thereof shall be, subject to a purchase money mortgage or other purchase money lien or security interest (including such interest giving rise to Capitalized Lease Obligations) permitted under clause (e) of the definition of the term Permitted Liens hereof if:  (i) the valid grant of a security interest or lien to Collateral Agent in such item of Equipment is prohibited by the terms of the agreement between such Borrower or Guarantor and the holder of such purchase money mortgage or other purchase money lien or security interest or under applicable law and such prohibition has not been or is not waived, or the consent of the holder of the purchase money mortgage or other purchase money lien or security interest has not been or is not otherwise obtained, or under applicable law such prohibition cannot be waived and (ii) the purchase money mortgage or other purchase money lien or security interest on such item of Equipment is or shall become valid and perfected;

 

(f)                                    the Capital Stock of any Foreign Subsidiary owned by another Foreign Subsidiary;

 

(g)                                 the Capital Stock of any Foreign Subsidiary owned directly by any Borrower or Guarantor in excess of sixty five (65%) percent of the total combined voting power of all of the issued and outstanding shares of Capital Stock of such Foreign Subsidiary entitled to vote (within the meaning of Treasury Regulation Section 1.956-2);

 

(h)                                 trademark or servicemark applications that have been filed with the U.S. Patent and Trademark Office on the basis of an “intent-to-use” with respect to such marks, unless and until a statement of use or amendment to allege use is filed or any other filing is made or circumstances otherwise change so

 

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that the interests of any Borrower or Guarantor in such applications is no longer on an “intent-to-use” basis, at which time such applications shall automatically and without further action by the parties be subject to the security interests and liens granted by Borrowers or Guarantors to Collateral Agent hereunder; and

 

(i)                                     assets as to which the Administrative Agent has reasonably determined that the costs of obtaining a security interest therein are excessive in relation to the value of the security to be afforded thereby.

 

1.73                           “Existing ABL Credit Agreement” shall mean the Loan and Security Agreement, dated as of February 13, 2008, by and among Parent, the Borrowers and the Guarantors, Wachovia Bank, National Association, as Administrative Agent, Wachovia Capital Markets, LLC, as Co-Lead Arranger and Co-Book Runner, General Electric Capital Corporation, as Syndication Agent, Co-Lead Arranger and Co-Book Runner and the lenders party hereto, as amended by the First Amendment thereto, dated as of February 29, 2008, and the Second Amendment thereto, dated as of July 22, 2010.

 

1.74                           “Existing Credit Agreements” shall mean the Existing ABL Credit Agreement and the Existing Term Credit Agreement.

 

1.75                           “Existing Term Credit Agreement” shall mean Term Loan and Security Agreement, dated as of February 29, 2008, by and among Parent, the Borrowers and the Guarantors, Wachovia Bank, National Association, as Administrative Agent, Wachovia Capital Markets, LLC, as Lead Arranger and Book Runner and the lenders party hereto, as amended by the First Amendment thereto, dated as of July 26, 2010.

 

1.76                           “Existing Letters of Credit” shall mean, collectively, the letters of credit issued for the account of a Borrower or Guarantor or for which such Borrower or Guarantor is otherwise liable listed on Schedule 1.76 of the Information Certificate.

 

1.77                           “FATCA”: Sections 1471 through 1474 of the Code and any present or future regulations promulgated thereunder and any present or future official interruptions thereof.

 

1.78                           “Federal Funds Rate” shall mean, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by it.

 

1.79                           “Financing Agreements” shall mean, collectively, this Agreement, the Pledge Agreement, the Guarantee and all notes, guarantees, security agreements, deposit account control agreements, investment property control agreements, intercreditor agreements and all other agreements, documents and instruments (including the Intercreditor Agreement) now or at any time hereafter executed and/or delivered by any Borrower or Guarantor in connection with this Agreement; provided, that, the Financing Agreements shall not include Secured Hedge Agreements.

 

1.80                           “Fixed Charge Coverage Ratio” shall mean, with respect to any date of determination, the ratio of (a) the amount equal to (i) Consolidated EBITDA of any Person and its Subsidiaries on a consolidated basis, as of the end of a fiscal month for the immediately preceding twelve (12) consecutive fiscal months for which Administrative Agent has received financial statements pursuant to Section 9.6 hereof, less (ii) the amount of Capital Expenditures of such Person and its Subsidiaries during such period to the extent not financed by Indebtedness permitted hereunder for such purpose, less (iii) all taxes paid by such

 

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person and its Subsidiaries in cash during such period, less (iv) all dividends, distributions, repurchases and redemptions in respect of Equity Interests of Parent paid by such Person and its Subsidiaries during such period in cash (but in the case of Parent and its Subsidiaries, excluding payments for the redemption of its Equity Interests under the terms of the Procell Unit Purchase Agreement to the extent permitted under Section 10.5(h) hereof) to (b) Fixed Charges of such Person and its Subsidiaries, on a consolidated basis, for such period.

 

1.81                           “Fixed Charges” shall mean, as to any Person and its Subsidiaries, on a consolidated basis, with respect to any period, the sum of, without duplication, (a) all Interest Expense paid in cash, plus (b) all regularly scheduled (as determined at the beginning of the respective period) principal payments of Indebtedness for borrowed money, Indebtedness for the deferred purchase price of any property or services, including, without limitation, any indemnification, adjustment of purchase price, earn-outs or other similar obligations incurred in connection with a Permitted Acquisition or Permitted Disposition (but excluding (i) the earn-outs required to be paid under the terms of the Procell Unit Purchase Agreement to the extent permitted under Section 10.9(b) and (ii) an account payable to a trade creditor (whether or not an Affiliate) incurred in the ordinary course of business of such Person and payable in accordance with customary trade practices), Indebtedness with respect to Capital Leases (and without duplicating in items (a) and (b) of this definition, the interest component with respect to Indebtedness under Capital Leases).  Notwithstanding the foregoing, the Fixed Charges of Parent and its Subsidiaries on a consolidated basis for each twelve (12) consecutive fiscal month period ending on a date on or prior to December 31, 2011 shall be deemed to be the product of (x) the Fixed Charges of Parent and its Subsidiaries for the period from February 1, 2011 to such ending date multiplied by (y) the quotient of twelve divided by the number of fiscal months in the period from February 1, 2011 to such ending date.

 

1.82                           “Flood Hazard Property” shall mean any Mortgaged Property that is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

 

1.83                           “Foreign Lender” shall mean any Lender or Issuing Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code).

 

1.84                           “Foreign Subsidiary” shall mean a Subsidiary of Parent that is organized or incorporated under the laws of any jurisdiction outside of the United States of America that is treated as a corporation for U.S. federal income tax purposes and any direct or indirect Subsidiary of a Foreign Subsidiary; sometimes being referred to herein collectively as “Foreign Subsidiaries”.

 

1.85                           “GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently applied, except that, unless otherwise agreed by Administrative Agent, for purposes of Section 11 hereof, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements delivered to Administrative Agent prior to the date hereof, subject, however, in the case of determination of compliance with the financial covenants in Section 11, to the provisions of Section 15.2(h) hereof.

 

1.86                           “Governmental Authority” shall mean any nation or government, any state, province, or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

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1.87                           “Guarantee” shall mean the guarantee dated as of the Closing Date executed by the Guarantors in favor of Administrative Agent, for the benefit of the Secured Parties.

 

1.88                           “Guarantors” shall have the meaning set forth in the preamble hereto and include any other Person other than a Foreign Subsidiary that any time after the date hereof becomes a Guarantor; each sometimes being referred to herein individually as a “Guarantor”.

 

1.89                           “Guaranty Obligations” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, keep-well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (c) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

 

1.90                           “Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and including any other substances, materials or wastes that are or become regulated under any Environmental Law (including any that are or become classified as hazardous or toxic under any Environmental Law).

 

1.91                           “Hedge Agreement” shall mean a swap agreement as such term is defined in 11 U.S.C. Section 101, and including any rate swap agreement, basis swap, forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option, and any other similar agreement (including any option to enter into any of the foregoing or a master agreement for any the foregoing together with all supplements thereto) entered into for the purpose of protecting against or managing exposure to fluctuations in interest or exchange rates, currency valuations or commodity prices; sometimes being collectively referred to herein as “Hedge Agreements”.

 

1.92                           “Inactive Subsidiary” shall mean, collectively, (a) each Subsidiary of Parent listed on Schedule 1.92 to the Information Certificate and (b) a Subsidiary of Parent (other than a Borrower) designated in writing by Borrower Agent to Agents after the date hereof as an Inactive Subsidiary and agreed to by Agents, provided, that, (i) such Subsidiary so designated after the date hereof shall only be considered an Inactive Subsidiary to the extent that the representations with respect thereto set forth in Section 8.12(e) hereof are true and correct with respect thereto and Agents shall have received such evidence thereof as they may reasonably require and (ii) such Subsidiaries are sometimes referred to herein collectively as “Inactive Subsidiaries”.

 

1.93                           “Indebtedness” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds,

 

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debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid or accrued, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person which are due six (6) months or more from the date after such property is acquired or such services are completed, and including, without limitation, customary indemnification, adjustment of purchase price or similar obligations, earn-outs or other similar obligations, in each case, incurred in connection with a Permitted Acquisition or Permitted Disposition (but excluding trade debt and accrued expenses incurred in the ordinary course of business on normal trade terms and not overdue by more than ninety (90) days) which would appear as liabilities on a balance sheet of such Person in accordance with GAAP, (f) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (g) 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 security interest in, lien or other encumbrance upon, or payable out of the proceeds of production from property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (h) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (i) the principal portion of all Capitalized Lease Obligations of such Person, (j) all obligations of such Person under Hedge Agreements, (k) the maximum amount of all standby letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (l) all preferred Equity Interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration prior to the date which is ninety-one (91) days after the Maturity Date and other Disqualified Equity Interests, (m) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product and (n) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer, but only to the extent such Person is liable for such Indebtedness.

 

1.94                           “Information Certificate” shall mean, collectively, the Information Certificate of Borrowers and Guarantors constituting Exhibit C hereto containing material information with respect to Borrowers and Guarantors, their respective businesses and assets provided by or on behalf of Borrowers and Guarantors to Agents in connection with the preparation of this Agreement and the other Financing Agreements and the financing arrangements provided for herein.

 

1.95                           “Intellectual Property” shall mean, as to each Borrower and Guarantor, such Borrower’s and Guarantor’s now owned and hereafter arising or acquired:  patents, patent rights, patent applications, copyrights, works which are the subject matter of copyrights, copyright applications, copyright registrations, trademarks, servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and rights to use any of the foregoing and all applications, registrations and recordings relating to any of the foregoing as may be filed in the United States Copyright Office, the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, any political subdivision thereof or in any other country or jurisdiction, together with all rights and privileges arising under applicable law with respect to any Borrower’s or Guarantor’s use of any of the foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing; all rights to sue for past, present and future infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating standards; goodwill (including any goodwill associated with any trademark or servicemark, or the license of any trademark or servicemark); customer and other lists in whatever form maintained; trade secret rights, copyright rights, rights in works of authorship; software and contract rights relating to computer software programs, in whatever form created or maintained.

 

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1.96                           “Intercreditor Agreement” shall mean that certain ABL/Term Loan Intercreditor Agreement, dated as of the date hereof, in substantially the form of Exhibit F hereto.

 

1.97                           “Interest Expense” shall mean, for any period, as to any Person, as determined in accordance with GAAP, the amount equal to total interest expense of such Person and its Subsidiaries on a consolidated basis for such period, whether paid or accrued (including the interest component of any Capital Lease for such period), and in any event, including, without limitation, (a) discounts in connection with the sale of any Accounts, (b) bank fees, commissions, discounts and other fees and charges owed with respect to letters of credit, banker’s acceptances or similar instruments or any factoring, securitization or similar arrangements, (c) interest payable by addition to principal or in the form of property other than cash and any other interest expense not payable in cash, and (d) the costs or fees for such period associated with Hedging Agreements to the extent not otherwise included in such total interest expense (excluding breakage costs incurred in connection with the termination of Hedging Agreements on or about the date hereof, if any).

 

1.98                           “Interest Period” shall mean, with respect to any Eurodollar Rate Loan, the period commencing on the date of such Loan and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is one (1), two (2), three (3), or six (6) months thereafter (and, if acceptable to all Lenders, nine (9) or twelve (12) months thereafter), as any Borrower (or Borrower Agent on behalf of such Borrower) may elect; provided, however, that (a) 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, (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period and (c) no Interest Period for any Loan shall extend beyond the maturity date of such Loan.  Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.  For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan.

 

1.99                           “Interest Rate” shall mean,

 

(a)                                  Subject to clause (b) of this definition below:

 

(i)                                     as to Base Rate Loans, a rate equal to the then Applicable Margin for Base Rate Loans on a per annum basis plus the Base Rate, and

 

(ii)                                  as to Eurodollar Rate Loans, a rate equal to the then Applicable Margin for Eurodollar Rate Loans on a per annum basis plus the Adjusted Eurodollar Rate.

 

(b)                                 Notwithstanding anything to the contrary contained herein,

 

(i)                                     Administrative Agent may, at its option, and Administrative Agent shall, at the direction of the Required Lenders, increase the Applicable Margin otherwise used to calculate the Interest Rate for Base Rate Loans and Eurodollar Rate Loans in each case to the highest percentage set forth in the definition of the term Applicable Margin for each category of Loans (without regard to the amount of Quarterly Average Excess Availability) plus two (2%) percent per annum, for the period from and after the date of the occurrence of an Event of Default but only for so long as such Event of Default is continuing; and

 

(ii)                                  Administrative Agent may, at its option, and Administrative Agent shall, at the direction of the Required Lenders, increase the Applicable Margin otherwise used to calculate the Interest

 

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Rate for Base Rate Loans and Eurodollar Rate Loans, in each case to the highest percentage set forth in the definition of the term Applicable Margin for each category of Loans (without regard to the amount of Quarterly Average Excess Availability) plus two (2%) percent per annum, on Revolving Loans to the AZEK Companies or the Scranton Companies at any time outstanding in the aggregate in excess of their respective Borrowing Base (in each case whether or not such excess(es) arise or are made with or without the knowledge or consent of an Agent or any Lender and whether made before or after an Event of Default).

 

1.100                     “International” shall mean CPG International Holdings LP, a Delaware limited liability company, and its successors and assigns.

 

1.101                     “Inventory” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s now owned and hereafter existing or acquired goods, wherever located, which (a) are leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be furnished under a contract of service; (c) are furnished by such Borrower or Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished goods or materials used or consumed in its business.

 

1.102                     “Investment” shall have the meaning set forth in Section 10.4 hereof.

 

1.103                     “Investment Property Control Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agents, by and among Collateral Agent (and if applicable, Term Loan Collateral Agent or Control Agent), the applicable Borrower or Guarantor that is an account holder or customer (as the case may be) and any securities intermediary, commodity intermediary or other person who has custody, control or possession of any investment property of such account holder or customer, that is sufficient to perfect the security interests of Collateral Agent therein and provides such other rights with respect thereto as Agents require.

 

1.104                     “IPO” shall mean an initial public offering of the Equity Interests of Parent or any direct or indirect parent of the Parent.

 

1.105                     “Issuing Bank” shall mean (a) Wells Fargo Bank, National Association, in its capacity as the issuer of Letters of Credit hereunder or any other Lender as the Administrative Agent and Borrower Agent may agree as the issuer of Letters of Credit hereunder and in the case of any other Lender only to the extent that such person is a party hereto as an Issuing Bank and has executed and delivered such agreements with respect thereto as Administrative Agent may require and (b) with respect to each Existing Letter of Credit, the financial institution that issued such Existing Letter of Credit.

 

1.106                     “Last Twelve Month Period” shall mean, as of any date, the twelve (12) most recent immediately preceding fiscal months for which Administrative Agent has received financial statements in accordance with Section 9.6.

 

1.107                     “Lenders” shall mean the financial institutions who are signatories hereto as Lenders and other persons made a party to this Agreement as a Lender in accordance with Section 15.7 hereof, and their respective successors and assigns; each sometimes being referred to herein individually as a “Lender”.

 

1.108                     “Letter of Credit Documents” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk or (b) any collateral security for such obligations.

 

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1.109                     “Letter of Credit Limit” shall mean $10,000,000.

 

1.110                     “Letter of Credit Obligations” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time, plus, without duplication, (b) the aggregate amount of all drawings under Letters of Credit for which Issuing Bank has not at such time been reimbursed, and the aggregate amount of all payments made by each Lender to Issuing Bank with respect to such Lender’s participation in Letters of Credit as provided in Section 2.4 for which Borrowers have not at such time reimbursed the Lenders, whether by way of a Revolving Loan or otherwise.

 

1.111                     “Letters of Credit” shall mean all letters of credit issued by an Issuing Bank for the account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions or replacements thereof.  The “Letters of Credit” as such term is used herein shall include for all purposes hereunder the Existing Letters of Credit.

 

1.112                     “License Agreements” shall have the meaning set forth in Section 8.11 hereof.

 

1.113                     “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or otherwise) or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the UCC or any comparable law) and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under a lease which is not a Capital Lease.

 

1.114                     “Loans” shall mean the Revolving Loans.

 

1.115                     “London Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of the relevant Interest Period by reference to the British Bankers’ Association Interest Settlement Rates for deposits in US Dollars (as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “London Interbank Offered Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in US Dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period.

 

1.116                     “Management Agreement” shall mean the Management Agreement, dated as of May 10, 2005, by and between AEA Investors LLC and CPG I, as amended pursuant to Amendment No. 1 to Management Agreement, dated as of May 1, 2006.

 

1.117                     “Management Group” means the group consisting of the directors, executive officers and other management personnel of any Borrower or any direct or indirect parent entity of any Borrower, as the case may be, on the date hereof, together with (a) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of any Borrower or any direct or indirect parent entity of any Borrower as applicable, was approved by a vote of a majority of the directors of such Borrower or any direct or indirect parent entity of such Borrower, as applicable, then still in office who were

 

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either directors on the date hereof or whose election or nomination was previously so approved and (b) executive officers and other management personnel of any Borrower or any direct or indirect parent entity of any Borrower, as applicable, hired at a time when the directors on the date hereof, together with the directors so approved, constituted a majority of the directors of such Borrower or any direct or indirect parent entity of such Borrower, as applicable.

 

1.118                     “Material Adverse Effect” shall mean a material adverse effect on (a) business, assets, liabilities, results of operations, property or financial condition of the Parent and its Subsidiaries taken as a whole; (b) the ability of any Borrower or any Guarantor to perform its obligations, when such obligations are required to be performed, under this Agreement or any of the other Financing Agreements or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Financing Agreements or the rights or remedies of the Agents or the Lenders hereunder or thereunder or the perfection or priority of any Lien in favor of the Collateral Agent.

 

1.119                     “Material Contract” shall mean any contract or other agreement (other than the Financing Agreements and Secured Hedge Agreements), whether written or oral, to which any Borrower or Guarantor is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto would have a Material Adverse Effect.

 

1.120                     “Maturity Date” shall mean February 18, 2016 unless accelerated sooner in accordance with the terms hereof.

 

1.121                     “Maximum Credit” shall mean the amount of $65,000,000 (subject to adjustment as provided in Sections 2.5 and 2.6 hereof).

 

1.122                     “Maximum Interest Rate” shall mean the maximum non-usurious rate of interest under applicable Federal or State law as in effect from time to time that may be contracted for, taken, reserved, charged or received in respect of the indebtedness of a Borrower to an Agent or a Lender, or to the extent that at any time such applicable law may thereafter permit a higher maximum non-usurious rate of interest, then such higher rate.

 

1.123                     “Minimum Collateral Amount” shall mean, at any time, with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to the fronting exposure of the Issuing Bank with respect to Letter of Credit Obligations in respect of a Defaulting Lender (determined after giving effect to Section 6.16(a)(iv) and any Cash Collateral provided by such Defaulting Lender).

 

1.124                     “Moody’s” shall mean Moody’s Investors Service, Inc., and its successors and assigns.

 

1.125                     “Mortgaged Property” shall mean any owned Real Property of a Borrower or Guarantor listed in the Information Certificate (other than Excluded Property) and any other Real Property of a Borrower or Guarantor (other than Excluded Property) that may be acquired after the Closing Date and subject to a Mortgage pursuant to Section 9.13.

 

1.126                     “Mortgages” shall mean any mortgage, deed of trust or deed to secure debt executed by a Borrower or Guarantor in favor of the Collateral Agent, for the benefit of the Secured Parties, as the same may be amended, modified, extended, restated, replaced, or supplemented from time to time.

 

1.127                     “Multiemployer Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by any Borrower, any Guarantor or any ERISA Affiliate or with respect to which any Borrower, any Guarantor or any ERISA Affiliate may incur any liability.

 

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1.128                     “Net Cash Proceeds” shall mean the aggregate cash proceeds received by Parent or any of its Subsidiaries in respect of any sale, lease, transfer or other disposition of any assets or properties, or interest in assets and properties or as proceeds of any loans or other financial accommodations provided to it or as proceeds from the issuance and/or sale of any Equity Interests or Indebtedness, in each case net of the reasonable and customary direct costs relating to such sale, lease, transfer or other disposition or loans or other financial accommodation or issuance and/or sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and taxes paid or payable as a result thereof and in the case of a sale of any assets or properties or interest in assets and properties, amounts applied to the repayment of Indebtedness secured by a valid and enforceable lien (other than a lien created under the Financing Agreements) on the asset or assets that are the subject of such sale or other disposition required to be repaid in connection with such transaction.

 

1.129                     “Net Recovery Percentage” shall mean the fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the recovery on the aggregate amount of the Inventory at such time on a net orderly liquidation value basis as set forth in the most recent appraisal of Inventory received by Agents in accordance with Section 7.3, net of operating expenses, liquidation expenses and customary commissions, and (b) the denominator of which is the applicable original cost of the aggregate amount of the Inventory subject to appraisal.

 

1.130                     “Obligations” shall mean (a) any and all Revolving Loans, Letter of Credit Obligations and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers or Guarantors to an Agent, the Issuing Bank or any Lender, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under any of the Financing Agreements, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case with respect to such Borrower or Guarantor under the United States Bankruptcy Code or any similar statute (including the payment of interest and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured and (b) subject to the priority in right of payment set forth in Section 6.7 hereof, all obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers or Guarantors to any Bank Product Provider arising under or pursuant to any Bank Products, whether now existing or hereafter arising, provided, that, (i) as to any such obligations, liabilities and indebtedness arising under or pursuant to a Secured Hedge Agreement, the same shall only be included within the Obligations if upon Administrative Agent’s request, Collateral Agent shall have entered into an agreement, in form and substance reasonably satisfactory to Agents, with the Bank Product Provider that is a counterparty to such Secured Hedge Agreement, as acknowledged and agreed to by the Borrowers and Guarantors, providing for the delivery to Agents by such counterparty of information with respect to the amount of such obligations and providing for the other rights of Collateral Agent and such Bank Product Provider in connection with such arrangements, (ii) any Bank Product Provider, other than Agents and their respective Affiliates, shall have delivered written notice to Agents that (A) such Bank Product Provider has entered into a transaction to provide Bank Products to a Borrower or Guarantor and (B) the obligations arising pursuant to such Bank Products provided to Borrowers or Guarantors constitute Obligations entitled to the benefits of the security interest of Collateral Agent granted hereunder and under the other Financing Agreements, and Agents shall have accepted such notice in writing and (iii) in no event shall any Bank Product Provider to whom such obligations, liabilities or indebtedness are owing be deemed a Lender for purposes hereof to the extent of and as to such obligations, liabilities or indebtedness other than for purposes of Section 5.1 hereof and other than for purposes of Sections 14.1, 14.2, 14.3(b), 14.6, 14.7, 14.9, 14.12 and 15.6 hereof and in no event shall the approval of any such person be required in connection with the release or termination of any security interest or lien of Collateral Agent; provided, however,

 

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approval by a Bank Product Provider party to a Secured Hedge Agreement shall be required if payment of any amounts outstanding and due under such Secured Hedge Agreement is in default.

 

1.131                     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

1.132                     “Other Taxes” shall have the meaning given to such term in Section 6.8 hereof.

 

1.133                     “Parent” shall mean CPG International Inc., a Delaware corporation, and its successors and assigns.

 

1.134                     “Participant” shall mean any financial institution that acquires and holds a participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity with the provisions of Section 15.7 of this Agreement governing participations.

 

1.135                     “Partnership Agreement” shall mean the Agreement of Limited Partnership in International, effective as of May 10, 2005, by and among CPH Holding I LLC, as General Partner and the persons who subscribe thereto as Limited Partners.

 

1.136                     “Patriot Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as amended or modified from time to time.

 

1.137                     “Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Borrower or Guarantor sponsors, maintains, or to which any Borrower, Guarantor or ERISA Affiliate makes, is making, or is obligated to make contributions, other than a Multiemployer Plan.

 

1.138                     “Permits” shall have the meaning set forth in Section 8.7.

 

1.139                     “Permitted Acquisitions” shall mean the purchase by a Borrower or Guarantor after the date hereof of all or substantially all of the assets of any Person or a business or division of such Person (including pursuant to a merger with such Person or the formation of a wholly owned Subsidiary solely for such purpose that is merged with such Person) or of all or a majority of the Equity Interests (such assets or Person being referred to herein as the “Acquired Business”) and in one or a series of transaction that satisfies each of the following conditions:

 

(a)                                  as of the date of the acquisition or any payment in respect thereof and after giving effect to the acquisition or such payment, no Default or Event of Default shall exist or have occurred and be continuing;

 

(b)                                 the daily average of the aggregate amount of the Excess Availability for the period of sixty (60) consecutive days immediately preceding the date of such acquisition shall be not less than $10,000,000;

 

(c)                                  as of the date of such acquisition and after giving effect thereto and to any payments in connection therewith and to any increase in the Borrowing Base as a result of such acquisition, using the most recent calculation of the Borrowing Base prior to the date of any such payment, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than $10,000,000;

 

(d)                                 if the aggregate amount of the consideration payable with respect to such proposed acquisition or series of related acquisitions is greater than $5,000,000, Administrative Agent shall have

 

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received, not less than five (5) Business Days’ prior to the acquisition, the Permitted Transaction Projections with respect to such acquisition showing that: (i) the aggregate amount of the Excess Availability at all times during the period subject to such projections commencing after the acquisition will be not less than $10,000,000 and (ii) the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is projected to be equal to or greater than 1.0 to 1.0 at all times during such period; provided, that, consideration for such purpose shall include the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests, net of the applicable Acquired Business’ cash (including Cash Equivalents) balance as of the date of the acquisition) to be paid, issued or delivered in connection with any such Permitted Acquisition;

 

(e)                                  Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Borrowers have delivered financial statements pursuant to Section 9.6 hereof,

 

(f)                                    the Acquired Business shall be a company that engages in a line of business substantially similar to, or ancillary or related to, or used or useful to, the business that the Borrowers are engaged in on the date hereof;

 

(g)                                 in the case of the acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such acquisition and such Person shall not have announced that it will oppose such acquisition and shall not have commenced any action which alleges that such acquisition will violate applicable law;

 

(h)                                 Administrative Agent shall have received, not less than five (5) Business Days’ prior written notice of the proposed acquisition and such information with respect thereto as Administrative Agent may reasonably request, in each case with such information to include (i) parties to such acquisition, (ii) the proposed date and amount of the acquisition, (iii) a list and description of the assets or shares to be acquired, (iv) the total purchase price for the assets to be purchased (and the terms of payment of such purchase price);

 

(i)                                     if Borrower Agent requests that any accounts or inventory acquired pursuant to such acquisition be included in the Borrowing Base, Collateral Agent shall have completed a field examination with respect to the business and assets of the Acquired Business in accordance with Collateral Agent’s customary procedures and practices and as otherwise required by the nature and circumstances of the business of the Acquired Business, the scope and results of which shall be reasonably satisfactory to Agents and any Accounts or Inventory of the Acquired Business shall only be Eligible Accounts or Eligible Inventory to the extent that Collateral Agent has so completed such field examination with respect thereto and the criteria for Eligible Accounts or Eligible Inventory set forth herein are satisfied with respect thereto in accordance with this Agreement (or such other or additional criteria as Agents may, at their option, establish with respect thereto in accordance with the definitions of Eligible Accounts and Eligible Inventory, as applicable, and subject to such Reserves as Agents may establish in connection with the Acquired Business in accordance with the definition of such term, and in the case of Eligible Inventory acquired pursuant to a Permitted Acquisition to the extent that it has been subject to an appraisal that satisfies the requirements of Section 7.3 hereof);

 

(j)                                     if the aggregate amount of the consideration payable with respect to such proposed acquisition or series of related acquisitions is greater than $5,000,000, Administrative Agent shall have received either (i) the audited consolidated financial statements with respect to the Acquired Business for the three (3) fiscal years most recently ended for which financial statements are available, together with an unqualified opinion of independent certified public accountants, and interim unaudited consolidated financial statements with respect to the Acquired Business for each quarterly period ended since the last audited

 

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financial statements for which financial statements are available, or (ii) a “quality of earnings” review with respect to the Acquired Business, conducted by a third party reasonably acceptable to Administrative Agent, or (iii) such other historical financial statements with respect to the Acquired Business as may be reasonably acceptable to Administrative Agent; provided, that, (A) if the Acquired Business has not existed for the last three (3) fiscal years, Administrative Agent shall have received such reasonably satisfactory audited consolidated financial statements for the full fiscal years for which it existed and which are completed and in addition, at the option of the Administrative Agent, such reasonably satisfactory “quality of earnings” review and (B) consideration for such purpose shall include the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests, net of the applicable Acquired Business’ cash (including Cash Equivalents) balance as of the date of the acquisition) to be paid, issued or delivered in connection with any such Permitted Acquisition;

 

(k)                                  if the aggregate amount of the consideration payable with respect to such proposed acquisition or series of related acquisitions is equal to or less than $5,000,000, Administrative Agent shall have received either (i) the audited consolidated financial statements with respect to the Acquired Business for the three (3) fiscal years most recently ended for which financial statements are available, together with an unqualified opinion of independent certified public accountants, and interim unaudited consolidated financial statements with respect to the Acquired Business for each quarterly period ended since the last audited financial statements for which financial statements are available, or (ii) if any of such audited financial statements and opinions are not available, such unaudited financial statements or reviewed financial statements with respect to the Acquired Business for such fiscal years as may have been prepared, or (iii) such other historical financial statements with respect to the Acquired Business as may be reasonably acceptable to Administrative Agent; provided, that, consideration for such purpose shall include the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests, net of the applicable Acquired Business’ cash (including Cash Equivalents) balance as of the date of the acquisition) to be paid, issued or delivered in connection with any such Permitted Acquisition;

 

(l)                                     Administrative Agent shall have received a certificate of the chief financial officer or chief executive officer of Borrower Agent certifying to Administrative Agent and Lenders that such transaction complies with this definition; and

 

(m)                               upon Administrative Agent’s request, Administrative Agent shall have received (i) a reasonably detailed description of all material information relating to such acquisition and copies of all material documentation pertaining to such transaction, and (ii) all such other information and data relating to such transaction or the Acquired Business as may be reasonably requested by Administrative Agent.

 

1.140                     “Permitted Discretion” shall mean as used in this Agreement with reference to Agents, a determination made in good faith in the exercise of their reasonable business judgment based on how an asset-based lender with similar rights providing a credit facility of the type set forth herein would act in similar circumstances at the time with the information then available to it.

 

1.141                     “Permitted Dispositions” shall mean each of the following:

 

(a)                                  sales and leasing of Inventory in the ordinary course of business,

 

(b)                                 the sale or other disposition of used, worn-out, obsolete or damaged machinery, equipment and interests in real property (other than Mortgaged Property) or machinery, equipment and interests in real property (other than Mortgaged Property) no longer used, useful, usable or necessary in the conduct of the business of Parent and its Subsidiaries; provided that, subject to the Intercreditor Agreement

 

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(if applicable), at any time a Cash Dominion Event exists, all of the Net Cash Proceeds of the sale or other disposition of ABL Priority Collateral shall be paid to the Administrative Agent for application to the Obligations (without a permanent reduction of the Commitments hereunder) in accordance with the terms hereof;

 

(c)                                  the sale or other disposition of property by Parent or any Subsidiary thereof to a Borrower or Guarantor, provided, that, if the transferor of such property is a Borrower or Guarantor (i) the transferee thereof must be (A) a Borrower if the transferor is a Borrower or (B) a Borrower or Guarantor if the transferor is a Guarantor, (ii) to the extent such transaction constitutes an Investment, such transaction is permitted under Section 10.4 hereof and (iii) to the extent of any security interests and lien of Collateral Agent with respect to such property prior to its sale or other disposition, the security interest and lien of Collateral Agent on such property shall continue in all respects and shall not be deemed released or terminated as a result of such sale or other disposition and Borrowers and Guarantors shall execute and deliver such agreements, documents and instruments as Agents may reasonably request with respect thereto;

 

(d)                                 the sale or other disposition of property by (x) any Subsidiary that is not a Borrower or Guarantor to any other Subsidiary that is not a Borrower or Guarantor or (y) any Borrower or Guarantor to any Subsidiary that is not a Borrower or Guarantor; provided that the aggregate amount of the sales and other dispositions pursuant to this clause (d)(y) shall not exceed $5,000,000 in the aggregate;

 

(e)                                  the sale of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business consistent with the practices of Parent and its Subsidiaries as of the date hereof;

 

(f)                                    the grant by Parent and its Subsidiaries after the date hereof of a license of any Intellectual Property owned by Parent and its Subsidiaries, provided, that, the rights of the licensee shall be subject to the rights of Collateral Agent, and shall not adversely affect, limit or restrict the rights of Collateral Agent to use any Intellectual Property of Parent and its Subsidiaries to sell or otherwise dispose of any Inventory or other Collateral or otherwise adversely limit or interfere in any respect with the use of any such trademarks by Collateral Agent in connection with the exercise of its rights or remedies hereunder or under any of the other Financing Agreements;

 

(g)                                 the IPO and any other issuance and sale by Parent and its Subsidiaries of Equity Interests of Parent and its Subsidiaries after the date hereof for cash; provided, that, (A) Parent and its Subsidiaries shall not be required to pay any cash dividends or repurchase or redeem such Equity Interests or make any other payments in respect thereof, except as otherwise permitted in Section 10.5 hereof and (B)except with respect to the IPO or any other issuance of Equity Interests by the Parent, as of the date of such issuance and sale and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(h)                                 the issuance of Equity Interests of Parent consisting of common stock pursuant to an employee stock option or grant or similar equity plan or 401(k) plans of such Parent for the benefit of its employees, directors and consultants; provided, that, in no event shall Parent be required to issue, or shall Parent issue, Equity Interests pursuant to such stock plans or 401(k) plans which would result in a Change of Control or other Default or Event of Default;

 

(i)                                     the issuance of Equity Interests of a Foreign Subsidiary to foreign nationals to the extent required by foreign law and in the ordinary course of business;

 

(j)                                     the termination of Hedge Agreements permitted hereunder;

 

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(k)                                  a transfer of Equipment by a Borrower or Guarantor or any of their respective Subsidiaries to a manufacturer or dealer with respect to such Equipment pursuant to a trade-in of such Equipment; provided, that, such Equipment is replaced, substantially concurrently by like-kind equipment having the same or better value and without additional payments by such Borrower or Guarantor or Subsidiary in respect thereof;

 

(l)                                     the abandonment or other disposition of Intellectual Property that (i) is not material and is no longer used or useful in any material respect in the business of any Borrower, Guarantor or their Subsidiaries, (ii) does not appear on or is not otherwise affixed to or incorporated in any Inventory, (iii) is not necessary in connection with the Records, or (iv) does not have any material value; provided, that, no Default or Event of Default shall exist or have occurred and be continuing as of the date of such abandonment or other disposition and after giving effect thereto;

 

(m)                               the sale of any Equipment or Real Property that is otherwise permitted hereunder as a Permitted Disposition pursuant to a Sale and Leaseback Transaction;

 

(n)                                 any sale or other disposition of assets (other than Receivables and Inventory) subject to a security interest or lien permitted hereunder pursuant to the exercise by the holder of such security interest or lien of its remedies with respect to such assets, to the extent that the default that gave rise to the right of such holder to exercise its remedies is not a Default or Event of Default hereunder;

 

(o)                                 any transfer of property or assets, or issuance of Equity Interests, that is a Restricted Payment permitted under Section 10.5 or a Permitted Acquisition permitted under Section 10.4 or Permitted Investment permitted under Section 10.4;

 

(p)                                 the transfer of cash for the payment of Indebtedness to the extent such payments are permitted hereunder and for the payment of other payables in the ordinary course of the business of Borrowers and Guarantors or their Subsidiaries;

 

(q)                                 sales or other dispositions of assets of Parent and its Subsidiaries constituting Term Loan Priority Collateral permitted by the Term Loan Agreement and the Intercreditor Agreement and applied in accordance with the Term Loan Agreement.

 

(r)                                    sales or other dispositions of assets of Parent and its Subsidiaries not otherwise subject to the provisions set forth in this definition, provided, that, as to any such sale or other disposition, each of the following conditions is satisfied:

 

(i)                                     in the case of any sale or other disposition where the amount of the consideration payable in connection with such sale or other disposition is in excess of $5,000,000 or at any time that the aggregate amount of the consideration payable in connection with all such sales or other dispositions permitted under this clause (r) in any fiscal year are in excess of $5,000,000, then as to all sales or other dispositions in such fiscal year thereafter (and consideration for such purpose shall include the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests, to be paid, issued or delivered in connection with any such sale or other disposition):

 

(A)                              not less than seventy-five (75%) percent of the consideration to be received by Borrowers and Guarantors shall be paid or payable in cash and shall be paid contemporaneously with consummation of the transaction (it being understood that (x) any securities, notes or other obligations received by the Parent or any Subsidiary from the transferee that are converted by the Parent or such Subsidiary into cash (to the extent of the cash received) within

 

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180 days after receipt and (y) any liabilities of the Parent or any Subsidiary assumed by the transferee or discharged in connection with the sale shall constitute cash for purposes of this clause (A));

 

(B)                                the consideration paid or payable shall be in an amount not less than the fair market value of the property disposed of;

 

(C)                                such transaction does not involve the sale or other disposition of any Equity Interest in any Subsidiary or of Receivables other than Receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise constituting a Permitted Disposition (but in no event constituting Accounts of a Borrower or Guarantor);

 

(D)                               as of the date of such sale or other disposition and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such payment, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than $10,000,000;

 

(E)                                 at any time a Cash Dominion Event exists, subject to the terms of the Intercreditor Agreement (if applicable), the Net Cash Proceeds from any such sale or other disposition of ABL Priority Collateral shall be applied to the Obligations (without a permanent reduction of the Commitments hereunder); and

 

(F)                                 as of the date of any such sale or other disposition, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(ii)                                  in the case of any sale or other disposition where the amount of the consideration payable in connection with such sale or other disposition is equal to or less than $5,000,000 and so long as the aggregate amount of the consideration payable in connection with all such sales or other dispositions permitted under this clause (r) in any fiscal year is equal to or less than $5,000,000, then as to all sales or other dispositions in such fiscal year (and consideration for such purpose shall include the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests, to be paid, issued or delivered in connection with any such sale or other disposition):

 

(A)                              as of the date of such sale or other disposition and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such sale or other disposition, on a pro forma basis, there shall be Excess Availability; and

 

(B)                                as of the date of any such sale or other disposition, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing.

 

1.142                     “Permitted Investments” shall mean each of the following:

 

(a)                                  Investments consisting of accounts receivables owing to any Borrower or Guarantor or any of their respective Subsidiaries if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms;

 

(b)                                 the endorsement of instruments for collection or deposit in the ordinary course of business;

 

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(c)                                  Investments in cash or Cash Equivalents; provided, that, at any time a Cash Dominion Event exists, no Loans are then outstanding; except that notwithstanding that any Loans are outstanding at any time a Cash Dominion Event exists, Parent and its Subsidiaries may from time to time in the ordinary course of business consistent with their current practices as of the date hereof make deposits of cash or other immediately available funds in operating demand deposit accounts used for disbursements to the extent required to provide funds for amounts drawn or anticipated to be drawn shortly on such accounts and such funds may be held in Cash Equivalents consisting of overnight investments until so drawn (so long as such funds and Cash Equivalents are not held more than two (2) Business Days from the date of the initial deposit thereof) and the terms and conditions of Section 5.3 hereof shall have been satisfied with respect to the deposit account, investment account or other account in which such cash or Cash Equivalents are held;

 

(d)                                 deposits of cash for leases, utilities, worker’s compensation and similar matters in the ordinary course of business;

 

(e)                                  obligations under Hedge Agreements permitted under Section 10.3(e) hereof;

 

(f)                                    Investments the sole payment for which is Equity Interests of Parent that are otherwise permitted to be issued under the terms hereof and do not constitute Indebtedness;

 

(g)                                 receivables owing to Parent or any of its Subsidiaries, as well as advances in the form of deposits or a prepayment of expenses to vendors, suppliers, trade creditors and customers or endorsements for collection, in each case, if incurred, created or acquired in the ordinary course of business consistent with current practices as of the date hereof;

 

(h)                                 payroll, travel, commission and similar advances to cover matters that in good faith are expected at the time of such advances to be treated as expenses for accounting purposes in accordance with GAAP and that are made in the ordinary course of business consistent with current practices as of the date hereof;

 

(i)                                     the existing Investments of Parent and its Subsidiaries as of the date hereof in their respective Subsidiaries; provided, that, Parent and its Subsidiaries shall not have any further obligations or liabilities to make any capital contributions or other additional investments or other payments to or in or for the benefit of any of such Subsidiaries;

 

(j)                                     (i) loans and advances by Parent and its Subsidiaries to directors, officers and employees of Parent and its Subsidiaries in the ordinary course of business for bona fide (including, without limitation, in connection with the purchase of Equity Interests by such directors, officers and employees) business purposes not in excess of $5,000,000 at any time outstanding and (ii) Investments made in connection with split-dollar life insurance program for the benefit of directors, officers and employees of Parent and its Subsidiaries in the ordinary course of business consistent with the current practices of Parent and its Subsidiaries as of the date hereof;

 

(k)                                  stock or obligations issued to Parent and its Subsidiaries by any Person (or the representative of such Person) in respect of Indebtedness of such Person owing to Parent and its Subsidiaries in connection with the insolvency, bankruptcy, receivership or reorganization of such Person or a composition or readjustment of the debts of such Person; provided, that, the original of any such stock or instrument evidencing such obligations shall be promptly delivered to Collateral Agent, upon Agents’ request, together with such stock power, assignment or endorsement by Parent and its Subsidiaries as Agents may reasonably request;

 

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(l)                                     obligations of account debtors to Parent and its Subsidiaries arising from Accounts which are past due evidenced by a promissory note made by such account debtor payable to Parent and its Subsidiaries; provided, that, promptly upon the receipt of the original of any such promissory note in an amount greater than $250,000 individually or in the aggregate from any single account debtor (or regardless of the amount after an Event of Default exists or has occurred and is continuing, at the request of Agents) by Parent and its Subsidiaries, such promissory note shall be endorsed to the order of Collateral Agent or Control Agent, as applicable, by Parent and its Subsidiaries and promptly delivered to Collateral Agent or Control Agent, as applicable, as so endorsed;

 

(m)                               (x) loans, advances and other Investments by a Borrower or Guarantor to or in a Borrower or Guarantor, or by a Subsidiary that is not a Guarantor in any Borrower, any Guarantor or any other Subsidiary after the date hereof and (y) loans, advances and other Investments by a Borrower or Guarantor to or in a Subsidiary that is not a Borrower or a Guarantor after the date hereof; provided, that, as to any such Investments, each of the following conditions is satisfied: (i) to the extent that such Investment gives rise to any Indebtedness, such Indebtedness is permitted hereunder, (ii) to the extent that such Investment gives rise to the issuance of any Equity Interests, such issuance is permitted hereunder, (iii) as of the date of any such Investment and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, (iv) as to any such Investments made pursuant to the foregoing clause (m)(y), the aggregate amount of such Investments made after the date hereof shall not exceed $5,000,000 at any time outstanding and (v) as to any such Investment made pursuant to the foregoing clause (m)(y), as of the date of making of such Investment and after giving effect thereto, on a pro forma basis the aggregate amount of Excess Availability shall be not less than $10,000,000;

 

(n)                                 Investments constituting Restricted Payments permitted by Section 10.5;

 

(o)                                 Investments by Parent or any of its Subsidiaries in the form of Equity Interests received as consideration for the sale of assets pursuant to a Permitted Disposition by Parent or such Subsidiary to the extent permitted under Section 10.1(b);

 

(p)                                 any indemnity, purchase price adjustment, earnout or similar obligation payable to Parent or any of its Subsidiaries arising pursuant to a Permitted Acquisition in each case permitted under Section 10.4 or a Permitted Disposition in each case to the extent permitted under Section 10.1(b);

 

(q)                                 Investments consisting of advance payments for the purchase of inventory, supplies, material or equipment or the licensing or contribution of Intellectual Property pursuant to joint marketing arrangements with other Persons and in respect of Capital Expenditures made in the ordinary course of business consistent with the current practices of the Borrowers or Guarantors as of the date hereof, if any;

 

(r)                                    Investments permitted under Section 10.6;

 

(s)                                  Investments made with the net cash proceeds of capital contributions to or sales of Equity Interests of the Parent (in each case, other than Specified Equity Contributions) to the extent such net cash proceeds are contributed to the Parent; provided that such Investments are made substantially simultaneously with such capital contributions or sales;

 

(t)                                    Investments after the date hereof by Parent and its Subsidiaries in or to any Person (including, without limitation, a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form) not otherwise subject to the provisions above or in Section 10.4; provided, that, as to any such Investment, each of the following conditions is satisfied:

 

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(i)                                     in the case of any such Investments that are in excess of $5,000,000 or at any time that the aggregate amount of such Investments in any fiscal year are in excess of $5,000,000, then as to all such Investments in such fiscal year thereafter:

 

(A)                              as of the date of the Investment or any payment in respect thereof and after giving effect to the Investment or such payment, no Default or Event of Default shall exist or have occurred and be continuing;

 

(B)                                the daily average of the aggregate amount of the Excess Availability for the period of sixty (60) consecutive days immediately preceding the date of such Investment or any payment in respect thereof shall be not less than $10,000,000;

 

(C)                                as of the date of such Investment and after giving effect thereto and to any payments in connection therewith and to any increase in the Borrowing Base as a result of such Investment (if any), using the most recent calculation of the Borrowing Base prior to the date of any such Investment and payment, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than $10,000,000;

 

(D)                               for any such Investment where the amount of any or all payments in respect thereof exceeds $5,000,000, Administrative Agent shall have received, not less than five (5) Business Days’ prior to the Investment, the Permitted Transaction Projections with respect to such Investment showing that: (1) the aggregate amount of the Excess Availability at all times during the period subject to such projections after such Investment, will be not less than $10,000,000 and (2) the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is projected to be equal to or greater than 1.0 to 1.0 at all times during such period;

 

(E)                                 Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Administrative Agent has received financial statements pursuant to Section 9.6 hereof;

 

(F)                                 the Investment shall be in or to a company that engages in a line of business substantially similar to, or ancillary or related to, or used or useful to, the business that the Borrowers and Guarantors are engaged in on the date hereof;

 

(G)                                Administrative Agent shall have received not less than five (5) Business Days’ prior written notice of the proposed Investment and such information with respect thereto as Administrative Agent may reasonably request, in each case with such information to include (1) parties to such Investment, (2) the proposed date and amount of the Investment, and (3) the total amount of the Investment;

 

(H)                               Administrative Agent shall have received a certificate of the chief financial officer or chief executive officer of Borrower Agent certifying to Agents and Lenders that such transaction complies with this definition; and

 

(I)                                    upon Administrative Agent’s request, Administrative Agent shall have received (1) a reasonably detailed description of all material information relating to such acquisition and copies of all material documentation pertaining to such transaction, and (2) all such other information and data relating to such transaction as may be reasonably requested by Administrative Agent;

 

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(ii)                                  in the case of any such Investments that are equal to or less than $5,000,000 and so long as the aggregate amount of all such Investments in any fiscal year are equal to or less than $5,000,000,  then as to all such Investments in such fiscal year:

 

(A)                              as of the date of such Investment and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such sale or other disposition, on a pro forma basis, there shall be Excess Availability; and

 

(B)                                as of the date of any such Investment, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing.

 

1.143                     “Permitted Liens” shall mean:

 

(a)                                  the security interests and liens of Collateral Agent for itself and the benefit of the Secured Parties and the rights of setoff of Secured Parties provided for herein, created by the Mortgages and/or the other Financing Agreements, or under applicable law;

 

(b)                                 liens securing the payment of taxes, assessments or other governmental charges or levies either not yet delinquent or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, or Guarantor or Subsidiary, as the case may be, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such Lien and with respect to which adequate reserves have been set aside on its books in accordance with GAAP;

 

(c)                                  non-consensual statutory liens (other than liens arising under ERISA or securing the payment of taxes) arising in the ordinary course of such Borrower’s, Guarantor’s or Subsidiary’s business that do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s suppliers’, repairmen’s and mechanics’ liens, to the extent: (i) such liens do not in the aggregate materially detract from the value of the property of Borrowers and Guarantors taken as a whole and do not materially impair the use thereof in the operation of Borrowers and Guarantors taken as a whole, (ii) such liens secure Indebtedness which is not overdue or is fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, such Guarantor or such Subsidiary, in each case (i) prior to the commencement of foreclosure or other similar proceedings or (ii) bonded, so as to prevent the forfeiture or sale of the property subject to any such lien and with respect to which adequate reserves have been set aside on its books in accordance with GAAP;

 

(d)                                 (i) all liens, encumbrances and other matters disclosed in the Title Insurance Policy(ies), to the extent delivered to Agents pursuant to Section 4.1(m), (ii) such other title and survey exceptions as Administrative Agent has approved or may approve in writing in Agent’s reasonable discretion, and (iii) zoning restrictions, easements, licenses, rights of way covenants and other restrictions affecting the use of Real Property or other similar encumbrances incurred or entered into which do not interfere in any material respect with the use of such Real Property or ordinary conduct of the business of such Borrower, such Guarantor or such Subsidiary as presently conducted thereon or materially impair the value or marketability of the Real Property which may be subject thereto;

 

(e)                                  security interests in Equipment and Real Property (other than Mortgaged Property) arising after the date hereof to secure Indebtedness permitted under Section 10.3(b) hereof, whether such Indebtedness is assumed or incurred by a Borrower, Guarantor or Subsidiary;

 

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(f)                                    pledges and deposits of cash by any Borrower, Guarantor or Subsidiary after the date hereof in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security benefits consistent with the current practices of such Borrower, Guarantor or Subsidiary as of the date hereof;

 

(g)                                 pledges and deposits of cash by any Borrower, Guarantor or Subsidiary after the date hereof to secure the performance of tenders, bids, leases, trade contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations in each case in the ordinary course of business consistent with the current practices of such Borrower, Guarantor or Subsidiary as of the date hereof; provided, that, in connection with any performance bonds issued by a surety or other person, the issuer of such bond shall have waived in writing any rights in or to, or other interest in, any of the Collateral in an agreement, in form and substance reasonably satisfactory to Agents;

 

(h)                                 liens arising from (i) operating leases and the precautionary UCC financing statement filings in respect thereof and (ii) equipment or other materials which are not owned by any Borrower, Guarantor or Subsidiary located on the premises of such Borrower, Guarantor or Subsidiary (but not in connection with, or as part of, the financing thereof) from time to time in the ordinary course of business and consistent with current practices of such Borrower or Guarantor and the precautionary UCC financing statement filings in respect thereof;

 

(i)                                     statutory or common law liens or rights of setoff of depository banks with respect to funds of any Borrower, Guarantor or Subsidiary at such banks to secure fees and charges in connection with returned items or the standard fees and charges of such banks in connection with the deposit accounts maintained by such Borrower, Guarantor or Subsidiary at such banks (but not any other Indebtedness or obligations);

 

(j)                                     judgments and other similar liens arising in connection with court proceedings that do not constitute an Event of Default, provided, that, (i) such liens are being contested in good faith and by appropriate proceedings diligently pursued, (ii) adequate reserves or other appropriate provision, if any, as are required by GAAP have been made therefor, (iii) a stay of enforcement of any such liens is in effect and (iv) Agents may establish a Reserve with respect thereto;

 

(k)                                  leases or subleases of Real Property, non-disturbance agreements and rights of tenants, in each case, granted by any Borrower or Guarantor or a Subsidiary in the ordinary course of business and consistent with past practice to any Person so long as any such leases, subleases or non-disturbance agreements do not interfere in any material respect with the ordinary conduct of the business of such Borrower or Guarantor as presently conducted thereon or otherwise conflict with the terms of the Mortgages;

 

(l)                                     licenses of Intellectual Property permitted under clause (f) of the definition of Permitted Disposition;

 

(m)                               liens on goods in favor of customs and revenue authorities arising as a matter of law to secure custom duties in connection with the importation of such goods;

 

(n)                                 liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(o)                                 liens attaching solely to cash (including earnest money) deposits or other escrow arrangements in connection with any letter of intent or purchase agreement in connection with any sale or

 

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purchase of the property of the Parent or its Subsidiaries or any Investment (including Permitted Acquisition) permitted hereunder;

 

(p)                                 (i) the liens of the Collateral Agent for itself and the benefit of the Secured Parties (as each such term is defined in the Term Loan Agreement), securing the Obligations (as defined in the Term Loan Agreement) in accordance with the terms of the Intercreditor Agreement and (ii) Permitted Other Indebtedness Liens and Specified Refinancing Liens (as each such term is defined in the Term Loan Agreement);

 

(q)                                 security interests and liens to secure Acquired Indebtedness permitted hereunder; provided that (i) the security interests and liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Parent or a Subsidiary and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Parent or a Subsidiary and (ii) such security interests and liens do not extend to or cover any property or assets of Parent or of any of its Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Parent or a Subsidiary and are no more favorable to the lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by Parent or a Subsidiary;

 

(r)                                    the security interests and liens set forth on Schedule 8.4 to the Information Certificate which are not otherwise permitted under the other clauses of this definition and any security interests and liens to secure Refinancing Indebtedness of the Indebtedness secured by such security interests and liens to the extent permitted under Section 10.3(q) hereof.

 

1.144                     “Permitted Tax Distributions” shall mean (a) in the event that International, the parent of Parent, is treated as a corporation for applicable Federal, State or local income tax purposes and is a member of a consolidated, combined or similar U.S. Federal, State or local income tax group of which it or another direct or indirect parent of Parent is the common parent, payments, dividends or distributions to International, or another direct or indirect parent of Parent, as the case may be, in order to pay the portion of any such consolidated, combined or similar income taxes that are attributable to the income of Parent and its Subsidiaries (to the extent such taxes are not payable directly by Parent or its Subsidiaries); provided, that, the amount of such payments, dividends or distributions, plus the amount of any such taxes payable directly by Parent and its Subsidiaries, do not exceed the taxes that Parent and its Subsidiaries would have paid as a stand-alone group; or (b) in the event that Parent is treated as a partnership for applicable U.S. Federal, State or local income tax purposes, aggregate payments, dividends or distributions to International, or any other direct parent entity of Parent, as the case may be, in an amount equal to, with respect to any taxable year of Parent, the product of (i) the highest combined U.S. Federal, State (or provincial) and local statutory tax rate (after taking into account the deductibility of State (or provincial) and local income tax for U.S. Federal income tax purposes) applicable to any direct (or, where the direct equity holder is a pass-through entity, indirect) equity holder of Parent, or any other direct parent entity of Parent, as the case may be, multiplied by (ii) the taxable income of Parent (to the extent such taxes are not payable directly by Parent or its Subsidiaries).

 

1.145                     “Permitted Transaction Projections” shall mean, as to any proposed acquisition, Investment, disposition or other transaction, current, updated projections (including in each case, forecasted balance sheets and statements of income and loss, statements of cash flow, and the projected Borrowing Base and Excess Availability) for Parent and its Subsidiaries on such basis (whether monthly, quarterly, annually or otherwise) for such period as Administrative Agent may require after the acquisition, Investment or other transaction, giving effect thereto, all in reasonable detail and in a format consistent with the projections delivered by Parent to Administrative Agent prior to the date hereof, together with such supporting information as Administrative Agent may reasonably request, which projections shall have been prepared on

 

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the basis of the assumptions set forth therein which Borrowers believe are fair and reasonable as of the date of preparation in light of current and reasonably foreseeable business conditions and using such methodology as is consistent with the most recent financial statements delivered to Administrative Agent pursuant to Section 9.6 hereof and showing Borrowers’ reasonable best estimate of the future Borrowing Base and Excess Availability for the period set forth therein.

 

1.146       “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

 

1.147       “Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a Multiemployer Plan has made contributions at any time during the immediately preceding six (6) plan years or with respect to which any Borrower or Guarantor may incur liability.

 

1.148       “Pledge Agreement” shall mean the pledge agreement dated as of the Closing Date executed by Borrowers and Guarantors in favor of Collateral Agent, for the benefit of the Secured Parties, and the Control Agent.

 

1.149       “Prime Rate” shall mean the rate of interest per annum determined from time to time by Credit Suisse as its prime rate in effect at its principal office in New York City and notified to the Borrower Agent.  The prime rate is a rate set by Credit Suisse based upon various factors including Credit Suisse’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate.

 

1.150       “Procell Unit Purchase Agreement” shall mean, collectively, the following: (i)  the Unit Purchase Agreement, dated as of December 13, 2006, by and among CPG I and Christopher Bardasian, Kevin Sloan and Larry Sloan, (ii) that certain “side letter”, dated January 29, 2008, by and among CPG I, International, Christopher Bardasian, Kevin Sloan and Larry Sloan.

 

1.151       “Pro Forma Basis” shall mean, in connection with any calculation of Consolidated EBITDA and Fixed Charges, after giving effect on a pro forma basis for the period of such calculation to: (a) the incurrence or repayment of any Indebtedness of Borrowers and Guarantors (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to this Agreement, occurring during the Last Twelve Month Period or at any time subsequent to the last day of the Last Twelve Month Period and on or prior to the date of such incurrence or repayment, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Last Twelve Month Period; and (b) any asset sales or asset acquisitions (including, without limitation, any Permitted Acquisition giving rise to the need to make such calculation as a result of the Borrowers and Guarantors (including any Person who becomes a Borrower or Guarantor as a result of such Permitted Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA attributable to the assets that are the subject of the Permitted Acquisition or asset sale during the Last Twelve Month Period) occurring during the Last Twelve Month Period or at any time subsequent to the last day of the Last Twelve Month Period and on or prior to the date of such asset sale or Permitted Acquisition, as if such asset sale or Permitted Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Last Twelve Month Period, including giving effect to any Pro Forma Cost Savings (it being understood and agreed that any such Pro 

 

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Forma Cost Savings shall be calculated net of actual cost savings realized during such period from such actions that are otherwise included in the calculation of Consolidated EBITDA); provided, that, such pro forma effect pursuant to this clause (b) shall be determined using the relevant financial statements of the business acquired or to be acquired if available and, in any event, shall be reasonably satisfactory to Administrative Agent.

 

1.152                     “Pro Forma Compliance Certificate” shall mean, with respect to any event or transaction, or proposed event or transaction, a certificate of the chief financial officer, vice president of finance, treasurer or controller of Borrower Agent or Parent containing reasonably detailed calculations of the financial covenant set forth in Section 11 as of the most recent fiscal month end for which Administrative Agent has received financial statements pursuant to Section 9.6 based on the Last Twelve Month Period and certifying that the other conditions hereunder to the applicable event or transaction are satisfied, after giving effect to the applicable event or transaction on a Pro Forma Basis.

 

1.153                     “Pro Forma Cost Savings” shall mean with respect to any period, the reductions in costs that (a) occurred during the Last Twelve Month Period that are directly attributable to a stock or an asset acquisition, disposition or operational change and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act or (b) are implemented, committed to be implemented, the commencement of implementation of which has begun or reasonably expected to be implemented in good faith by the business that was the subject of any such stock or asset acquisition, disposition or operational change within twelve (12) months of the date of the stock or asset acquisition, disposition or operational change and that are factually supportable and quantifiable and expected to have a continuing impact, as if, in the case of each of clauses (a) and (b), all such reductions in costs had been effected as of the beginning of such period, decreased by any non-one-time incremental expenses incurred or to be incurred during the Last Twelve Month Period in order to achieve such reduction in costs.

 

1.154                     “Pro Rata Share” shall mean, as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate amount of all of the Commitments of the Lenders, as adjusted from time to time in accordance with the provisions hereof; provided, that, if the Commitments have been terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interest in Special Agent Advances and Letter of Credit Obligations and the denominator shall be the aggregate amount of all unpaid Loans, Special Agent Advances and Letter of Credit Obligations.

 

1.155                     “Qualified Equity Interests” shall mean any Equity Interests other than Disqualified Equity Interests.

 

1.156                     “Quarterly Average Excess Availability” shall mean, for any three (3) month period commencing on the first day of the month of such period, the daily average of the aggregate amount of the Excess Availability for such period.

 

1.157                     “Real Property” shall mean all now owned and hereafter acquired real property of each Borrower and Guarantor, including leasehold interests, together with all rights of Borrower and Guarantor with respect to buildings, structures, and other improvements located thereon and all licenses, easements and appurtenances relating thereto, wherever located.

 

1.158                     “Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Borrower and Guarantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles of such Borrower or Guarantor; (d)  letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable to any Borrower or Guarantor or 

 

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otherwise in favor of or delivered to any Borrower or Guarantor in connection with any Account; or (e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and other forms of obligations owing to any Borrower or Guarantor, whether from the sale and lease of goods or other property, licensing of any property (including Intellectual Property or other general intangibles), rendition of services or from loans or advances by any Borrower or Guarantor or to or for the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated with any Accounts, Inventory or general intangibles of any Borrower or Guarantor (including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to any Borrower or Guarantor in connection with the termination of any Plan or other employee benefit plan and any other amounts payable to any Borrower or Guarantor from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which any Borrower or Guarantor is a beneficiary).

 

1.159                     “Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of any Borrower or Guarantor with respect to the foregoing maintained with or by any other person).

 

1.160                     “Refinancing Indebtedness” shall have the meaning set forth in Section 10.3(q) hereof.

 

1.161                     “Refinancing Transactions” shall mean (a) the repayment in full and termination of the Existing Credit Agreements and (b) the redemption in full of the Senior Fixed Rate Notes and the Senior Floating Rate Notes, whether through the redemption, tender offer, satisfaction and discharge or any combination of the foregoing.

 

1.162                     “Register” shall have the meaning set forth in Section 6.4 hereof.

 

1.163                     “Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

1.164                     “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate more than fifty (50%) percent of the aggregate of the Commitments of all Lenders, or if the Commitments shall have been terminated, Lenders to whom more than fifty (50%) percent of the then outstanding Loans and participation interests in other Obligations are owing.  The Commitments, Loans and participation interests of Defaulting Lenders shall be disregarded in determining Required Lenders at any time.

 

1.165                     “Reserves” shall mean as of any date of determination, such amounts as Agents may from time to time establish and revise in their Permitted Discretion reducing the amount of Loans and Letters of Credit which would otherwise be available to any Borrower under the lending formula(s) provided for herein:  (a) to reflect events, conditions, contingencies or risks which, as determined by Agents in their Permitted Discretion, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the Collateral or any other property which is security for the Obligations, its value or the amount that might be received by Collateral Agent from the sale or other disposition or realization upon such Collateral, or (ii) the assets or business of any Borrower or Guarantor or (iii) the security interests and other rights of an Agent or any Lender in the Collateral (including the enforceability, perfection and priority thereof) or (b) to 

 

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reflect Agents’ good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Guarantor to an Agent is or may have been incomplete, inaccurate or misleading in any material respect or (c) in respect of any Default or an Event of Default.  Without limiting the generality of the foregoing, Reserves may be established to reflect any of the following: (i) inventory shrinkage, (ii) reserves in respect of markdowns and cost variances (pursuant to discrepancies between the purchase order price of Inventory and the actual cost thereof), (iii) dilution with respect to Accounts (based on the ratio of the aggregate amount of non-cash reductions in Accounts for any period to the aggregate dollar amount of the sales of such Borrower or Guarantor for such period) as calculated by Agents for any period is or is reasonably anticipated to be greater than five (5%) percent, (iv) returns, discounts, claims, credits and allowances of any nature that are not paid pursuant to the reduction of Accounts, (v) the sales, excise or similar taxes included in the amount of any Accounts reported to an Agent and amounts due or to become due in respect of sales, use and/or withholding taxes, (vi) any rental payments, service charges or other amounts due or to become due to owners or lessors of real property to the extent Inventory or Records are located in or on such property or in the possession or control of such parties or such Records are needed to monitor or otherwise deal with the Collateral (other than for locations where Agents have received a Collateral Access Agreement executed and delivered by the owner and lessor of such real property that Agents have acknowledged in writing is in form and substance reasonably satisfactory to Agents), provided, that, the Reserves established pursuant to this clause (vi) as to leased locations shall not exceed at any time the aggregate of amounts payable for the next two (2) months to the lessors of such locations, except that such limitation on the amount of the Reserves shall not apply at any time that a Default or Event of Default shall exist or have occurred and be continuing, or at any time there is any default or event of default under the lease with respect to such location or a notice thereof has been sent or received by or on behalf of such Borrower or Guarantor, (vii) any rental payments, service charges or other amounts due or to become due to lessors of personal property; (viii) an increase in the number of days of the turnover of Inventory or a change in the mix of the Inventory that results in an overall decrease in the value thereof or a deterioration in its nature or quality (but only to the extent not addressed by the lending formulas in a manner reasonably satisfactory to Agents), (ix) variances between the perpetual inventory records of the Borrowers and Guarantors and the results of the test counts of Inventory conducted by Collateral Agent with respect thereto in excess of the percentage reasonably acceptable to Agents, (x) the aggregate amount of deposits, if any, received by any Borrower or Guarantor from its customers in respect of unfilled orders for goods, (xi) reserves for in-transit inventory, including freight, taxes, duty and other amounts which Agents estimate must be paid in connection with such Inventory upon arrival and for delivery to one of such Borrower’s or Guarantor’s locations for Eligible Inventory within the United States of America, and (xii) obligations, liabilities or indebtedness (contingent or otherwise) of Borrowers or Guarantors to any Bank Product Provider arising under or in connection with any Bank Products of any Borrower or Guarantor with a Bank Product Provider or as such Bank Product Provider may otherwise require and Agents may agree in connection therewith to the extent that such obligation, liabilities or indebtedness constitute Obligations as such term is defined herein or otherwise receive the benefit of the security interest of Collateral Agent in any Collateral.  To the extent that an event, condition or matter as to any Eligible Accounts or Eligible Inventory is addressed pursuant to the treatment thereof within the applicable definition of such terms, Agents shall not also establish a Reserve to address the same event, condition or matter.  The amount of any Reserve established by Agents shall have a reasonable relationship to the event, condition or other matter which is the basis for such Reserve as determined by Agents in good faith and to the extent that such Reserve is in respect of amounts that may be payable to third parties Agents may, at their option, deduct such Reserve from the Maximum Credit at any time that such limit is less than the amount of the Borrowing Base.

 

1.166                     “Restricted Payment” shall mean any (a) dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of Parent or any of its Subsidiaries, 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 on account of any return of capital to Parent or such Subsidiary’s stockholders, partners or 

 

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members (or the equivalent Person thereof), or payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of Parent or any of its Subsidiaries, or any setting apart of funds or property for any of the foregoing and (b) the payment by Parent or any of its Subsidiaries of any management, advisory or consulting fee to any Person or the payment of any extraordinary salary, bonus or other form of compensation to any Person who is directly or indirectly a significant partner, shareholder, owner or executive officer of any such Person, to the extent such extraordinary salary, bonus or other form of compensation is not included in the corporate overhead of Parent or such Subsidiary.

 

1.167                     “Revolving Loans” shall mean loans now or hereafter made by or on behalf of any Lender or by Administrative Agent for the account of any Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayments and readvances) as set forth in Section 2.1 hereof.

 

1.168                     “Sale and Leaseback Transaction” shall mean, with respect to a Borrower or Guarantor, or any Subsidiary, any arrangement, directly or indirectly, with any Person whereby such Borrower or Guarantor or such Subsidiary shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired (other than transient ownership of equipment to be subject to any operating lease), 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 being sold or transferred.

 

1.169                     “Sanctioned Entity” shall mean (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in, a country that is subject to a sanctions program identified on the list maintained and published by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

 

1.170                     “Sanctioned Person” shall mean a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

 

1.171                     “S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and its successors and assigns.

 

1.172                     “Scranton Companies” shall mean, collectively, the following (together with their respective successors and assigns): Scranton and any other Person that is a Guarantor on or after the date hereof that engages in a line of business substantially similar to, or ancillary or related to, or used or useful to, the business that Scranton is engaged in on the date hereof, sometimes being referred to herein individually as a “Scranton Company”.

 

1.173                     “Secured Hedge Agreement” shall mean a Hedge Agreement between any Borrower or Guarantor and any Bank Product Provider.

 

1.174                     “Secured Parties” shall mean, collectively, (a) Agents, (b) Lenders, (c) the Issuing Bank and (d) any Bank Product Provider; provided, that, (i) as to any Bank Product Provider, only to the extent of the Obligations owing to such Bank Product Provider and (ii) such parties are sometimes referred to herein individually as a “Secured Party”.

 

1.175                     “Securities Act” shall mean the Securities Act of 1933, as amended, together with all rules, regulations and interpretations thereunder or related thereto.

 

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1.176                     “Senior Fixed and Floating Rate Note Indenture” shall mean Indenture, dated as of July 5, 2005, by CPG I, as Issuer and the Senior Fixed and Floating Rate Note Trustee, with respect to the Senior Floating Rate Notes and Senior Fixed Rate Notes.

 

1.177                     “Senior Fixed and Floating Rate Note Trustee” shall mean Wells Fargo Bank, N.A., as Trustee and its successors and assigns, and any replacement trustee permitted pursuant to the terms and conditions of the Senior Fixed and Floating Rate Note Indenture.

 

1.178                     “Senior Fixed Rate Notes” shall mean, collectively, the 10 1⁄2% Senior Notes due 2013 in the original aggregate amount of $150,000,000 issued by CPG I pursuant to the Senior Fixed and Floating Rate Note Indenture.

 

1.179                     “Senior Floating Rate Notes” shall mean, collectively, the Senior Floating Rate Notes due 2012 in the original aggregate amount of $128,114,000 issued by CPG I pursuant to the Senior Fixed and Floating Rate Note Indenture.

 

1.180                     “Senior Note Documents” shall mean, collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, modified, supplemented, extended, renewed, restated or replaced): (a) the Senior Floating Rate Notes, (b) the Senior Fixed Rate Notes, (c) the Senior Fixed and Floating Rate Note Indenture, and (d) any agreements, documents or instruments related to any of the foregoing.

 

1.181                     “Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the date hereof, and (b) the assets and properties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the amount which, such person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability).

 

1.182                     “Special Agent Advances” shall have the meaning set forth in Section 14.11 hereof.

 

1.183                     “Specified Equity Contribution” shall mean cash equity contributions (which if in the form of preferred equity shall be on terms and conditions reasonably acceptable to Administrative Agent) made directly or indirectly to Parent as cash equity and contributed by Parent to CPG I as a cash common equity contribution, which equity contribution is added to Consolidated EBITDA for the purposes of calculating compliance with Section 11.1.

 

1.184                     “Statutory Reserves” shall mean for any Interest Period for any Eurodollar Rate Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the United States Federal Reserve System in New York City with deposits exceeding one billion US Dollars against “Eurocurrency liabilities” (as such term is used in Regulation D).  Eurodollar Rate Loans shall be deemed to constitute Eurodollar liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Lender under Regulation D.

 

1.185                     “Subordinated Debt” shall mean any Indebtedness of a Borrower, Guarantor or Subsidiary that is subject to, and subordinate in right of payment to, the right of Agents and Lenders to receive the prior 

 

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final payment and satisfaction in cash in full of all of the Obligations and subject to such other terms and conditions as Administrative Agent may require with respect thereto and shall include the Cash Earn Out Consideration (if any), the Americhem Earn-Out Amount (if any) and the Tax Payment Consideration (if any), as each such terms is defined in the Procell Unit Purchase Agreement as in effect on the date hereof.

 

1.186                     “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Equity Interests or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more subsidiaries of such Person.  Unless the context requires otherwise, “Subsidiary” shall mean a “subsidiary” of Parent.

 

1.187                     “Supermajority Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate more than sixty-six and two-thirds (66-2/3%) percent of the aggregate of the Commitments of all Lenders, or if the Commitments shall have been terminated, Lenders to whom more than sixty-six and two-thirds (66-2/3%) percent of the then outstanding Obligations are owing.  The Commitments, Loans and participation interests of Defaulting Lenders shall be disregarded in determining Supermajority Lenders at any time.

 

1.188                     “Syndication Agents” shall mean, collectively, UBS Securities LLC and Wells Fargo Capital Finance, LLC in their respective capacities as co-syndication agents with respect to the Credit Facility.

 

1.189                     “Term Loan Agreement” shall mean that certain Term Loan and Security Agreement dated as of the date hereof, by and among Parent, the Borrowers, the Guarantors, the lenders from time to time party thereto and Credit Suisse, as administrative agent and collateral agent thereunder.

 

1.190                     “Term Loan Collateral Agent” shall mean Credit Suisse, in its capacity as collateral agent under the Term Loan Agreement and the other Financing Agreements (as defined in the Term Loan Agreement), together with its successors and assigns.

 

1.191                     “Term Loan Priority Collateral” shall have the meaning set forth in the Intercreditor Agreement.

 

1.192                     “Term Loans” shall have the meaning specified for the term “Loans” in the Term Loan Agreement.

 

1.193                     “Title Insurance Company” shall mean the title insurance company issuing the Title Insurance Policy.

 

1.194                     “Title Insurance Policy” shall mean an ALTA mortgages title insurance policy in a form reasonably acceptable to Agents (or, if the Mortgaged Property is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted in such State and reasonably acceptable to Agents) issued with respect to the Mortgaged Property and insuring the lien of the Mortgages.

 

1.195                     “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York and any successor statute, as in effect from time to time (except that terms used herein which are not otherwise defined herein and defined in the Uniform Commercial Code as in effect in the State of New York on the 

 

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date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as Agents may otherwise determine).

 

1.196                     “US Dollars”, “US$” and “$” shall each mean lawful currency of the United States of America.

 

1.197                     “Value” or “value” shall mean, as determined by Agents in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in first-out basis in accordance with GAAP or (b) market value; provided, that, for purposes of the calculation of the Borrowing Base, (i) the Value of the Inventory shall not include:  (A) the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Borrower or Guarantor or (B) write-ups or write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent with the most recent appraisal of the Inventory received and accepted by Agents prior to the date hereof, if any.

 

1.198                     “Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding principal amount of such Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.

 

SECTION 2.                                                    CREDIT FACILITIES

 

2.1                                 Revolving Loans.  Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to make its Pro Rata Share of Revolving Loans to Borrowers from time to time in amounts requested by any Borrower (or Borrower Agent on behalf of Borrowers) up to the aggregate amount outstanding equal to the Commitment of such Lender, provided, that, after giving effect to any such Revolving Loan, (a) the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding with respect to all Borrowers shall not exceed the Borrowing Base at such time and (b) the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding shall not exceed the Maximum Credit at such time.  Subject to the terms and conditions hereof, each Borrower (or Borrower Agent on behalf of Borrowers) may from time to time borrow, prepay and reborrow Revolving Loans.  Borrowers shall not permit the outstanding Revolving Loans and Letter of Credit Obligations on the books and records of the AZEK Companies to exceed the portion of the Borrowing Base based on the assets of the AZEK Companies and shall not permit the outstanding Revolving Loans and Letter of Credit Obligations on the books and records of the Scranton Companies to exceed the portion of the Borrowing Base based on the assets of the Scranton Companies.  No Lender shall be required to make any Revolving Loan, if, after giving effect thereto the aggregate outstanding principal amount of all Revolving Loans of such Lender, together with such Lender’s Pro Rata Share of the aggregate amount of all Letter of Credit Obligations, would exceed such Lender’s Commitment.

 

2.2                                 [Reserved].

 

2.3                                 Letters of Credit.

 

(a)                                  General.  Subject to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Borrower Agent on behalf of any Borrower), each Issuing Bank agrees to issue, for the account of such Borrower or a Guarantor one or more Letters of Credit, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions reasonably acceptable to Administrative Agent and such Issuing Bank.

 

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(b)                                 Notice of Issuance, Amendment, Renewal, Extension. The Borrower requesting such Letter of Credit (or Borrower Agent on behalf of such Borrower) shall give Administrative Agent and the Issuing Bank with respect thereto three (3) Business Days’ prior written notice of such Borrower’s request for the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit).  Such notice shall be irrevocable and shall (i) specify the original face amount of the Letter of Credit requested (or identify the Letter of Credit to be amended, renewed or extended), (ii) the effective date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the end of the then current term of this Agreement) of issuance of such requested Letter of Credit (or such amendment, renewal or extension), (iii) whether such Letter of Credit may be drawn in a single or in partial draws, (iv) the date on which such requested Letter of Credit is to expire, (v) the purpose for which such Letter of Credit is to be issued, (vi) the name and address of the beneficiary of the requested Letter of Credit, (vii) such other information as shall be necessary to enable the Issuing Bank to prepare, amend, renew or extend such Letter of Credit and (viii) if requested by Issuing Bank or Administrative Agent, the Borrower requesting such Letter of Credit (or Borrower Agent on behalf of such Borrower) shall have delivered to Issuing Bank with respect thereto at such times and in such manner as such Issuing Bank may require, an application, in form and substance reasonably satisfactory to such Issuing Bank and Administrative Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be required pursuant to the terms thereof.  If requested by the Issuing Bank, the Borrower requesting such Letter of Credit (or Borrower Agent on behalf of such Borrower) shall attach to the request the proposed terms of the Letter of Credit.  In no event shall a Letter of Credit be issued, amended, renewed or extended unless the forms and terms of the proposed Letter of Credit (as amended, renewed or extended, as the case may be) is reasonably satisfactory to Administrative Agent and Issuing Bank.   The renewal or extension of, or increase in the amount of, any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(c)                                  Certain Conditions.  In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other terms and conditions contained herein, a Letter of Credit shall be issued, amended, renewed or extended only if (and on issuance, amendment, renewal or extension of each Letter of Credit, Borrowers shall be deemed to represent and warrant that) immediately after giving effect to such issuance, amendment, renewal or extension:  (i) no order of any court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or the issuance of such Letter of Credit, (ii) except as otherwise expressly permitted hereunder, after giving effect to the issuance, amendment, renewal or extension of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iii) after giving effect to the issuance, amendment, renewal or extension of any such Letter of Credit, (A) the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding shall not exceed the Borrowing Base at such time and (B) the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding with respect to all Borrowers shall not exceed the Maximum Credit at such time.  Promptly after the delivery of any Letter of Credit or amendment to a Letter of Credit, the applicable Issuing Bank will also deliver to Borrower Agent and Administrative Agent a true and complete copy of such Letter of Credit or amendment.  Except in Administrative Agent’s discretion and with the consent of all Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit.

 

(d)                                 Expiration.  Each standby Letter of Credit shall expire at or prior to the earlier of (i) twelve (12) months after the date of the issuance of such standby Letter of Credit (or in the case of any renewal or extension thereof, twelve (12) months after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date, provided, that, (A) any standby Letter of credit with a one year 

 

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tenor may provide for automatic renewal or extension thereof for additional one year periods (which in no event shall extend beyond the date referred to in clause (ii) above) so long as such standby Letter of Credit permits the Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such standby Letter of Credit) by giving prior notice to the beneficiary thereof within a time period during such twelve-month period to be agreed upon at the time such standby Letter of Credit is issued and (B) if the Issuing Bank and Administrative Agent each consent, the expiration date on any standby Letter of Credit may extend beyond the date referred to in clause (ii) above. Each trade or commercial Letter of Credit shall expire on the earlier of one hundred eighty (180) days after such trade Letter of Credit’s date of issuance, renewal or extension (as applicable) or the date five (5) Business Days prior to the Maturity Date.

 

(e)                                  Participations.  Immediately upon the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) (or, in the case of the Existing Letters of Credit, effective upon the Closing Date) and without any further action on the part of the applicable Issuing Bank or the Lenders, each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto).  Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such obligations arising under such Letter of Credit.  Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that an Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to such Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to such Issuing Bank in connection therewith.  The obligations of each Lender as to its participations pursuant hereto in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(f)                                    Reimbursement.  If an Issuing Bank shall make any payment in respect of a Letter of Credit, Borrowers shall reimburse Issuing Bank by paying to Administrative Agent an amount equal to such payment by Issuing Bank not later than 12:00 noon on the date that such payment by Issuing Bank is made, if the applicable Borrower (or Borrower Agent on behalf of such Borrower) shall have received notice of such payment by the Issuing Bank prior to 10:00 a.m. on such date, or, if such notice shall not have been received by such Borrower (or Borrower Agent) prior to such time on such date, then not later than 12:00 noon on (i) the Business Day that such Borrower (or Borrower Agent) receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that such Borrower (or Borrower Agent) receives such notice, if such notice is not received prior to such time on the day of receipt; provided, that, unless such Borrower (or Borrower Agent) requests otherwise, and, subject to the conditions to borrowing set forth herein, each drawing under any Letter of Credit or other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to Administrative Agent for a Base Rate Loan in the amount of such drawing or other amount then due, and shall be made by the Lenders in accordance with their respective Pro Rata Shares as a Revolving Loan, or if such request is not received in a timely manner, as Administrative Agent determines in its sole discretion as a Special Agent Advance in an equivalent amount and, to the extent so financed, such Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Revolving Loan (or Special Agent Advance, as the case may be).  The proceeds of such Revolving Loan or Special Agent Advance, as the case may be, shall be promptly paid by the Administrative Agent to the applicable Issuing Bank.  Promptly following receipt by Administrative Agent of any payment from a Borrower pursuant to this paragraph, Administrative Agent shall distribute such

 

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payment to the applicable Issuing Bank or, to the extent that Lenders or Administrative Agent have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders, Administrative Agent 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 payment made by such Issuing Bank (other than the funding of a Revolving Loan or Special Agent Advance as contemplated above) shall not constitute a Loan and shall not relieve the applicable Borrower of its obligation to reimburse such Issuing Bank for such payment.

 

(g)                                 Obligations Absolute.  The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations of Lenders to make payments to Administrative Agent for the account of an Issuing Bank with respect to Letters of Credit 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, notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to satisfy any other condition set forth in Section 4 hereof or any other event or circumstance, and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (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) payment by an 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, a Borrower’s obligations hereunder. None of Administrative Agent, Lenders or the Issuing Banks, or any of their Affiliates, 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 or any consequence arising from causes beyond the control of an Issuing Bank; provided, that, the foregoing shall not be construed to excuse an Issuing Bank from liability to the applicable Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by each Borrower to the extent permitted by applicable law) suffered by a Borrower that are caused by an 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 determined pursuant to a final, non-appealable order of 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, 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 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.

 

(h)                                 Disbursement Procedures. The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  Such Issuing Bank shall promptly notify Administrative Agent and the applicable Borrower (or Borrower Agent) by telephone (confirmed by facsimile or otherwise as Borrower Agent and Issuing Bank may agree) of such demand for payment and whether such Issuing Bank has made or will make any payment in respect thereof; provided, that, any failure to give or delay in giving such notice shall not relieve the applicable Borrower of its obligation to reimburse such Issuing Bank and Lenders with respect to any such payment.

 

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(i)                                     Interim Interest.  If an Issuing Bank shall make any payment in respect of a Letter of Credit, or otherwise be owed any amounts in respect thereof, then, unless the applicable Borrower shall reimburse Issuing Bank for such payment or other amount in full on the date such payment is made or amount due, the unpaid amount thereof shall bear interest, for each day from and including the date such payment is made or amount due but excluding the date that the applicable Borrower reimburses such payment or other amount, at the rate per annum then applicable to Base Rate Loans. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by Administrative Agent or any Lender pursuant to Section 2.3(f) above to reimburse such Issuing Bank shall be for the account of Administrative Agent or such Lender to the extent of such payment, and shall be payable on demand or, if no demand has been made, on the date on which the applicable Borrower reimburses the applicable payment in full.

 

(j)                                     Indemnification.  Borrowers and Guarantors shall indemnify and hold Administrative Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Administrative Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by an Issuing Bank or correspondent with respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or expenses that are a direct result of the gross negligence or willful misconduct of Administrative Agent or any Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction.  Each Borrower and Guarantor assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder.  Each Borrower and Guarantor hereby releases and holds Administrative Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of Credit, except for the gross negligence or willful misconduct of Administrative Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction.  The provisions of this Section 2.3(j) shall survive the payment of Obligations and the termination of this Agreement.  Notwithstanding the foregoing, any indemnification with respect to duties, taxes, levies, imposts, fees, deductions, charges or withholdings imposed by any Governmental Authority (other than those imposed with respect to any non-tax losses, claims, damages, liabilities, costs or expenses covered by this Section 2.3(j)) with respect to payments made by the Borrowers or on account of any Obligations shall be governed by Section 6.8.

 

(k)                                  Account Party.  Each Borrower and Guarantor hereby irrevocably authorizes and directs each Issuing Bank to name such Borrower or Guarantor as the account party therein and to deliver to Administrative Agent all instruments, documents and other writings and property received by such Issuing Bank pursuant to the Letter of Credit and to accept and rely upon Administrative Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto.  Nothing contained herein shall be deemed or construed to grant any Borrower or Guarantor any right or authority to pledge the credit of Administrative Agent or any Lender in any manner.  Borrowers and Guarantors shall be bound by any reasonable interpretation made in good faith by Administrative Agent, or an Issuing Bank under or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower or Guarantor.  In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers and Guarantors shall, at Administrative Agent’s prior written request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or instruments in which Collateral Agent holds a security interest that upon Administrative Agent’s prior written request, such items are to be delivered to Collateral Agent and/or subject to Collateral Agent’s order, and if they shall come into such Borrower’s or Guarantor’s possession, to deliver them, upon Administrative Agent’s prior written request, to Collateral Agent in their original form.  Except as otherwise provided herein, Administrative Agent shall not exercise such right to request such items 

 

52

 

so long as no Default or Event of Default shall exist or have occurred and be continuing.  Except as Administrative Agent may otherwise specify, Borrowers and Guarantors shall designate the Issuing Bank with respect to a Letter of Credit as the consignee on all bills of lading and other negotiable and non-negotiable documents under such Letter of Credit.

 

2.4                                 Requests for Borrowings.

 

(a)                                  To request a Revolving Loan, the applicable Borrower (or Borrower Agent on behalf of such Borrower) shall notify Administrative Agent of such request by telephone (a) in the case of a Eurodollar Rate Loan, not later than 12:00 noon, New York time, three (3) Business Days before the date of the proposed Eurodollar Rate Loan or (b) in the case of a Base Rate Loan, not later than 12:00 noon. on the same Business Day as the date of the proposed Base Rate Loan.  Each such telephonic request shall be irrevocable and to the extent required by Administrative Agent, shall be confirmed promptly by hand delivery or facsimile to Administrative Agent of a written request in a form approved by Administrative Agent and signed by or on behalf of Borrowers.  Each such telephonic and written request shall specify the following information:

 

(i)                                     the Borrower requesting such Revolving Loan;

 

(ii)                                  the aggregate amount of such Revolving Loan;

 

(iii)                               the date of such Revolving Loan, which shall be a Business Day;

 

(iv)                              whether such Revolving Loan is to be a Base Rate Loan or a Eurodollar Rate Loan;

 

(v)                                 in the case of a Eurodollar Rate Loan, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

 

(vi)                              the deposit account of the applicable Borrower specified on Schedule 8.10 of the Information Certificate or any other account with Administrative Agent that shall be specified in a written notice signed by an officer of such Borrower and delivered to and approved by Administrative Agent (such approval not to be unreasonably withheld).

 

(b)                                 If no election as to whether a Revolving Loan is to be a Base Rate Loan or Eurodollar Rate Loan is specified in the applicable request, then the requested Revolving Loan shall be a Base Rate Loan.  If no Interest Period is specified with respect to any request for a Eurodollar Rate Loan, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a request for a Revolving Loan in accordance with this Section, Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Revolving Loan to be made as part of the request.

 

(c)                                  All Loans and Letters of Credit under this Agreement shall be conclusively presumed to have been made to, and at the request of and for the benefit of, any Borrower or Guarantor when deposited to the credit of any Borrower or Guarantor or otherwise disbursed or established in accordance with the instructions of any Borrower or Guarantor or in accordance with the terms and conditions of this Agreement.

 

(d)                                 Except in Administrative Agent’s discretion and with the consent of all Lenders, or as otherwise provided herein, the aggregate amount of the Revolving Loans and the Letter of Credit Obligations outstanding at any time shall not exceed the lesser of the Maximum Credit or the Borrowing Base.

 

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2.5                                 Increase in Maximum Credit.

 

(a)                                  Borrower Agent may, at any time, deliver a written request to Administrative Agent to increase the Maximum Credit.  Any such written request shall specify the amount of the increase in the Maximum Credit that Borrowers are requesting, provided, that, (i) in no event shall the aggregate amount of any such increase cause the Maximum Credit to exceed $100,000,000, (ii) such request shall be for an increase of not less than $5,000,000, (iii) any such request shall be irrevocable, (iv) in no event shall there be more than one such increase in any calendar quarter and (v) no Default or Event of Default shall exist or have occurred and be continuing.

 

(b)                                 Upon the receipt by Administrative Agent of any such written request, Administrative Agent shall notify each of the Lenders of such request and each Lender shall have the option (but not the obligation) to increase the amount of its Commitment by an amount up to its Pro Rata Share of the amount of the increase thereof requested by Borrower Agent as set forth in the notice from Administrative Agent to such Lender.  Each Lender shall notify Administrative Agent within fifteen (15) days after the receipt of such notice from Administrative Agent whether it is willing to so increase its Commitment, and if so, the amount of such increase; provided, that, (i) the minimum increase in the Commitments of each such Lender providing the additional Commitments shall equal or exceed $1,000,000, and (ii) no Lender shall be obligated to provide such increase in its Commitment and the determination to increase the Commitment of a Lender shall be within the sole and absolute discretion of such Lender.  If the aggregate amount of the increases in the Commitments received from the Lenders does not equal or exceed the amount of the increase in the Maximum Credit requested by Borrower Agent, Borrower Agent may seek additional increases from Lenders or Commitments from such Eligible Transferees as it may determine, after consultation with Administrative Agent.  In the event Lenders (or Lenders and any such Eligible Transferees, as the case may be) have committed in writing to provide increases in their Commitments or new Commitments in an aggregate amount in excess of the increase in the Maximum Credit requested by Borrowers or permitted hereunder, Administrative Agent shall then have the right to allocate such commitments, first to Lenders and then to Eligible Transferees, in such amounts and manner as Administrative Agent may determine, after consultation with Borrower Agent.

 

(c)                                  The Maximum Credit shall be increased by the amount of the increase in the applicable Commitments from Lenders or new Commitments from Eligible Transferees, in each case selected in accordance with Section 2.5(b) above, for which Administrative Agent has received a joinder agreement to this Agreement thirty (30) days after the date of the request by Borrower Agent for the increase or such earlier date as Administrative Agent and Borrower Agent may agree (but subject to the reasonable satisfaction of the conditions set forth below), whether or not the aggregate amount of the increase in Commitments and new Commitments, as the case may be, equal or exceed the amount of the increase in the Maximum Credit requested by Borrower Agent in accordance with the terms hereof, effective on the date that each of the following conditions have been satisfied:

 

(i)                                     Administrative Agent shall have received from each Lender or Eligible Transferee that is providing an additional Commitment as part of the increase in the Maximum Credit, a joinder agreement to this Agreement duly executed by such Lender or Eligible Transferee and each Borrower, provided, that, the aggregate Commitments set forth in such joinder agreement shall be not less than $1,000,000;

 

(ii)                                  the conditions precedent to the making of Revolving Loans set forth in Section 4.2 shall be satisfied as of the date of the increase in the Maximum Credit, both before and after giving effect to such increase;

 

54

 

(iii)                               such increase in the Maximum Credit, on the date of the effectiveness thereof, shall not violate any applicable law, regulation or order or decree of any court or other Governmental Authority and shall not be enjoined, temporarily, preliminarily or permanently;

 

(iv)                              there shall have been paid to each Lender and Eligible Transferee providing an additional Commitment in connection with such increase in the Maximum Credit all fees and expenses due and payable to such Person on or before the effectiveness of such increase;

 

(v)                                 Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such increase in the Maximum Credit, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Borrowers have delivered financial statements pursuant to Section 9.6 hereof; and

 

(vi)                              to the extent reasonably necessary to maintain the continuing priority of the Lien of the Mortgages as security for the Obligations, as determined by the Administrative Agent in its reasonable discretion, and in each case, in accordance with the reasonable and customary procedures of the applicable jurisdiction in which the Mortgaged Properties shall be located, (A) the applicable Borrower or Guarantor party to any Mortgages shall have entered into, and delivered to the Administrative Agent and the Collateral Agent, at the direction and in the reasonable discretion of the Administrative Agent a mortgage modification or new Mortgage in proper form for recording in the relevant jurisdiction and in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent, (y) the Borrowers shall have caused to be delivered to the Administrative Agent for the benefit of the Lenders an endorsement to the title insurance policy, date down(s)  or equivalent coverage where such endorsements or date down(s) are not available or other evidence reasonably satisfactory to the Administrative Agent insuring that the priority of the Lien of the Mortgages as security for the Obligations has not changed and confirming and/or insuring that since the issuance of the title insurance policy there has been no change in the condition of title and there are no intervening liens or encumbrances which may then or thereafter take priority over the Lien of the Mortgages (other than Permitted Liens) and (z) the Borrowers shall have delivered, at the request of the Administrative Agent, to the Administrative Agent, the Collateral Agent and/or all other relevant third parties all other items reasonably necessary to maintain the continuing priority of the Lien of the Mortgages as security for the Obligations.

 

(d)                                 As of the effective date of any such increase in the Maximum Credit, each reference to the term Commitments and Maximum Credit herein, as applicable, and in any of the other Financing Agreements shall be deemed amended to mean the amount of the Commitments and Maximum Credit specified in the most recent written notice from Administrative Agent to Borrower Agent of the increase in the Commitments and Maximum Credit, as applicable.

 

(e)                                  Effective on the date of each increase in the Maximum Credit pursuant to this Section 2.5, each reference in this Agreement to an amount of Excess Availability shall, automatically and without any further action, be deemed to be increased so that the ratio of the amount of Excess Availability to the amount of the Maximum Credit after such increase in the Maximum Credit remains the same as the ratio of the amount of Excess Availability to the amount of the Maximum Credit prior to such increase in the Maximum Credit.

 

(f)                                    Notwithstanding anything to the contrary contained in Section 13.3(a), each of the parties hereto hereby agrees that the Administrative Agent may, in consultation with the Borrower Agent, take any and all action as may be reasonably necessary to ensure that, upon the effectiveness of each increase in the Maximum Credit, (i) Revolving Loans made under such increase are included in each borrowing of outstanding Revolving Loans on a pro rata basis and (ii) the Lenders providing such increase share ratably in the aggregate outstanding amounts under the Credit Facility.

 

55

 

(g)                                 Each of the parties hereto hereby agrees that, upon the effectiveness of any increase in the Maximum Credit, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of such increase, and the Administrative Agent, each applicable Lender providing such increase and the Borrower Agent may revise this Agreement to evidence such amendments.

 

2.6                                 Decrease in Maximum Credit.

 

(a)                                  Borrower Agent may, at any time, deliver a written request to Administrative Agent to decrease the Maximum Credit.  Any such written request shall specify the amount of the decrease in the Maximum Credit that Borrower Agent is requesting and the effective date of such decrease (which date shall not be less than five (5) nor more than ten (10) Business Days after the date of such request); provided, that, (i) in no event shall the aggregate amount of any such decrease cause the Maximum Credit to be less than $40,000,000, except in connection with the refinancing of all the Loans outstanding under this Agreement, (ii) any such request for a decrease shall be for an amount of not less than $5,000,000, (iii) any such request, if delivered in connection with the refinancing of all the Loans outstanding under this Agreement, may be contingent upon the consummation of the transactions leading to such refinancing (and may be rescinded if such transactions have not consummated) but otherwise shall be irrevocable, (iv) in no event shall more than one such written request for a decrease be delivered to Administrative Agent in any calendar quarter, and (v) no Default or Event of Default shall exist or have occurred and be continuing.

 

(b)                                 Upon the receipt by Administrative Agent of a written request to decrease the Maximum Credit, Administrative Agent shall notify each of the Lenders of such request and, subject to the terms of Section 2.6(c) hereof, the Commitment of each Lender shall be decreased on the date requested by Borrower Agent by an amount equal to such Lender’s Pro Rata Share of the amount of the decrease in the Maximum Credit requested by Borrower Agent as set forth in the notice from Administrative Agent to such Lender.

 

(c)                                  In the event of a request to decrease the Maximum Credit, the Maximum Credit shall be decreased by the amount of the decrease in Maximum Credit requested by Borrower Agent in accordance with the terms hereof; provided, that, after giving effect to such decrease, the Maximum Credit shall not be less than the aggregate principal amount of the Loans, Special Agent Advances and Letter of Credit Obligations outstanding at such time.

 

(d)                                 As of the effective date of any such decrease in the Maximum Credit, each reference to the term Maximum Credit and Commitments herein, as applicable, and in any of the other Financing Agreements shall be deemed amended to mean the amount of the Maximum Credit and Commitments specified in the most recent written notice from Administrative Agent to Borrower Agent of the decrease in the Maximum Credit and Commitments, as applicable.

 

2.7                                 Prepayments.

 

(a)                                  Borrowers may prepay without penalty or premium the principal of any Revolving Loan, in whole or in part, subject to Section 6.7 hereof.

 

(b)                                 In the event that (i) the aggregate amount of the Loans and the Letter of Credit Obligations outstanding at any time exceed the Maximum Credit or (ii) except as otherwise provided herein, the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding exceed the Borrowing Base, such event shall not limit, waive or otherwise affect any rights of Administrative Agent or Lenders in such circumstances or on any future occasions and Borrowers shall, upon demand by 

 

56

 

Administrative Agent, which may be made at any time or from time to time, immediately repay to Administrative Agent the entire amount of any such excess(es) for which payment is demanded.

 

2.8                                 Joint and Several Liability of Borrowers.

 

(a)                                  Notwithstanding anything in this Agreement or any other Financing Agreements to the contrary, each Borrower, jointly and severally, in consideration of the financial accommodations to be provided by Agents and Lenders under this Agreement and the other Financing Agreements, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all of the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.  Borrowers shall be liable for all amounts due to Agents, Lenders and Issuing Bank under this Agreement, regardless of which Borrower actually receives the Revolving Loans or Letter of Credit Obligations hereunder or the amount of such Revolving Loans received or the manner in which Administrative Agent, any Lender or Issuing Bank accounts for such Revolving Loans, Letter of Credit Obligations or other extensions of credit on its books and records.  The Obligations of Borrowers with respect to Revolving Loans made to one of them, and the Obligations arising as a result of the joint and several liability of one of the Borrowers hereunder, with respect to Revolving Loans made to the other of the Borrowers hereunder, shall be separate and distinct obligations, but all such other Obligations shall be primary obligations of all Borrowers.

 

(b)                                 If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will make such payment with respect to, or perform, such Obligation.

 

(c)                                  Except as otherwise expressly provided herein, to the extent permitted by law, each Borrower (in its capacity as a joint and several obligor in respect of the obligations of the other Borrowers) hereby waives notice of acceptance of its joint and several liability, notice of occurrence of any Default or Event of Default (except to the extent notice is expressly required to be given pursuant to the terms of this Agreement), or of any demand for any payment under this Agreement or the other Financing Agreements, notice of any action at any time taken or omitted by an Agent or any Lender under or in respect of any of the obligations hereunder, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Agreement and the other Financing Agreements.  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by an Agent or any Lender at any time or times in respect of any default by the other Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by an Agent or any Lender in respect of any of the obligations hereunder, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of such obligations or the addition, substitution or release, in whole or in part, of the other Borrowers.  Without limiting the generality of the foregoing, each Borrower (in its capacity as a joint and several obligor in respect of the obligations of the other Borrowers) assents to any other action or delay in acting or any failure to act on the part of an Agent or any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder which might, but for the provisions of this Section 2.8, afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 2.8, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the obligations of such Borrower under this Section 2.8 shall not be discharged except by 

 

57

 

performance and then only to the extent of such performance.  The obligations of each Borrower under this Section 2.8 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower or a Lender.  The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any of the Lenders.

 

(d)                                 The provisions of this Section 2.8 are made for the benefit of the Lenders and their successors and assigns, and subject to Section 14.3 hereof, may be enforced by them from time to time against any Borrower as often as occasion therefor may arise and without requirement on the part of an Agent or any Lender first to marshal any of its claims or to exercise any of its rights against the other Borrowers or to exhaust any remedies available to it against the other Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 2.8 shall remain in effect until all the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations is rescinded or must otherwise be restored or returned by an Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.8 will forthwith be reinstated and in effect as though such payment had not been made.

 

(e)                                  Notwithstanding any provision to the contrary contained herein or in any of the other Financing Agreements, to the extent the obligations of a Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable Federal or State law relating to fraudulent conveyances or transfers) then the obligations of such Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether Federal or State and including, without limitation, the Bankruptcy Code of the United States).

 

(f)                                    With respect to the Obligations arising as a result of the joint and several liability of Borrowers hereunder with respect to Loans, Letter of Credit Obligations or other extensions of credit made to the other Borrowers hereunder, each of Borrowers waives, until the Obligations shall have been paid in full and this Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which an Agent or any Lender now has or may hereafter have against any Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to an Agent or any Lender.   Any claim which any Borrower may have against any other Borrower with respect to any payments to Agents or Lenders hereunder or under any of the other Financing Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations.  Upon the occurrence of any Event of Default and for so long as the same is continuing, Agents and Lenders may proceed directly and at once, without notice, against (i) with respect to Obligations of Borrowers, either or both of them or (ii) with respect to Obligations of any Borrower, to collect and recover the full amount, or any portion of the applicable Obligations, without first proceeding against the other applicable Borrowers or any other Person, or against any security or collateral for the Obligations.  Each Borrower consents and agrees that Agents and Lenders shall be under no obligation to marshal any assets in favor of Borrower(s) or against or in payment of any or all of the Obligations.

 

2.9                                 Commitments.  The aggregate amount of each Lender’s Pro Rata Share of the Revolving Loans and Letter of Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the same may from time to time be amended in accordance with the provisions hereof.

 

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SECTION 3.                                                    INTEREST AND FEES

 

3.1                                 Interest.

 

(a)                                  Borrowers shall pay to Administrative Agent, for the benefit of Lenders, interest on the outstanding principal amount of the Loans at the Interest Rate.  All interest accruing hereunder on and after the date of any Event of Default or termination hereof shall be payable on demand.

 

(b)                                 Each Borrower (or Borrower Agent on behalf of such Borrower) may from time to time request Eurodollar Rate Loans or may request that Base Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans continue for an additional Interest Period.  Such request from a Borrower (or Borrower Agent on behalf of such Borrower) shall specify the amount of the Eurodollar Rate Loans or the amount of the Base Rate Loans to be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued (subject to the limits set forth below) and the Interest Period to be applicable to such Eurodollar Rate Loans (and if it does not specify such Interest Period shall be deemed to be a one (1) month period).  Subject to the terms and conditions contained herein, three (3) Business Days after receipt by Administrative Agent of such a request from a Borrower (or Borrower Agent on behalf of such Borrower), which may be telephonic (and followed by a confirmation in writing if requested by Administrative Agent) such Eurodollar Rate Loans shall be made or Base Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may be; provided, that,   (i) no Event of Default shall exist or have occurred and be continuing, (ii) no Borrower or Borrower Agent shall have sent any notice of termination of this Agreement, (iii) such Borrower (or Borrower Agent on behalf of such Borrower) shall have complied with such customary procedures as are established by Administrative Agent and specified by Administrative Agent to Borrower Agent from time to time for requests by Borrowers for Eurodollar Rate Loans, (iv) no more than six (6) Interest Periods may be in effect at any one time, (v) the aggregate amount of the Eurodollar Rate Loans must be in an amount not less than $1,000,000 or an integral multiple of $500,000 in excess thereof, and (vi) Administrative Agent and each Lender shall have determined that the Interest Period or Adjusted Eurodollar Rate is available to Administrative Agent and such Lender and can be readily determined as of the date of the request for such Eurodollar Rate Loan by such Borrower.  Any request by or on behalf of a Borrower for Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable.  Notwithstanding anything to the contrary contained herein, Administrative Agent and Lenders shall not be required to purchase United States Dollar deposits in the London interbank market or other applicable Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as if Administrative Agent and Lenders had purchased such deposits to fund the Eurodollar Rate Loans.

 

(c)                                  Any Eurodollar Rate Loans shall automatically convert to Base Rate Loans upon the last day of the applicable Interest Period, unless Administrative Agent has received a request to continue such Eurodollar Rate Loan at least three (3) Business Days prior to such last day in accordance with the terms hereof and Borrowers are entitled to such Eurodollar Rate Loan under the terms hereof.

 

(d)                                 Interest shall be payable by Borrowers to Administrative Agent, for the account of Lenders, monthly in arrears not later than the first Business Day of each calendar month and shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed, other than for Base Rate Loans based on the Prime Rate which shall be calculated on the basis of three hundred sixty-five (365) or three hundred sixty-six (366) day year, as applicable, and actual days elapsed.  The interest rate on non-contingent Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an amount equal to each increase or decrease in the Base Rate effective on the date any change in such Base Rate is effective.

 

3.2                                 Fees.

 

(a)                                  Borrowers shall pay to Administrative Agent, for the account of Lenders, monthly an unused line fee at a rate equal to the applicable rate (on a per annum basis) determined as provided below calculated upon the amount by which the Maximum Credit exceeds the average daily principal balance of the 

 

59

 

outstanding Revolving Loans and Letters of Credit during the immediately preceding month (or part thereof)  (the “Average Drawn Amount”) so long as any Obligations are outstanding.  Such fees shall be payable on the first Business Day of each month in arrears and calculated based on a three hundred sixty (360) day year and actual days elapsed.  Such percentages shall be increased or decreased, as the case may be, to the applicable percentage (on a per annum basis) set forth below based on the Average Drawn Amount for the immediately preceding three (3) month period commencing on the first day of the month of such period.

 

	
Tier
    	
 
    	
Average Drawn Amount
    	
 
    	
Unused Line 
   Fee
    	
 
    
	
1
    	
 
    	
Less than or equal   to 33-1/3% of Maximum Credit
    	
 
    	
0.625
    	
%
    
	
2
    	
 
    	
Greater than 33-1/3%   and less than or equal to 66-2/3% of Maximum Credit
    	
 
    	
0.50
    	
%
    
	
3
    	
 
    	
Greater than 66-2/3%   of Maximum Credit
    	
 
    	
0.375
    	
%
    

 

provided, that, (i) the applicable percentage shall be calculated and established once each calendar quarter and shall remain in effect until adjusted thereafter after the end of the next calendar quarter, and (ii) notwithstanding anything to the contrary contained herein, the applicable percentages through June 30, 2011 shall be the amount for Tier 2  set forth above.

 

(b)                                 Borrowers shall pay to Administrative Agent, for the benefit of Lenders, monthly a fee at the applicable rate determined as provided below (on a per annum basis) on the average daily outstanding balance of Letters of Credit for the immediately preceding month (or part thereof), payable in arrears as of the first Business Day of each month, computed for each day from the date of issuance to the date of expiration. Such percentages shall be increased or decreased, as the case may be, to the applicable percentage (on a per annum basis) set forth below based on the Quarterly Average Excess Availability for immediately preceding three (3) month period commencing on the first day of the month of such period.

 

	
Tier
    	
 
    	
Quarterly Average 
   Excess Availability
    	
 
    	
LC Fee Rate
    	
 
    
	
1
    	
 
    	
Greater than 66-2/3%   of Maximum Credit
    	
 
    	
2.25
    	
%
    
	
2
    	
 
    	
Greater than 33-1/3%   and less than or equal to 66-2/3% of Maximum Credit
    	
 
    	
2.50
    	
%
    
	
3
    	
 
    	
Less than or equal   to 33-1/3% of Maximum Credit
    	
 
    	
2.75
    	
%
    

 

provided, that, (i) the applicable percentage shall be calculated and established once each calendar quarter and shall remain in effect until adjusted thereafter after the end of the next calendar quarter, (ii) notwithstanding anything to the contrary contained herein, the applicable percentages through June 30, 2011 shall be the amount for Tier 2  set forth above, and (iii) Borrowers shall, at Administrative Agent’s option or at the written direction of the Required Lenders, pay such fees at a rate two (2%) percent greater than the highest rate above on such average daily maximum amount for: (A) the period from and after the date of termination or non-renewal hereof until Lenders have received full and final payment of all Obligations (notwithstanding entry of a judgment against any Borrower or Guarantor) and (B) the period from and after the date of the occurrence of an Event of Default for so long as such Event of Default is continuing as determined by Administrative Agent.  Such letter of credit fees shall be calculated on the basis

 

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of a three hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such fee shall survive the termination or non-renewal of this Agreement.   In addition to the letter of credit fees provided above, Borrowers shall pay to Issuing Bank for its own account (without sharing with Lenders) the letter of credit fronting fee of .125% per annum and the other customary charges from time to time of Issuing Bank with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit.

 

(c)                                  Borrowers shall pay to Administrative Agent and Arrangers the other fees and amounts set forth in the Engagement Letter in the amounts and at the times specified therein or as has otherwise been agreed by or on behalf of Borrowers.  To the extent payment in full of the applicable fee is received by Administrative Agent from Borrowers on or about the date hereof, Administrative Agent shall pay to each Lender its share of such fees in accordance with the terms of the arrangements of Administrative Agent with such Lender.

 

3.3                                 Inability to Determine Applicable Interest Rate.  If Administrative Agent shall determine in good faith (which determination shall, absent manifest error, be final and conclusive and binding on all parties hereto) that on any date by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to Eurodollar Rate Loans on the basis provided for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice to Borrower Agent and each Lender of such determination.  Upon such date no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower Agent and Lenders that the circumstances giving rise to such notice no longer exist and any request for Loans or the conversion or continuation of any Eurodollar Rate Loans received by Administrative Agent shall be deemed to be a request, or a continuation or conversion, for or into Base Rate Loans.

 

3.4                                 Illegality.  Notwithstanding anything to the contrary contained herein, if (a) any change in any law or interpretation thereof by any Governmental Authority makes it unlawful for a Lender to make or maintain a Eurodollar Rate Loan or to maintain any Commitment with respect to a Eurodollar Rate Loan or (b) a Lender determines in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) has become impracticable as a result of a circumstance that adversely affects the London interbank market or the position of such Lender in such market, then such Lender shall give notice thereof to Administrative Agent and Borrower Agent and may (i) declare that Eurodollar Rate Loans will not thereafter be made by such Lender, such that any request for a Eurodollar Rate Loans from such Lender shall be deemed to be a request for a Base Rate Loan unless such Lender’s declaration has been withdrawn (and it shall be withdrawn promptly upon the cessation of the circumstances described in clause (a) or (b) above and (ii) require that all outstanding Eurodollar Rate Loans made by such Lender be converted to Base Rate Loans immediately, in which event all outstanding Eurodollar Rate Loans of such Lender shall be so converted.

 

3.5                                 Increased Costs.  If any Change in Law shall: (a) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted Eurodollar Rate) or the Issuing Bank; (b) subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in respect thereof (except for Taxes or Other Taxes covered by Section 6.8 and the imposition of, or any change in the rate of, any duties, taxes, levies, imposts, fees, deductions, charges or withholdings of any kind, with respect to any and all payments by or on account of any of the Obligations, described in Sections 6.8(a)(i), (ii) and (iii)); or (c) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein, and the result 

 

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of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Bank, Borrowers 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, as the case may be, for such additional costs incurred or reduction suffered.

 

3.6                                 Capital Requirements.  If any Lender or the Issuing Bank determines that any Change in Law affecting such Lender or the Issuing Bank or any lending office of such Lender or such Lender’s or the Issuing Bank’s holding company, if any, regarding capital 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 such Lender or the Loans made by, or participations in Letters of Credit 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), then from time to time Borrowers 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.

 

3.7                                 Certificates for Reimbursement.  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 Sections 3.5 or 3.6 and delivered to Borrower Agent shall be conclusive absent manifest error.  Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.

 

3.8                                 Delay in Requests.  Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to Sections 3.5 or 3.6 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred or reductions occurring more than one hundred eighty (180) days prior to the date that such Lender or the Issuing Bank, as the case may be, becomes aware of the event giving rise to such Lender’s or Issuing Bank’s claim for compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the one hundred eighty (180) day period referred to above shall be extended to include the period of retroactive effect thereof).

 

3.9                                 Mitigation; Replacement of Lenders.

 

(a)                                  If any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6, or Borrowers are required to pay any additional amount to any Agent, any Lender or Issuing Bank or any Governmental Authority for the account of any Agent, any Lender or Issuing Bank pursuant to Section 6.8, then such Agent, such Lender or Issuing Bank, as the case may be, shall, if requested by Borrower Agent, use reasonable efforts (subject to overall policy considerations of such Lender, Issuing Bank or Agent) to designate a different lending office for funding or booking its Loans hereunder, to assign its rights and obligations hereunder to another of its offices, branches or affiliates or to take such other actions as such Lender, Issuing Bank or Agent determines, if, in the reasonable judgment of such Agent, such Lender or such Issuing 

 

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Bank, such designation, assignment or other action (i) would eliminate or reduce amounts payable pursuant to such Sections in the future and (ii) would not subject such Agent, such Lender or such Issuing Bank to any unreimbursed cost or expense and such Agent, such Lender or such Issuing Bank would not suffer any economic, legal or regulatory disadvantage.  Nothing in this Section 3.9 shall affect or postpone any of the obligations of Borrowers or the rights of such Agent, such Lender or such Issuing Bank pursuant to this Section 3.9.  Borrowers hereby agree to pay on demand all reasonable costs and expenses incurred by such Agent, such Lender or such Issuing Bank in connection with any such designation or assignment.

 

(b)                                 If any Lender requests compensation under Sections 3.4, 3.5 or 3.6, if Borrowers are required to pay any additional amount to any Lender or Issuing Bank or Governmental Authority pursuant to Section 6.8, or if a Lender becomes a Defaulting Lender, then Borrower Agent may, at its sole expense and effort, upon notice to such Lender, Issuing Bank and Administrative Agent, replace such Lender or Issuing Bank by requiring such Lender or Issuing Bank to assign and delegate (and such Lender and Issuing Bank shall be obligated to assign and delegate), without recourse (in accordance with and subject to the restrictions contained in Section 13.7), all of its interests, rights and obligations under this Agreement to an Eligible Transferee that shall assume such obligations, provided, that, (i) such Lender shall have received payment of an amount equal to the outstanding principal amount of its Loans and participations in Letter of Credit Obligations that it has funded, if any, accrued interest thereon, accrued fees and other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal) and Borrower Agent (in the case of accrued interest, fees and other amounts, including amounts under Section 3.10), (ii) such assignment will result in a reduction in such compensation and payments, and (iii) such assignment does not conflict with applicable laws or regulations.  A Lender and an Issuing Bank shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or Issuing Bank or otherwise, the circumstances entitling the Borrower Agent to require such assignment and delegation cease to apply.  Nothing in this Section 3.9 shall impair any rights that any Borrower or Administrative Agent may have against any Lender that is a Defaulting Lender.  Each Lender and Issuing Bank hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender or Issuing Bank, as the case may be, as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s or such Issuing Bank’s interests hereunder in the circumstances contemplated by this Section 3.9(b) and Section 13.3(c).

 

(c)                                  In addition, a Non-Consenting Lender may be replaced as provided in Section 13.3(c).

 

3.10                           Funding Losses.  Borrowers shall pay to Administrative Agent its customary administrative charge and to each Lender all losses, expenses and liabilities (including any interest paid by such Lender to Lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or redeployment of such) that it sustains (a) if for any reason (other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a request for borrowing, or a conversion to or continuation of, any Eurodollar Rate Loan does not occur on a date specific therefor in a request for conversion or continuation, (b) if any prepayment or other principal payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to such Loan, or (c) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by a Borrower (or on its behalf by Borrower Agent).  This covenant shall survive the termination or non-renewal of this Agreement and the payment of the Obligations.

 

3.11                           Maximum Interest.  Notwithstanding anything to the contrary contained in this Agreement or any of the other Financing Agreements, in no event whatsoever shall the aggregate of all amounts that are contracted for, charged or received by Administrative Agent or any Lender pursuant to the terms of this Agreement or any of the other Financing Agreements and that are deemed interest under applicable law exceed the Maximum Interest Rate (including, to the extent applicable, the provisions of Section 5197 of the Revised Statutes of the United States of America as amended, 12 U.S.C. Section 85, as amended).  In no 

 

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event shall any Borrower or Guarantor be obligated to pay interest or such amounts as may be deemed interest under applicable law in amounts which exceed the Maximum Interest Rate.  In the event any Interest is charged or received in excess of the Maximum Interest Rate (“Excess”), each Borrower and Guarantor acknowledges and stipulates that any such charge or receipt shall be the result of an accident and bona fide error, and that any Excess received by Administrative Agent or any Lender shall be applied, first, to the payment of the then outstanding and unpaid principal hereunder; second to the payment of the other Obligations then outstanding and unpaid; and third, returned to such Borrower or Guarantor.  All monies paid to Administrative Agent or any Lender hereunder or under any of the other Financing Agreements, whether at maturity or by prepayment, shall be subject to any rebate of unearned interest as and to the extent required by applicable law. For the purpose of determining whether or not any Excess has been contracted for, charged or received by Administrative Agent or any Lender, all interest at any time contracted for, charged or received from any Borrower or Guarantor in connection with this Agreement or any of the other Financing Agreements shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread during the entire term of this Agreement in accordance with the amounts outstanding from time to time hereunder and the Maximum Interest Rate from time to time in effect in order to lawfully charge the maximum amount of interest permitted under applicable laws.  The provisions of this Section 3.11 shall be deemed to be incorporated into each of the other Financing Agreements (whether or not any provision of this Section is referred to therein).

 

3.12                           No Requirement of Match Funding.  Notwithstanding anything to the contrary contained herein, Administrative Agent and Lenders shall not be required to acquire US Dollar deposits in the London interbank market or any other offshore US Dollar market to fund any Eurodollar Rate Loan or to otherwise match fund any Obligations as to which interest accrues based on the Eurodollar Rate.  All of the provisions of this Section 3 shall be deemed to apply as if Administrative Agent, each Lender or any Participant had acquired such deposits to fund any Eurodollar Rate Loan or any other Obligation as to which interest is accruing at the Eurodollar Rate by acquiring such US Dollar deposits for each Interest Period in the amount of the Eurodollar Rate Loans or other applicable Obligations.

 

SECTION 4.                                                    CONDITIONS PRECEDENT

 

4.1                                 Conditions Precedent to Effectiveness of Agreement to Make Initial Loans and Letters of Credit.  The agreement of Lenders to make the Loans and of Issuing Bank to issue Letters of Credit shall become effective upon the satisfaction, or waiver, immediately prior to or concurrently therewith each of the following conditions precedent:

 

(a)                                  Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation, including all amendments thereto, of each Borrower and Guarantor, certified as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing of each Borrower and Guarantor as of a recent date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of each Borrower and Guarantor dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Borrower or Guarantor as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Borrower or Guarantor authorizing the execution, delivery and performance of the Financing Agreements to which such Person is a party and, in the case of Borrowers, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation of such Borrower or Guarantor have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing any Financing Agreement or any other document delivered in connection herewith on behalf of such Borrower or Guarantor; (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary 

 

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or Assistant Secretary executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Lenders, Issuing Bank or Agents may reasonably request;

 

(b)                                 no material adverse change shall have occurred in the assets, business, operations or profits of Borrowers and Guarantors, taken as a whole, since December 31, 2009 and no change or event shall have occurred which would impair in any material respect the ability of Borrowers and Guarantors taken as a whole to perform their obligations hereunder or under any of the other Financing Agreements to which they are a party or of an Agent or any Lender to enforce the Obligations or realize upon the Collateral in all material respects, in each case as determined by Administrative Agent in its discretion in good faith;

 

(c)                                  [Reserved];

 

(d)                                 Administrative Agent shall have received, in form and substance reasonably satisfactory to Administrative Agent, all consents, waivers, acknowledgments and other agreements from third persons which Administrative Agent may deem necessary or desirable in order to permit, protect and perfect Collateral Agent’s security interests in and liens upon the Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing Agreements, including, without limitation, Collateral Access Agreements; provided, that, delivery of Collateral Access Agreements as to specific locations shall not be a condition of closing, so long as all other conditions are met after giving effect to any Reserves established by Agents in respect of amounts due or to become due to the owner, lessor or operator thereof as provided for in the definition of Reserves;

 

(e)                                  Administrative Agent shall have received, in form and substance reasonably satisfactory to Agents, all releases, terminations and such other documents as Administrative Agent may reasonably request to evidence and effectuate the termination of the financing arrangements pursuant to the Existing Credit Agreements, and the termination and release by the agent under such arrangements, of any interest in and to any assets and properties of Borrowers and Guarantors, duly authorized, executed and delivered by each of them, including, but not limited to, the authorization to file UCC financing statement amendments to terminate all UCC financing statements previously filed by or on behalf of any or all of them or their predecessors, as secured party, and any Borrower or Guarantor or their predecessors, as debtor and the termination of any deposit account control agreement. The Refinancing Transactions shall have been consummated.  Immediately after giving effect to the transactions contemplated hereby, Parent and its Subsidiaries shall have outstanding no Indebtedness or preferred stock other than (a) Indebtedness outstanding under this Agreement, (b) Indebtedness outstanding under the Term Loan Agreement, (c) Indebtedness outstanding pursuant to Section 10.3(c) and (d) Indebtedness set forth in the Information Certificate;

 

(f)                                    Agents shall have received (i) a Borrowing Base Certificate from the Borrower Agent in form and substance reasonably satisfactory to Agents demonstrating that, on the Closing Date, after giving effect to any rollover of Existing Letters of Credit and the payment by the Borrowers of all fees and expenses incurred in connection with the Refinancing Transactions, the aggregate amount of the Excess Availability as determined by Agents, as of January 31, 2011, shall be not less than $10,000,000 after giving effect to the initial Loans made or to be made and Letters of Credit issued or to be issued in connection with the initial transactions hereunder and (ii) projections in form and substance reasonably satisfactory to Agents demonstrating that, for the twelve month period commencing on the Closing Date, the Borrowers shall at all times have Excess Availability in an amount not less than $10,000,000;

 

(g)                                 Agents shall have received evidence, in form and substance reasonably satisfactory to Agents, that Collateral Agent has a valid perfected first-priority security interest in all of the ABL Priority Collateral and a valid perfected second-priority in all of the Term Loan Priority Collateral (except, in each case, as to (i) priority, subject to the liens permitted under clauses (b), (c), (i) and (j) of the definition of 

 

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Permitted Liens, to the extent that such liens have priority over the liens of Collateral Agent under applicable law and except for such items of Collateral as Administrative Agent may determine not to perfect Collateral Agent’s security interest in based on the de minimis value thereof relative to the cost of such perfection and (ii) Intellectual Property registered, applied for or subsisting solely outside of the United States of America);

 

(h)                                 Agents (or Control Agent in the case of clauses (E) and (H) below) shall have received, in form and substance reasonably satisfactory to the Agents:

 

(A)                              a collateral perfection certificate with respect to each Borrower and Guarantor dated the Closing Date and duly executed on behalf of the Borrowers and Guarantors;

 

(B)                                searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each Borrower and Guarantor and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Collateral Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens and tax lien, judgment and pending litigation searches;

 

(C)                                searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by the Administrative Agent in order to perfect the Collateral Agent’s security interest in the Intellectual Property;

 

(D)                               completed UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Collateral Agent’s security interest in the Collateral (including any fixture filings requested by the Administrative Agent);

 

(E)                                 stock or membership certificates, if any, evidencing the Equity Interests pledged to the Collateral Agent pursuant to the Pledge Agreement and duly executed in blank undated stock or transfer powers;

 

(F)                                 duly executed consents as are necessary to perfect the Lenders’ security interest in the Collateral;

 

(G)                                all instruments and chattel paper in the possession of any of the Borrowers and Guarantors, together with allonges or assignments as may be necessary or appropriate to perfect the Agents’ and the Lenders’ security interest in the Collateral; and

 

(H)                               Deposit Account Control Agreements reasonably satisfactory to the Agents with respect to each deposit account, except payroll accounts and to the extent otherwise determined by the Administrative Agent; provided that, to the extent the Borrowers and the Guarantors are not able to obtain the Deposit Account Control Agreement prior to the Closing Date, despite their use of commercially reasonable efforts to do so, the entering into the Deposit Account Control Agreements shall not be a condition to closing but the Borrowers and the Guarantors will be obligated to enter into such Deposit Account Control Agreements within 60 days after the Closing Date;

 

(i)                                     Administrative Agent shall have received a borrowing request as of the date hereof as completed in a manner reasonably satisfactory to Administrative Agent and duly authorized, executed and delivered on behalf of Borrowers;

 

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(j)                                     Administrative Agent shall have received an opinion or opinions (including, if requested by the Administrative Agent, local counsel opinions) of counsel for the Borrowers and Guarantors, dated the Closing Date and addressed to the Agents, the Lenders and the Issuing Bank, in form and substance reasonably acceptable to the Administrative Agent (which shall include, without limitation, opinions with respect to the due organization and valid existence of each Borrower and Guarantor, opinions as to perfection of the Liens granted to the Collateral Agent pursuant to the Financing Agreements and opinions as to the non-contravention of the Borrowers’ and Guarantors’ organizational documents and relevant Material Contracts);

 

(k)                                  Agents shall have received copies of insurance policies or certificates and endorsements of insurance evidencing liability, casualty, property and business interruption insurance meeting the requirements set forth herein or in any other Financing Agreement.  Subject to the Intercreditor Agreement, Collateral Agent shall be named (i) as lender’s loss payee, as its interest may appear, with respect to any such insurance providing coverage in respect of any Collateral and (ii) as additional insured, as its interest may appear, with respect to any such insurance providing liability coverage, and the Borrowers and Guarantors will use their commercially reasonable efforts to have each provider of any such insurance agree, by endorsement upon the policy or policies issued by it or by independent instruments to be furnished to the Agents, that it will give the Agents thirty (30) days prior written notice before any such policy or policies shall be altered or cancelled;

 

(l)                                     Agents shall have received (i) counterparts of this Agreement, executed by a duly authorized officer of each party hereto, (ii) for the account of each Lender requesting a promissory note, a promissory note, (iii) counterparts of the Intercreditor Agreement, Pledge Agreement, Guarantee and IP Security Agreement, in each case conforming to the requirements of this Agreement and executed by duly authorized officers of the Borrowers, Guarantors or other Persons, as applicable and (iv) counterparts of any other Financing Agreements and all instruments and documents hereunder and thereunder shall have been duly executed by the duly authorized officers of the parties thereto and delivered to Agents, in form and substance reasonably satisfactory to Agents;

 

(m)                               to the extent there exists any Mortgaged Property on the Closing Date, Agents shall have received in form and substance reasonably satisfactory to the Agents:

 

(i)                                     fully executed and notarized counterparts of the Mortgages encumbering the Mortgaged Property;

 

(ii)                                  a title report in respect of each of the Mortgaged Properties;

 

(iii)                               with respect to each Mortgaged Property, a Title Insurance Policy issued by the Title Insurance Company assuring the Agents that the Mortgage with respect to such Mortgaged Property creates a valid and enforceable second priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Permitted Liens, which Title Insurance Policy shall be in form and substance reasonably satisfactory to the Agents and shall provide for affirmative insurance and such reinsurance as the Agents may reasonably request, all of the foregoing in form and substance reasonably satisfactory to the Agents;

 

(iv)                              evidence as to (A) whether any Mortgaged Property is a Flood Hazard Property and (B) if any Mortgaged Property is a Flood Hazard Property, (x) whether the community in which such Mortgaged Property is located is participating in the National Flood Insurance Program, (y) the applicable Borrower’s or Guarantor’s written acknowledgment of receipt of written notification from the Agents (I) as to the fact that such Mortgaged Property is a Flood Hazard Property and (II) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (z) copies of insurance policies or certificates of insurance of the Borrowers and 

 

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Guarantors and their respective Subsidiaries evidencing flood insurance reasonably satisfactory to the Agents and naming the Collateral Agent as loss payee on behalf of the Administrative Agent, Lenders and Issuing Bank;

 

(v)                                 either (A) maps or plats of an as-built survey of the sites of the Mortgaged Properties certified to the Agents and the Title Insurance Company in a manner reasonably satisfactory to them, dated a date satisfactory to each of the Agents and the Title Insurance Company by an independent professional licensed land surveyor reasonably satisfactory to each of the Agents and the Title Insurance Company, in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 2005, or (B) affidavits of “no change” permitting the Title Insurance Company to provide survey coverage;

 

(vi)                              to the extent requested by the Administrative Agent, opinions of counsel to the Borrowers and Guarantors for each jurisdiction in which the Mortgaged Properties are located;

 

(vii)                           to the extent available, zoning letters from each municipality or other Governmental Authority for each jurisdiction in which the Mortgaged Properties are located; and

 

(viii)                        an appraisal of each owned Mortgaged Property, in form and substance reasonably satisfactory to the Agents;

 

provided that, to the extent the Borrowers and the Guarantors are not able to obtain the aforementioned Mortgages and other documentation with respect to the Mortgaged Properties set forth in this clause (m) prior to the Closing Date, despite their use of commercially reasonable efforts to do so, the entering into of the Mortgages and the delivery of other documentation required by this clause (m) shall not be a condition to closing but the Borrowers and the Guarantors will be obligated to enter into such Mortgages and to deliver such documentation within sixty (60) days after the Closing Date.

 

(n)                                 Borrowers shall have received gross cash proceeds of not less than $285,000,000 in gross cash proceeds from the borrowings under the Term Loan Agreement;

 

(o)                                 Administrative Agent shall have received (i) GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of Parent for the 2007, 2008 and 2009 fiscal years (and, to the extent available, the related unaudited consolidating financial statements) and (ii) GAAP unaudited consolidated and (to the extent available) consolidating balance sheets and related statements of income, stockholders’ equity and cash flows of Parent for (A) each subsequent fiscal quarter ended at least 45 days before the Closing Date and (B) each fiscal month after the most recent fiscal quarter for which financial statements were received by Administrative Agent as described above and ended at least 30 days before the Closing Date, which financial statements shall not be materially inconsistent with the financial statements or forecasts previously provided to Administrative Agent;

 

(p)                                 Administrative Agent shall have received a pro forma consolidated balance sheet and related pro forma consolidated statements of income and cash flows of Parent as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements have been delivered pursuant to paragraph (o) above, prepared after giving effect to the Refinancing Transactions as if the Refinancing Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements), which financial statements shall not be materially inconsistent with the forecasts previously provided to Administrative Agent;

 

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(q)                                 Administrative Agent shall have received a certificate, in form and substance reasonably satisfactory to Administrative Agent, from the chief financial officer of Parent certifying that Parent and its Subsidiaries on a consolidated basis, after giving effect to the Refinancing Transactions, are Solvent;

 

(r)                                    Agents, Arrangers and Lenders shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out of pocket expenses required to be reimbursed or paid by Borrowers hereunder;

 

(s)                                  Administrative Agent shall have received a certificate, dated the Closing Date and signed by the chief financial officer of Parent, confirming compliance with the conditions precedent set forth in paragraphs (a), (b) and (c) of Section 4.2; and

 

(t)                                    Lenders shall have received, at least five (5) Business Days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.

 

4.2                                 Conditions Precedent to All Loans and Letters of Credit.  The obligation of Lenders to make the Loans, including the initial Loans, or of Issuing Bank to issue any Letter of Credit, including the initial Letters of Credit, is subject to the further satisfaction of, or waiver of, immediately prior to or concurrently with the making of each such Loan or the issuance of such Letter of Credit of each of the following conditions precedent:

 

(a)                                  all representations and warranties contained herein and in the other Financing Agreements that are qualified as to materiality or Material Adverse Effect shall be true and correct and the representations and warranties that are not so qualified shall be true and correct in all material respects, in each case with the same effect as though such representations and warranties had been made on and as of the date of the making of each such Loan or providing each such Letter of Credit and after giving effect thereto, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct to the extent required hereunder or under the other Financing Agreements on and as of such earlier date);

 

(b)                                 no law, regulation, order, judgment or decree of any Governmental Authority shall exist, and no action, suit, investigation, litigation or proceeding shall be pending or threatened in writing in any court or before any arbitrator or Governmental Authority, which purports to enjoin, prohibit, restrain or otherwise affect the making of the Loans or providing the Letters of Credit, or the consummation of the transactions contemplated pursuant to the terms hereof or the other Financing Agreements; and

 

(c)                                  no Default or Event of Default shall exist or have occurred and be continuing on and as of the date of the making of such Loan or providing each such Letter of Credit and after giving effect thereto.

 

SECTION 5.                                                    GRANT AND PERFECTION OF SECURITY INTEREST

 

5.1                                 Grant of Security Interest.  To secure payment and performance of all Obligations, each Borrower and Guarantor hereby grants to Collateral Agent, for itself and the benefit of the other Secured Parties, a continuing security interest in, a lien upon, and a right of set off against, and hereby assigns to Collateral Agent, for itself and the benefit of the other Secured Parties, as security, all personal and real property and fixtures, and interests in property and fixtures, of each Borrower and Guarantor, whether now owned or hereafter acquired or existing, and wherever located (together with all other collateral security for 

 

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the Obligations at any time granted to or held or acquired by an Agent or any Lender, collectively, the “Collateral”), including:

 

(a)                                  all Accounts;

 

(b)                                 all general intangibles, including, without limitation, all Intellectual Property;

 

(c)                                  all goods, including, without limitation, Inventory and Equipment;

 

(d)                                 all Mortgaged Property and fixtures;

 

(e)                                  all chattel paper, including, without limitation, all tangible and electronic chattel paper;

 

(f)                                    all instruments, including, without limitation, all promissory notes;

 

(g)                                 all documents;

 

(h)                                 all deposit accounts;

 

(i)                                     all letters of credit, banker’s acceptances and similar instruments and including all letter-of-credit rights;

 

(j)                                     all supporting obligations and all present and future liens, security interests, rights, remedies, title and interest in, to and in respect of Receivables and other Collateral, including (i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Receivables or other Collateral, including returned, repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or other persons securing the obligations of account debtors;

 

(k)                                  all (i) investment property (including securities, whether certificated or uncertificated, securities accounts, security entitlements, commodity contracts or commodity accounts) and (ii) monies, credit balances, deposits and other property of any Borrower or Guarantor now or hereafter held or received by or in transit to an Agent, any Lender or their respective Affiliates or at any other depository or other institution from or for the account of any Borrower or Guarantor, whether for safekeeping, pledge, custody, transmission, collection or otherwise;

 

(l)                                     all commercial tort claims, identified in the Information Certificate or for which notice is provided pursuant to Section 5.3(i);

 

(m)                               to the extent not otherwise described above, all Receivables;

 

(n)                                 all Records;

 

(o)                                 to the extent not otherwise included above, all other personal property of any kind; and

 

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(p)                                 all products and proceeds of the foregoing, in any form, including insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral.

 

To secure payment and performance of all Obligations, each Borrower and Guarantor hereby grants to the Control Agent, for itself and for the benefit of the Lenders and the Agents, a continuing security interest in, a lien upon, and a right of setoff against, and hereby assigns to the Control Agent, for itself and for the benefit of the Lenders and the Agents, all Control Collateral of each Borrower and Guarantor, whether now owned or hereafter acquired or existing, and wherever located.

 

5.2                                 Exclusions from Collateral.  Notwithstanding anything to the contrary contained in Section 5.1 above, the types or items of Collateral described in such Section shall not include Excluded Property.  Furthermore, no Borrower or Guarantor shall be required to take any action in any jurisdiction to create any security interest in assets located or titled outside of the United States of America or to perfect any security interest in such assets or to enter into any security agreements or pledge agreements governed by the laws of any jurisdiction outside the United States of America.

 

5.3                                 Perfection of Security Interests.

 

(a)                                  So long as any Obligations are outstanding the Commitments have not been terminated, each Borrower and Guarantor irrevocably and unconditionally authorizes Collateral Agent (or its agent) to file at any time and from time to time such financing statements with respect to the Collateral naming Collateral Agent or its designee as the secured party and such Borrower or Guarantor as debtor, as Collateral Agent may require, and including any other information with respect to such Borrower or Guarantor or otherwise required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction as Collateral Agent may determine, together with any amendment and continuations with respect thereto, which authorization shall apply to all financing statements filed on, prior to or after the date hereof.  Each Borrower and Guarantor hereby ratifies and approves all financing statements naming Collateral Agent or its designee as secured party and such Borrower or Guarantor, as the case may be, as debtor with respect to the Collateral (and any amendments with respect to such financing statements) filed by or on behalf of Collateral Agent prior to the date hereof and ratifies and confirms the authorization of Collateral Agent to file such financing statements (and amendments, if any).  Each Borrower and Guarantor hereby authorizes Collateral Agent to adopt on behalf of such Borrower and Guarantor any symbol required for authenticating any electronic filing.  In the event that the description of the collateral in any financing statement naming Collateral Agent or its designee as the secured party and any Borrower or Guarantor as debtor includes assets and properties of such Borrower or Guarantor that do not at any time constitute Collateral, whether hereunder, under any of the other Financing Agreements or otherwise, the filing of such financing statement shall nonetheless be deemed authorized by such Borrower or Guarantor to the extent of the Collateral included in such description and it shall not render the financing statement ineffective as to any of the Collateral or otherwise affect the financing statement as it applies to any of the Collateral.  So long as any Obligations are outstanding and the Commitments have not been terminated, in no event shall any Borrower or Guarantor at any time file, or permit or cause to be filed, any correction statement or termination statement with respect to any financing statement (or amendment or continuation with respect thereto) naming Collateral Agent or its designee as secured party and such Borrower or Guarantor as debtor, except as may be required in connection with the disposition of Collateral permitted hereunder.

 

(b)                                 Each Borrower and Guarantor does not have any chattel paper (whether tangible or electronic) or instruments as of the date hereof, except as set forth in the Information Certificate.  In the event that any Borrower or Guarantor shall be entitled to or shall receive any chattel paper or instrument for obligations in excess of $250,000 in any one case or in the aggregate that constitutes Collateral after the date hereof, Borrowers and Guarantors shall promptly notify Agents thereof in writing.  Promptly upon the receipt 

 

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thereof by or on behalf of any Borrower or Guarantor (including by any agent or representative), such Borrower or Guarantor shall deliver, or cause to be delivered to Collateral Agent (or Control Agent, as applicable), all tangible chattel paper and instruments that such Borrower or Guarantor has or may at any time acquire, accompanied by such instruments of transfer or assignment duly executed in blank as Collateral Agent may from time to time reasonably specify, in each case except as Agents may otherwise agree.  At Collateral Agent’s option, each Borrower and Guarantor shall, or Collateral Agent may at any time on behalf of any Borrower or Guarantor, cause the original of any such instrument or chattel paper to be conspicuously marked in a form and manner reasonably acceptable to Collateral Agent with the following legend (or a substantially similar legend) referring to chattel paper or instruments as applicable: “This [chattel paper][instrument] is subject to the security interest of Wells Fargo Capital Finance, LLC, as Collateral Agent and any sale, transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of such secured party.”

 

(c)                                  In the event that any Borrower or Guarantor shall at any time hold or acquire an interest in any electronic chattel paper or any “transferable record” (as such term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction) that constitute Collateral, such Borrower or Guarantor shall promptly notify Agents thereof in writing.  Promptly upon Agents’ request, such Borrower or Guarantor shall take, or cause to be taken, such actions as Agents may reasonably request to give Collateral Agent or Control Agent control of such electronic chattel paper under Section 9-105 of the UCC and control of such transferable record under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such jurisdiction.

 

(d)                                 Each Borrower and Guarantor does not have any deposit accounts as of the date hereof, except as set forth in the Information Certificate.  Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any deposit account, unless each of the following conditions is satisfied:  (i) Agents shall have received a prompt written notice of any Borrower’s or Guarantor’s opening or establishing such account which notice shall specify in reasonable detail and specificity reasonably acceptable to Agents the name of the account, the owner of the account, the name and address of the bank at which such account is opened or established, the individual at such bank with whom such Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank where such account is opened or maintained shall be reasonably acceptable to Agents, and (iii) within 30 days after the opening or establishing of such deposit account, such Borrower or Guarantor shall deliver to Agents a Deposit Account Control Agreement with respect to such deposit account duly authorized, executed and delivered by such Borrower or Guarantor and the bank at which such deposit account is opened and maintained; provided, that, Borrowers and Guarantors shall not be required to deliver a Deposit Account Control Agreement with a depository bank as to any deposit account that is specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s salaried employees; provided, that the aggregate balance in all such deposit accounts does not at any time exceed $500,000.

 

(e)                                  No Borrower or Guarantor owns or holds, directly or indirectly, beneficially or as record owner or both, any investment property, as of the date hereof, or have any investment account, securities account, commodity account or other similar account with any bank or other financial institution or other securities intermediary or commodity intermediary as of the date hereof, in each case except as set forth in the Information Certificate.

 

(i)                                     In the event that any Borrower or Guarantor shall be entitled to or shall at any time after the date hereof hold or acquire any certificated securities that constitute Collateral, such Borrower or Guarantor shall promptly deliver the original of same to Collateral Agent, accompanied by such 

 

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instruments of transfer or assignment duly executed in blank as Agents may specify.  If any securities that constitute Collateral, now or hereafter acquired by any Borrower or Guarantor are uncertificated and are issued to such Borrower or Guarantor or its nominee directly by the issuer thereof, such Borrower or Guarantor shall immediately notify Agents thereof and shall as Agents may specify, either (A) cause the issuer to agree to comply with instructions from Agents as to such securities, without further consent of any Borrower or Guarantor or such nominee, or (B) arrange for Collateral Agent to become the registered owner of the securities.

 

(ii)                                  Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any investment account, securities account, commodity account or other similar account, unless each of the following conditions is satisfied:  (i) Agents shall have received a prompt written notice of any Borrower’s or Guarantor’s opening or establishing such account which notice shall specify in reasonable detail and specificity reasonably acceptable to Agents the name of the account, the owner of the account, the name and address of the securities intermediary or commodities intermediary at which such account is opened or established, the individual at such intermediary with whom such Borrower or Guarantor is dealing and the purpose of the account, (ii) the securities intermediary or commodity intermediary (as the case may be) where such account is opened or maintained shall be reasonably acceptable to Agents, and (iii) within 30 days after the opening or establishing of such account, such Borrower or Guarantor shall deliver to Agents an account control agreement reasonably satisfactory to Agents with respect to such account duly authorized, executed and delivered by such Borrower or Guarantor and the securities intermediary or commodity intermediary at which such deposit account is opened and maintained.

 

(f)                                    Borrowers and Guarantors are not the beneficiary or otherwise entitled to any right to payment under any letter of credit, banker’s acceptance or similar instrument as of the date hereof, except as set forth in the Information Certificate.  In the event that any Borrower or Guarantor shall be entitled to or shall receive any right to payment under any letter of credit, banker’s acceptance or any similar instrument, whether as beneficiary thereof or otherwise after the date hereof involving an amount in excess of $250,000  in any one case or in the aggregate that constitute Collateral, such Borrower or Guarantor shall promptly notify Agents thereof in writing.  Such Borrower or Guarantor shall promptly, as Agents may specify, either (i) deliver, or cause to be delivered to Agents, with respect to any such letter of credit, banker’s acceptance or similar instrument, the written agreement of the issuer and any other nominated person obligated to make any payment in respect thereof (including any confirming or negotiating bank), in form and substance reasonably satisfactory to Agents, consenting to the assignment of the proceeds of the letter of credit to Collateral Agent by such Borrower or Guarantor and agreeing to make all payments thereon directly to Collateral Agent or as Agents may otherwise direct or (ii) cause Collateral Agent to become, at Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s acceptance or similar instrument (as the case may be).

 

(g)                                 Borrowers and Guarantors do not have any commercial tort claims as of the date hereof, except as set forth in the Information Certificate.  In the event that any Borrower or Guarantor shall at any time after the date hereof have any commercial tort claims involving a claim in excess of $500,000 that arise in connection with or are related to any other Collateral, such Borrower or Guarantor shall promptly notify Agents thereof in writing, which notice shall (i) set forth in reasonable detail the basis for and nature of such commercial tort claim and (ii) include the express grant by such Borrower or Guarantor to Collateral Agent of a security interest in such commercial tort claim (and the proceeds thereof).  In the event that such notice does not include such grant of a security interest, the sending thereof by such Borrower or Guarantor to Agents shall be deemed to constitute such grant to Collateral Agent. Upon the sending of such notice, any commercial tort claim described therein shall constitute part of the Collateral and shall be deemed included therein.  Without limiting the authorization of Collateral Agent provided in Section 5.3(a) hereof or otherwise arising by the execution by such Borrower or Guarantor of this Agreement or any of the other Financing Agreements, Collateral Agent is hereby irrevocably authorized from time to time and at any time to file such financing statements naming Collateral Agent or its designee as secured party and such Borrower 

 

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or Guarantor as debtor, or any amendments to any financing statements, covering any such commercial tort claim as Collateral. In addition, each Borrower and Guarantor shall promptly upon Agents’ request, execute and deliver, or cause to be executed and delivered, to Agents such other agreements, documents and instruments as Agents may reasonably require in connection with such commercial tort claim.

 

(h)                                 Borrowers and Guarantors do not have any goods, documents of title or other Collateral in the custody, control or possession of a third party as of the date hereof, except as set forth in the Information Certificate and except for goods located in the United States in transit to a location of a Borrower or Guarantor permitted herein in the ordinary course of business of a Borrower or Guarantor in the possession of the carrier transporting such goods.  In the event that any goods, documents of title or other Collateral are at any time after the date hereof having a value in excess of $250,000 in any one case or in the aggregate in the custody, control or possession of any other person not referred to in the Information Certificate or such carriers, Borrowers and Guarantors shall promptly notify Agents thereof in writing.  Promptly upon Agents’ request, Borrowers and Guarantors shall use their commercially reasonable efforts to deliver to Agents a Collateral Access Agreement duly authorized, executed and delivered by such person and the Borrower or Guarantor that is the owner of such Collateral; provided that in lieu of using such commercially reasonable efforts, the Borrowers and the Guarantors may elect that Agents establish Reserves in respect of amounts due or to become due to the owner, lessor or operator of the relevant location as provided for in the definition of Reserves.

 

(i)                                     Borrowers and Guarantors shall take any other actions reasonably requested by Agents from time to time to cause the attachment, perfection and, with respect to the ABL Priority Collateral, first priority and, with respect to the Term Loan Priority Collateral, second priority (behind only the liens permitted by clause (p) of the definition of “Permitted Liens”) of, and the ability of Collateral Agent to enforce, the security interest of Collateral Agent in any and all of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC or other applicable law, to the extent, if any, that any Borrower’s or Guarantor’s signature thereon is required therefor, which financing statements may describe the Collateral in the same manner as described in the applicable Financing Agreements or may contain an indication or description of Collateral that describes such property in any other manner as Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to it, including, without limitation, describing such property as “all assets” or “all personal property”, (ii) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Collateral Agent to enforce, the security interest of Collateral Agent in such Collateral, and (iii) obtaining the consents and approvals of any Governmental Authority or third party, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, and taking all actions required by any earlier versions of the UCC or by other law, as applicable in any relevant jurisdiction.  Notwithstanding anything to the contrary herein, (x) in no event shall any security agreements or pledges or other actions under foreign law be required in connection with the Collateral and (y) no actions other than executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC or other applicable law shall be required in connection with any Collateral consisting of titled goods, letters of credit, banker’s acceptances and similar instruments and including all letter-of-credit rights, or fixtures.

 

5.4                                 Control Collateral Held by Control Agent.

 

Notwithstanding any provision to the contrary herein, (a) any Collateral that constitutes Control Collateral that is held by Collateral Agent hereunder shall be deemed to be held by the Control Agent in accordance with the Intercreditor Agreement and (b) any Collateral that constitutes Control Collateral that is 

 

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held by Control Agent pursuant to the terms of the Intercreditor Agreement shall be deemed to be held by Collateral Agent for purposes of compliance with the terms herein.

 

5.5                                 Intercreditor Provisions.

 

Notwithstanding anything herein to the contrary, the lien and security interest granted to Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement with respect to matters referenced in the previous sentence, the terms of the Intercreditor Agreement shall govern.

 

SECTION 6.                                                    COLLECTION AND ADMINISTRATION

 

6.1                                 Borrowers’ Loan Accounts.  Administrative Agent shall maintain one or more loan account(s) on its books in which shall be recorded (a) all Loans, Letters of Credit and other Obligations and the Collateral, (b) all payments made by or on behalf of any Borrower or Guarantor and (c) all other appropriate debits and credits as provided in this Agreement, including fees, charges, costs, expenses and interest.  All entries in the loan account(s) shall be made in accordance with Administrative Agent’s customary practices as in effect from time to time.

 

6.2                                 Statements.  Administrative Agent shall render to Borrower Agent each month a statement setting forth the balance in the Borrowers’ loan account(s) maintained by Administrative Agent for Borrowers pursuant to the provisions of this Agreement, including principal, interest, fees, costs and expenses.  Each such statement shall be subject to subsequent adjustment by Administrative Agent but shall, absent manifest errors or omissions, be considered correct and deemed accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and Guarantors as an account stated except to the extent that Administrative Agent receives a written notice from Borrower Agent of any specific exceptions of Borrower Agent thereto within thirty (30) days after the date such statement has been received by Borrower Agent.  Until such time as Administrative Agent shall have rendered to Borrower Agent a written statement as provided above, the balance in any Borrower’s loan account(s) shall be presumptive evidence of the amounts due and owing to Agents and Lenders by Borrowers and Guarantors, absent manifest error.

 

6.3                                 Lenders’ Evidence of Debt.  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Obligations of each Borrower to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. Any such records shall be presumptively correct, absent manifest error, provided, that, the failure to make any entry or any error in such records, shall not affect any Lender’s Commitments hereunder or the Obligations in respect of any applicable Loans and in the event of any inconsistency between the Register and any Lender’s records, the Register shall govern.

 

6.4                                 Register.

 

(a)                                  Administrative Agent (or its agent or sub-agent appointed by it) shall maintain a register (the “Register”) for the recordation of the names and addresses of Lenders and the Commitments of, and principal amount of the Loans (the “Registered Loans”) and Letter of Credit Obligations owing to each Lender from time to time. The Register, as in effect at the close of business on the preceding Business Day, shall be available for inspection by Borrower Agent or any Lender (with respect to a Lender, solely with respect to the Obligations owing to such Lender) at a reasonable time and from time to time upon reasonable prior notice.  Administrative Agent shall record, or cause to be recorded, in the Register, the Commitments and the Loans in accordance with the provisions of Section 15.7 and Administrative Agent shall also 

 

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maintain a copy of each Assignment and Acceptance delivered to and accepted by it and shall modify the Register to give effect to each Assignment and Acceptance, and any such recording shall be presumptively correct, absent manifest error; provided, that, the failure to make any entry or any error in such records, shall not affect any Lender’s Commitments or Obligations in respect of any Loan.  Borrowers, Guarantors, Agents and Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  Borrowers hereby designate and authorize Administrative Agent, and Administrative Agent agrees, to maintain, or cause to be maintained as agent for Borrowers solely for purposes of maintaining the Register as provided in this Section 6.4(a).

 

(b)                                 Each Lender that grants a participation and each Granting Lender shall maintain a register as a non-fiduciary agent of Borrowers on which it enters the name and address of each Participant and SPC and the principal and interest amount of each Participant’s and SPC’s interest in the Loans and Letters of Credit held by it, as applicable (the “SPC/Participant Register”); provided that no Lender shall have any obligation to disclose any portion of the SPC/Participant Register to any Person except to the extent such disclosure is necessary to establish that the Loans and the Letters of Credit hereunder are in registered form for United States federal income tax purposes.  The entries in the SPC/Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each person whose name is recorded in the SPC/Participant Register as the owner of such participation or Loan(in the case of the SPC) for all purposes of this Agreement notwithstanding any notice to the contrary.

 

6.5                                 Promissory Notes.  Each Lender may at any time request that the Loans made by it be evidenced by a promissory note.  In such event, Borrowers shall 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) in a form furnished by Administrative Agent and reasonably acceptable to Borrower Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 15.7) be represented by one or more promissory notes in such form payable to the payee named therein.

 

6.6                                 Cash Management; Collection of Proceeds of Collateral.

 

(a)                                  Each Borrower and Guarantor shall establish and maintain, at its expense, deposit accounts and cash management services of a type and on terms, and with the banks, set forth on Schedule 8.10 to the Information Certificate and, subject to Section 5.3(d) hereof, such other banks as such Borrower or Guarantor may hereafter select.  The banks set forth on Schedule 8.10 of the Information Certificate constitute all of the banks with which Borrowers and Guarantors have deposit account and cash management arrangements as of the date hereof and identifies each of the deposit accounts at such banks that are used for receiving receipts from particular locations of a Borrower or otherwise describes the nature of the use of such deposit account by such Borrower or Guarantor (collectively, the “Cash Management Accounts” and individually a “Cash Management Account”).  Borrowers and Guarantors shall deliver, or cause to be delivered (within the timeframe provided for in Section 4.1(h) and 5.3(d)) to Agents, a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Cash Management Account or Concentration Account is maintained and the applicable Borrower or Guarantor; provided, that, Borrowers and Guarantors shall not be required to deliver a Deposit Account Control Agreement with a depository bank as to any deposit account (x) that is specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s salaried employees; provided, that the aggregate balance in all such deposit accounts does not at any time exceed $500,000.

 

(b)                                 Each Borrower shall deposit or cause to be deposited all proceeds of ABL Priority Collateral, including all proceeds from sales of Inventory, all amounts payable to each Borrower and Guarantor and all other proceeds of ABL Priority Collateral, from each location of such Borrower on each 

 

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Business Day into the Cash Management Account of such Borrower used for such purpose.  All such funds deposited into the Cash Management Accounts shall be sent by wire transfer or other electronic funds transfer no less frequently than twice each week (or more frequently upon Agents’ request at any time that a Cash Dominion Event exists) to the Concentration Accounts, except nominal amounts which are required to be maintained in such Cash Management Accounts under the terms of such Borrower’s arrangements with the bank at which such Cash Management Accounts are maintained, which nominal amounts shall not exceed $10,000 as to any individual Cash Management Account at any time.

 

(c)                                  Without limiting any other rights or remedies of Agents or Lenders, Administrative Agent may, at its option, instruct the depository banks at which the Concentration Accounts are maintained to transfer all available funds received or deposited into the Concentration Accounts to the Agent Payment Account at any time that a Cash Dominion Event exists.  At all times that Administrative Agent shall have notified any depository bank to transfer funds from a Concentration Account to the Agent Payment Account, all payments made to such Concentration Accounts, whether in respect of the Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent in respect of the Obligations and therefore shall constitute the property of Agents and Lenders to the extent of the then outstanding Obligations.

 

(d)                                 For purposes of calculating the amount of the Loans available to each Borrower, such payments will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Agent Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit the applicable loan account on such day, and if not, then on the next Business Day.

 

(e)                                  Each Borrower and Guarantor and their respective employees, agents and Subsidiaries shall, acting as trustee for Collateral Agent, receive, as the property of Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts or other ABL Priority Collateral which come into their possession or under their control and promptly upon receipt thereof, shall deposit or cause the same to be deposited in the Concentration Accounts, or remit the same or cause the same to be remitted, in kind, to Collateral Agent.  In no event shall the same be commingled with any Borrower’s or Guarantor’s own funds.  Borrowers agree to reimburse Agents on demand for any amounts owed or paid to any bank or other financial institution at which a Concentration Account or any other deposit account or investment account is established or any other bank, financial institution or other person involved in the transfer of funds to or from the Concentration Accounts arising out of Agents’ payments to or indemnification of such bank, financial institution or other person.  The obligations of Borrowers to reimburse Agents for such amounts pursuant to this Section 6.6 shall survive the termination of this Agreement.

 

6.7                                 Payments.

 

(a)                                  All Obligations shall be payable to the Agent Payment Account as provided in Section 6.6 or such other place as Administrative Agent may designate in writing to Borrower Agent from time to time.

 

(b)                                 Subject to the other terms and conditions contained herein, Administrative Agent shall apply payments received or collected from any Borrower or Guarantor or for the account of any Borrower or Guarantor (including the monetary proceeds of collections or of realization upon any Collateral by the Collateral Agent, which shall turn over such proceeds to the Administrative Agent for application as set forth below) as follows: first, to the payment in full of any fees, indemnities or expense reimbursements then due to Agents from any Borrower or Guarantor; second, ratably, to the payment in full of any fees, 

 

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indemnities, or expense reimbursements then due to Lenders and Issuing Bank from any Borrower or Guarantor; third, ratably, to the payment in full of interest due in respect of any Loans (and including any Special Agent Advances) and Letter of Credit Obligations; fourth, to the payment in full of principal in respect of Special Agent Advances; fifth, ratably, to the payment in full of principal in respect of the Revolving Loans  and to pay Obligations then due arising under or pursuant to any Bank Products of a Borrower or Guarantor with a Bank Product Provider, and sixth, to pay or prepay any other Obligations, whether or not then due, in such order and manner as Administrative Agent directs and for Administrative Agent to hold as cash collateral in respect of the Letter of Credit Obligations.  All references to the term “ratably” as used in this Section 6.7(b) shall mean pro  rata on the basis of the amount owing to any one Person in relationship to the amounts owing to all Persons of the same category of Obligations within the same level of priority.

 

(c)                                  Notwithstanding anything to the contrary contained in this Agreement, (i) unless so directed by Administrative Agent, or unless a Default or an Event of Default shall exist or have occurred and be continuing, Administrative Agent shall not apply any payments which it receives to any Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period applicable to any such Eurodollar Rate Loans or (B) in the event that there are no outstanding Base Rate Loans, and (ii) to the extent any Borrower or Guarantor uses any proceeds of the Loans or Letters of Credit to acquire rights in or the use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall be deemed applied first to the Obligations arising from Loans and Letter of Credit Obligations that were not used for such purposes and second to the Obligations arising from Loans and Letter of Credit Obligations the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order in which such Borrower or Guarantor acquired such rights in or the use of such Collateral.

 

(d)                                 At Administrative Agent’s option, all principal, interest, fees, costs, expenses and other charges provided for in this Agreement or the other Financing Agreements may be charged directly to the loan account(s) of any Borrower maintained by Administrative Agent.  If after receipt of any payment of, or proceeds of Collateral applied to the payment of, any of the Obligations, an Agent, any Lender or Issuing Bank is required to surrender or return such payment or proceeds to any Person for any reason, then the Obligations intended to be satisfied by such payment or proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not been received by such Agent or Lender.  Borrowers and Guarantors shall be liable to pay to Administrative Agent, and do hereby agree to indemnify and hold Agents and Lenders harmless for the amount of any payments or proceeds surrendered or returned.  This Section 6.7(d) shall remain effective notwithstanding any contrary action which may be taken by an Agent or any Lender in reliance upon such payment or proceeds.  This preceding two sentences of this Section 6.7(d) shall survive the payment of the Obligations and the termination of this Agreement.

 

6.8                                 Taxes.

 

(a)                                  Any and all payments by or on account of any of the Obligations shall be made free and clear of and without deduction or withholding for or on account of, duties, taxes, levies, imposts, fees, deductions, charges or withholdings of any kind imposed by any Governmental Authority with respect to such payments, excluding (i) in the case of each Lender, Issuing Bank and Agent (A) duties, taxes, levies, imposts, fees, deductions, charges, or withholdings of any kind measured by its net income, and franchise taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender, Issuing Bank or Agent (as the case may be) is incorporated or otherwise organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (B) any branch profits taxes imposed by the United States of America and any similar taxes imposed by any other jurisdiction in which any of the Borrowers are located, and (C) any United States withholding taxes due 

 

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or payable with respect to payments under the Financing Agreements under laws (including any statute, treaty or regulation) in effect on the date hereof (or, in the case of an Eligible Transferee, the date of the applicable Assignment and Acceptance) applicable to such Lender, Issuing Bank or Agent, as the case may be, except to the extent the relevant assignor was entitled to receive any payments under this Section 6.8, (ii) in the case of each Lender, Issuing Bank or Agent, duties, taxes, levies, imposts, fees, deductions, charges or withholdings of any kind imposed on it as a result of a present or former connection between such Lender, Issuing Bank or Agent (as the case may be) and the jurisdiction imposing such duties, taxes, levies, imposts, fees, deductions, charges or withholdings but excluding any such connection arising from the activities of such Lender, Issuing Bank or Agent (as the case may be) pursuant to or in respect of this Agreement or any of the other Financing Agreements including but not limited to, executing delivering or performing its obligations or receiving a payment under or enforcing this Agreement or any of the other Financing Agreements, and (iii) any withholding taxes imposed as a result of FATCA (all such non-excluded duties, taxes, levies, imposts, fees, deductions, charges, or withholdings and all interest, penalties or similar liabilities with respect thereto being hereinafter referred to as “Taxes”).  Notwithstanding the foregoing, any United States withholding taxes (other than withholding taxes imposed as a result of FATCA) imposed by any Governmental Authority with respect to payments by or on account of any of the Obligations as a result of any change in law occurring after the date hereof (or, in the case of an Eligible Transferee, the date of the applicable Assignment and Acceptance) shall be included in Taxes.

 

(b)                                 Subject to the last sentence of Section 6.8(g), if any Taxes shall be required by law to be deducted from or in respect of any sum payable in respect of the Obligations to any Lender, Issuing Bank or Agent (i) the sum payable by the Borrowers or Guarantors, as the case may be, shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 6.8), such Lender, Issuing Bank or Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the relevant Borrower or Guarantor shall make such deductions, (iii) the relevant Borrower or Guarantor shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law and (iv) the relevant Borrower or Guarantor shall deliver to Administrative Agent evidence of such payment.

 

(c)                                  In addition, each Borrower and Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any political subdivision thereof or any applicable foreign jurisdiction, and all liabilities with respect thereto, in each case arising from any payment made hereunder or under any of the other Financing Agreements or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any of the other Financing Agreements (including UCC financing statement filing taxes, documentary taxes, intangibles taxes and mortgage recording taxes) (collectively, “Other Taxes”), except for Other Taxes resulting from an assignment by any Lender pursuant to Section 15.7, other than an assignment prior to or in connection with the primary syndication as determined by the Administrative Agent, which assignment is not at the request of any Borrower or Guarantor pursuant to Section 3.9(b).

 

(d)                                 Subject to the last sentence of Section 6.8(g), each Borrower and Guarantor shall indemnify each Lender, Issuing Bank and Agent for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 6.8) paid by such Lender, Issuing Bank or Agent (as the case may be) and any liability (including for penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided that no Lender, Issuing Bank or Agent shall be entitled to receive any payment pursuant to this Section 6.8(d) unless such Lender, Issuing Bank or Agent provides notice of such payment of Taxes or Other Taxes to Borrower Agent within six (6) months after the payment of such Taxes or Other Taxes.  This indemnification shall be made within thirty (30) days from the date such Lender, Issuing Bank or Agent (as the case may be) makes written demand therefor.  A certificate as to the amount of such payment delivered to Borrower Agent by a Lender, an Issuing Bank or the Collateral Agent (with a copy to 

 

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Administrative Agent) or by Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.

 

(e)                                  As soon as practicable after any payment of Taxes or Other Taxes by any Borrower or Guarantor, such Borrower or Guarantor shall furnish to Administrative Agent, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof.

 

(f)                                    Without prejudice to the survival of any other agreements of any Borrower or Guarantor hereunder or under any of the other Financing Agreements, the agreements and obligations of such Borrower or Guarantor contained in this Section 6.8 shall survive the termination of this Agreement and the payment in full of the Obligations.

 

(g)                                 Each Foreign Lender shall, to the extent it is legally able to do so, deliver to Borrower Agent (with a copy to Administrative Agent) on or prior to the date hereof, or in the case of a Foreign Lender that is an assignee of an interest under this Agreement pursuant to Sections 15.7(b) or 15.7(f) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of the applicable Assignment and Acceptance, or upon any change in lending office of a Foreign Lender:  (i)two (2) duly completed original signed copies of Internal Revenue Service Form W-8BEN claiming exemption from, or a reduction to, withholding tax under an income tax treaty with respect to payments to be made under this Agreement and any of the other Financing Agreements, or any successor form, (ii) two (2) duly completed original signed copies of Internal Revenue Service Form W-8ECI claiming exemption from withholding tax with respect to payments to be made under this Agreement and any of the other Financing Agreements because the income is effectively connected with a U.S. trade or business or any successor form, or (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Sections 871(h) or 881(c) of the Code, (A) a certificate of the Lender or Issuing Bank, as applicable, to the effect that such Lender or Issuing Bank is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code or a “controlled foreign corporation” with respect to which any Borrower is a related person within the meaning of Section 864(d)(4) of the Code and (B) two (2) duly completed original signed copies of Internal Revenue Service Form W-8BEN certifying to such Lender’s or Issuing Bank’s entitlement to an exemption from withholding tax with respect to payments of interest to be made under this Agreement and any of the other Financing Agreements or any successor form.  Each Lender and Issuing Bank that is not a Foreign Lender and is not a person whose name indicates that it is an “exempt recipient” (as such term is defined in Section 1.6049-4(c)(1)(ii) of the United States Treasury Regulations) agrees to deliver to Borrower Agent (with a copy to Administrative Agent) on or prior to the date hereof, or in the case of a Lender or Issuing Bank that is an assignee of an interest under this Agreement pursuant to Sections 15.7(b) or 15.7(f) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment) on the date of the applicable Assignment and Acceptance two (2) duly completed original signed copies of Internal Revenue Service Form W-9 certifying to such Lender’s or Issuing Bank’s entitlement as of such date to a complete exemption from United States backup withholding tax with respect to payments to be made under this Agreement and any of the other Financing Agreements, or successor forms.  In addition, each Lender and Issuing Bank agrees that it will deliver updated versions of the foregoing, as applicable, whenever the previous certification has become obsolete or inaccurate in any material respect, together with such other forms as may be required in order to confirm or establish the entitlement of such Lender or Issuing Bank to a continued exemption from United States withholding tax with respect to payments under this Agreement and any of the other Financing Agreements.  Each Agent agrees to deliver to Borrower Agent an applicable Internal Revenue Service Form on or prior to the date hereof and from time to time thereafter, when a lapse in time or a change in circumstances renders the previous form obsolete or inaccurate in any material respect.  Unless Borrower Agent and Administrative Agent have received forms or other documents reasonably satisfactory to them indicating that payments hereunder or under any of the other Financing Agreements to or for a Lender, an Issuing Bank, or an Agent

 

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are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, Borrowers, Guarantors or Administrative Agent shall withhold amounts required to be withheld by applicable requirements of law from such payments at the applicable statutory rate.  Borrowers and Guarantors shall not be required to indemnify any Lender, Issuing Bank or Agent or to pay any additional amounts to any Lender, Issuing Bank or Agent in respect of U.S. withholding tax pursuant to Section 6.8(b) or 6.8(d) above to the extent that the obligation to pay such additional amounts would not have arisen but for a failure by such Lender, Issuing Bank or Agent to provide tax documentation referred to in this Section 6.8(g), except to the extent that such failure arose as a result of a change in law after the date such Lender, Issuing Bank and/or Agent became a party hereto.  Should a Lender, Issuing Bank or Agent become subject to Taxes because of its failure to deliver a form required hereunder, Borrowers and Guarantors shall, at such Lender’s, Issuing Bank’s or Agent’s (as the case may be) expense, take such steps as such Lender, Issuing Bank or Agent shall reasonably request to assist such Lender, Issuing Bank or Agent to recover such Taxes.

 

(h)                                 Any Lender claiming any additional amounts payable pursuant to this Section 6.8 shall use its reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its applicable lending office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that would be payable or may thereafter accrue and would not, in the sole determination of such Lender, be otherwise disadvantageous in any material respect to such Lender.

 

(i)                                     If the Borrowers or Guarantors pay any additional amount pursuant to this Section 6.8 with respect to any Lender, such Lender shall use reasonable efforts to obtain a refund of tax against its tax liabilities on account of such payment.  In the event that such Lender receives such a refund, such Lender shall pay to the Borrowers or Guarantors, an amount that such Lender reasonably determines is equal to the net tax benefit obtained by such Lender as a result of such payment by the Borrowers or Guarantors, as applicable, so as to leave such Lender in no worse position that in which it would have been in if payment of the relevant additional amount had not been made.  Nothing contained in this Section 6.8(j) shall require a Lender to disclose or detail the basis of its calculation of the amount of any tax benefit or any other amount or the basis of its determination referred to in the proviso to the first sentence of this Section 6.8(j) to the Borrowers, Guarantors or any other party.

 

(j)             Each Foreign Lender and Agent shall deliver to Administrative Agent and Borrower Agent such tax forms or other documents as shall be prescribed by applicable law or as reasonably requested by Borrower Agent or Administrative Agent to demonstrate, where applicable, that payments under this Agreement and any of the other Financing Agreements to such Lender and Agent are exempt from the application of United States withholdings taxes (or any interest, penalties or similar liabilities with respect thereto) pursuant to FATCA.

 

6.9                                 Use of Proceeds.  Borrowers shall use the initial proceeds of the Loans and Letters of Credit hereunder for: (a) payments to each of the persons listed in the disbursement direction letter furnished by Borrowers to Administrative Agent on or about the date hereof, (b) the repayment of the amounts outstanding under the Existing Credit Agreements, (c) costs, expenses and fees in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Financing Agreements, as well as for the consummation of the Refinancing Transactions and (d) working capital and other general corporate needs of the Parent and its Subsidiaries.  All other Loans made or Letters of Credit provided to or for the benefit of any Borrower pursuant to the provisions hereof shall be used by such Borrower to finance acquisitions by the Parent or any of its Subsidiaries to the extent permitted hereunder, or for general operating, working capital and other corporate purposes of such Borrower not otherwise prohibited by the terms of the organizational documents of such Borrower, provided, that, in no event shall any of the proceeds be used, directly or indirectly, for the purpose of purchasing or carrying any margin security or for the 

 

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purposes of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended.

 

6.10                           Appointment of Borrower Agent as Agent for Requesting Loans and Receipts of Loans and Statements.

 

(a)                                  Each Borrower hereby irrevocably appoints and constitutes Borrower Agent as its agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this Agreement and the other Financing Agreements from either Agent or any Lender in the name or on behalf of such Borrower.  Administrative Agent, Issuing Bank and Lenders may disburse the Loans to such bank account of Borrower Agent or a Borrower or otherwise make such Loans to a Borrower and provide such Letters of Credit to a Borrower as Borrower Agent may designate or direct, without notice to any other Borrower or Guarantor.  Notwithstanding anything to the contrary contained herein, Administrative Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.

 

(b)                                 Borrower Agent hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 6.10.  Borrower Agent shall ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the account of Parent, or the issuance of any Letter of Credit for the account of a Borrower or a Guarantor hereunder, shall be paid to or for the account of such Borrower or such Guarantor, as applicable.

 

(c)                                  Each Borrower and other Guarantor hereby irrevocably appoints and constitutes Borrower Agent as its agent to receive statements on account and all other notices from Agents and Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Agreements.

 

(d)                                 Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any other Borrower or any Guarantor by Borrower Agent shall be deemed for all purposes to have been made by such Borrower or Guarantor, as the case may be, and shall be binding upon and enforceable against such Borrower or Guarantor to the same extent as if made directly by such Borrower or Guarantor.

 

(e)                                  No termination of the appointment of Borrower Agent as agent as aforesaid shall be effective, except after ten (10) Business Days’ prior written notice to Agents.

 

6.11                           Pro Rata Treatment.  Except to the extent otherwise provided in this Agreement or as otherwise agreed by all of the Lenders:  (a) the making and conversion of Loans shall be made among the Lenders based on their respective Pro Rata Shares as to the Loans and (b) each payment on account of any Obligations to or for the account of one or more of Lenders in respect of any Obligations due on a particular day shall be allocated among the Lenders entitled to such payments based on their respective Pro Rata Shares and shall be distributed accordingly.

 

6.12                           Sharing of Payments, Etc.

 

(a)                                  Each Borrower and Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker’s lien or counterclaim an Agent or any Lender may otherwise have, each Lender shall be entitled, at its option (but subject, as among Agents and Lenders, to the provisions of Section 12.3(b) hereof), to offset balances held by it for the account of such Borrower or Guarantor at any of its offices, in dollars or in any other currency, against any principal of or interest on any Loans owed to such 

 

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Lender or any other amount payable to such Lender hereunder, that is not paid when due (regardless of whether such balances are then due to such Borrower or Guarantor), in which case it shall promptly notify Borrower Agent and Administrative Agent thereof; provided, that, such Lender’s failure to give such notice shall not affect the validity thereof.  In the event that any Defaulting Lender shall exercise any such right of setoff, (i) all amounts so set off shall be paid over promptly to the Administrative Agent for further application in accordance with the provisions of Section 6.16 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 Bank and the Lenders, and (ii) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

 

(b)                                 If any Lender (including an Agent) shall obtain from any Borrower or Guarantor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any of the other Financing Agreements through the exercise of any right of setoff, banker’s lien or counterclaim or similar right or otherwise (other than from Administrative Agent as provided herein), and, as a result of such payment, such Lender shall have received more than its Pro Rata Share of the principal of the Loans or more than its share of such other amounts then due hereunder or thereunder by any Borrower or Guarantor to such Lender than the percentage thereof received by any other Lender, it shall promptly pay to Administrative Agent, for the benefit of Lenders, the amount of such excess and simultaneously purchase from such other Lenders a participation in the Loans or such other amounts, respectively, owing to such other Lenders (or such interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) in accordance with their respective Pro Rata Shares or as otherwise agreed by Lenders.  To such end all Lenders shall make appropriate adjustments among themselves (by the resale of participation sold or otherwise) if such payment is rescinded or must otherwise be restored.

 

(c)                                  Each Borrower and Guarantor agrees that any Lender purchasing a participation (or direct interest) as provided in this Section may exercise, in a manner consistent with this Section, all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation.

 

(d)                                 Nothing contained herein shall require any Lender to exercise any right of setoff, banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Borrower or Guarantor.  If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, assign such rights to Administrative Agent for the benefit of Lenders and, in any event, exercise its rights in respect of such secured claim in a manner consistent with the rights of Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

 

6.13                           Settlement Procedures.

 

(a)                                  Except with respect to Loans made pursuant to Section 2.3(f), each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 2:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account designated by the applicable Borrower (or Borrower Agent on behalf of such Borrower) in the 

 

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applicable request for a Loan or, if a Loan shall not be made on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.

 

(b)                                 Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Loan that such Lender will not make available to the Administrative Agent such Lender’s Pro Rata Share of such Loan, the Administrative Agent may assume that such Lender has made such Pro Rata Share available to the Administrative Agent on the date of such Loan in accordance with paragraph (a) above and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount.  If the Administrative Agent shall have so made funds available then, to the extent that such Lender shall not have made such Pro Rata Share available to the Administrative Agent, such Lender and the Borrowers jointly and severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the applicable Borrower to but excluding the date such amount is repaid to the Administrative Agent at (i) in the case of the applicable Borrower, a rate per annum equal to the interest rate applicable at the time to such Loans and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error).  If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Pro Rata Share of such  Loan for purposes of this Agreement

 

(c)                                  Nothing in this Section or elsewhere in this Agreement or the other Financing Agreements shall be deemed to require Administrative Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitment hereunder or tot prejudice any rights that any Borrower may have against any Lender as a result of any default by any Lender hereunder in fulfilling its Commitment.

 

6.14                           Obligations Several; Independent Nature of Lenders’ Rights.  The obligation of each Lender hereunder is several, and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder.  Nothing contained in this Agreement or any of the other Financing Agreements and no action taken by the Lenders pursuant hereto or thereto shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture or any other kind of entity.  The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and subject to Section 14.3 hereof, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

 

6.15                           Bank Products.  Borrowers and Guarantors, or any of their Subsidiaries, may (but no such Person is required to) request that the Bank Product Providers provide or arrange for such Person to obtain Bank Products from Bank Product Providers, and each Bank Product Provider may, in its sole discretion, provide or arrange for such Person to obtain the requested Bank Products.  Borrowers and Guarantors or any of their respective Subsidiaries that obtains Bank Products shall indemnify and hold each Agent, each Lender and their respective Affiliates harmless from any and all obligations now or hereafter owing to any other Person by any Bank Product Provider in connection with any Bank Products other than for gross negligence or willful misconduct on the part of any such indemnified Person.  This Section 6.15 shall survive the payment of the Obligations and the termination of this Agreement.  Borrowers, Guarantors and their respective Subsidiaries acknowledge and agree that the obtaining of Bank Products from Bank Product Providers (a) is in the sole discretion of such Bank Product Provider, and (b) is subject to all rules and regulations of such Bank Product Provider.  Each Bank Product Provider shall be deemed a party hereto for purposes of any reference in a Financing Agreement to the parties for whom Agents are acting, provided, that, the rights of such Bank Product Provider hereunder and under any of the other Financing Agreements shall consist exclusively of such Bank Product Provider’s right to share in payments and collections out of the Collateral as set forth herein.  In connection with any such distribution of payments and collections to a 

 

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Bank Product Provider (other than a Bank Product Provider party to a Secured Hedge Agreement), Agents shall be entitled to assume that no amounts are due to any Bank Product Provider unless such Bank Product Provider has notified Agents in writing of any such liability owed to it as of the date of any such distribution.

 

6.16                           Defaulting Lenders.

 

(a)                                  Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver, consent or other modification with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and the definition of Supermajority Lenders.

 

(ii)                                  Defaulting Lender Waterfall.  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 12 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 6.12(a) 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 hereunder; third, to Cash Collateralize the Letter of Credit Obligations with respect to such Defaulting Lender in accordance with Section 6.17; fourth, as the Borrower Agent 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 Agent, 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 Letter of Credit Obligations with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 6.17; sixth, to the payment of any amounts owing to the Lenders or the Issuing Bank as a result of any judgment of a court of competent jurisdiction obtained by any Lender or Issuing Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to a Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; 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 Letter of Credit Obligations 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 4.2 were satisfied and waived, such payment shall be applied solely to pay the Loans of, and Letter of Credit Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Letter of Credit Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letter of Credit Obligations are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 6.17(a)(iv).  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 6.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Certain Fees.  No Defaulting Lender shall be entitled to receive any fee pursuant to Section 3.2(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).  Each Defaulting Lender shall be entitled to receive fees pursuant to Section 3.2(b) for 

 

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any period during which that Lender is a Defaulting Lender only to the extent allocable to its Pro Rata Share of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 6.17.  With respect to any fee pursuant to Section 3.2(b) not required to be paid to any Defaulting Lender pursuant to the preceding sentence, the Borrowers shall (x) pay to each non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letter of Credit Obligations that has been reallocated to such non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Issuing Bank the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Issuing Bank’s fronting exposure to such Defaulting Lender and (z) not be required to pay the remaining amount of any such fee.

 

(iv)                              Reallocation of Participations to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in Letter of Credit Obligations shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.2 are satisfied at the time of such reallocation (and, unless the Borrowers shall have otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate outstanding principal amount of all Revolving Loans of any non-Defaulting Lender, together with such non-Defaulting Lender’s Pro Rata Share of the aggregate amount of all Letter of Credit Obligations, to exceed such non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)                                 Cash Collateral.  If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Banks’ fronting exposure with respect to Letter of Credit Obligations in accordance with the procedures set forth in Section 6.17.

 

(b)                                 Defaulting Lender Cure.  If the Borrower Agent, the Administrative Agent and each Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letter of Credit Obligations to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 6.16(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(c)                                  New Letters of Credit.  So long as any Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that the participations in the Letter of Credit Obligations related to any existing Letters of Credit as well as the new, extended, renewed or increased Letter of Credit has been or will be fully allocated among the non-Defaulting Lenders in a manner consistent with clause (a)(iv) above and/or Cash Collateralized in accordance with Section 6.17 and such Defaulting Lender shall not participate therein except to the extent such Defaulting Lender’s participation has been or will be fully Cash Collateralized in accordance with Section 6.17.

 

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(d)                                 Bank Products.  So long as any Lender is a Defaulting Lender, such Lender shall not be deemed a “Bank Product Provider” with respect to any Bank Product entered into while such Lender was a Defaulting Lender.

 

6.17                           Cash Collateral.

 

At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent or the Issuing Bank (with a copy to the Administrative Agent) the Borrowers shall Cash Collateralize the Issuing Bank’s fronting exposure with respect to Letter of Credit Obligations in respect of such Defaulting Lender (determined after giving effect to Section 6.16(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

(a)                                  Grant of Security Interest.  The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Collateral Agent, for the benefit of the Issuing Bank, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of Letter of Credit Obligations, to be applied pursuant to clause (b) below.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Collateral Agent and the Issuing Bank as herein provided (other than the Permitted Liens), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Collateral Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 6.17 or Section 6.16 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letter of Credit Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(c)                                  Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the Issuing Bank’s fronting exposure with respect to Letter of Obligations in respect of such Defaulting Lender shall no longer be required to be held as Cash Collateral pursuant to this Section 6.17 following (i) the elimination of the such fronting exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided that, subject to Section 6.16 the Person providing Cash Collateral and the Issuing Bank may agree that Cash Collateral shall be held to support future anticipated fronting exposure or other obligations and provided  further that to the extent that such Cash Collateral was provided by the Borrowers, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

 

SECTION 7.                                                    COLLATERAL REPORTING AND COVENANTS

 

7.1                                 Collateral Reporting.

 

(a)                                  Borrowers shall provide Collateral Agent with the following documents in a form reasonably satisfactory to Collateral Agent:

 

(i)                                     as soon as possible after the end of each calendar month (but in any event within fifteen (15) Business Days after the end thereof), or more frequently as Collateral Agent may require 

 

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at any time a Default or Event of Default exists or has occurred and is continuing or the aggregate amount of the Excess Availability shall be less than $7,500,000 and thereafter, (A) a Borrowing Base Certificate setting forth the calculation of the Borrowing Base as of the last Business Day of the immediately preceding period, duly completed and executed by the chief financial officer, vice president of finance, treasurer or controller of Parent, together with all schedules required pursuant to the terms of the Borrowing Base Certificate duly completed, (B) inventory reports by division (and including the amounts of Inventory and the value thereof at any leased locations and at premises of  warehouses, processors or other third parties or consignees), (C) agings of accounts receivable (together with a reconciliation to the previous period’s aging and the general ledger), (D) agings of outstanding accounts payable (and including information indicating the amounts owing to owners and lessors of leased premises, warehouses, processors, and other third parties from time to time in possession of any Collateral);

 

(ii)                                  as soon as possible after the end of each calendar month (but in any event within fifteen (15) Business Days after the end thereof), on a monthly basis or more frequently as Collateral Agent may request, a certificate by the chief financial officer, vice president of finance, treasurer or controller of Parent consisting of: (A) a statement confirming the payment of rent and other amounts due to owners and lessors of real property used by Borrowers and Guarantors in the immediately preceding month, subject to year-end or monthly percentage rent payment adjustments, (B) the addresses of all distribution center locations of Borrowers and Guarantors acquired or opened since the date of the most recent certificate delivered to Collateral Agent containing the information required under this clause, (C) a report of any new deposit account established or used by any Borrower or Guarantor with any bank or other financial institution and any existing deposit account currently established or used by any Borrower or Guarantor with any bank or other financial institution that is at any time identified after the date hereof and was not set forth in the Information Certificate, including in each case, the Borrower or Guarantor in whose name the account is maintained, the account number, the name and address of the financial institution at which such account is maintained, the purpose of such account and, if any, the amount held in such account on or about the date of such report, and (D) a statement that all sales and use taxes have been paid when due as of the date of the certificate, except as specifically described in such certificate,

 

(iii)                               upon Collateral Agent’s request, (A) reports of sales for each category of Inventory,  (B) summary reports on sales and use tax collections, deposits and payments, including monthly sales and use tax accruals, (C) true, correct and complete copies of all agreements, documents and instruments relating to any Permitted Acquisition which Collateral Agent has not otherwise received, (E) true, correct and complete copies of all agreements, documents or instruments evidencing or otherwise related to Indebtedness that Collateral Agent has not otherwise received and (F) a certificate of the chief financial officer, vice president of finance, treasurer or controller of Parent listing (1) all applications, if any, for Intellectual Property made since the date of the prior certificate (or, in the case of the first such certificate, the date hereof), (2) all issuances of registrations or letters on existing applications for Intellectual Property received since the date of the prior certificate (or, in the case of the first such certificate, the date hereof), and (3) all material License Agreements entered into since the date of the prior certificate (or, in the case of the first such certificate, the date hereof); and

 

(iv)                              such other reports as to the Collateral as Collateral Agent shall reasonably request from time to time.

 

(b)                                 Nothing contained in any Borrowing Base Certificate shall be deemed to limit, impair or otherwise affect the rights of Collateral Agent contained herein and in the event of any conflict or inconsistency between the calculation of the Borrowing Base as set forth in any Borrowing Base Certificate and as determined by Collateral Agent in good faith, the determination of Collateral Agent shall govern and, absent manifest error, be conclusive and binding upon Borrowers and Guarantors. Without limiting the foregoing, Borrowers shall furnish to Agents any information which Agents may reasonably request regarding the determination and calculation of any of the amounts set forth in any Borrowing Base 

 

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Certificate. Subject to the limitations set forth herein, the Borrowing Base may be adjusted based on the information received by Agents pursuant to this Agreement.  If any Borrower’s or Guarantor’s records or reports of the Collateral are prepared or maintained by an accounting service, contractor, shipper or other agent, such Borrower and Guarantor hereby irrevocably authorizes such service, contractor, shipper or agent to deliver such records, reports, and related documents to Agents and to follow Agents’ reasonable instructions with respect to further services.

 

(c)                                  Without limiting the obligations of the Borrowers and the Guarantors hereunder, at the request of the Administrative Agent, the Collateral Agent shall deliver copies of written notices, agreements, documents and instruments which have been delivered to the Collateral Agent but not to the Administrative Agent.

 

7.2                                 Accounts Covenants.

 

(a)                                  Borrowers shall notify Agents promptly of (i) the assertion of any claims, offsets, defenses or counterclaims by any account debtor, or any disputes with any account debtor or any settlement, adjustment or compromise thereof, to the extent any of the foregoing exceeds $250,000 in any one case or $500,000 in the aggregate and (ii) all material adverse information of which it has notice relating to the financial condition of any account debtor.  No credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor except in the ordinary course of a Borrower’s or Guarantor’s business in accordance with the current practices of such Borrower or Guarantor, as applicable, as in effect on the date hereof.  At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with account debtors or grant any credits, discounts or allowances.

 

(b)                                 With respect to each Eligible Account: (i) the amounts shown on any invoice delivered to Agents or schedule thereof delivered to Agents shall be true and complete in all material respects, (ii) no payments shall be made thereon except those sent to the Concentration Accounts, (iii) no credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor except as reported to Agents in accordance with this Agreement and except for credits, discounts, allowances or extensions made or given in the ordinary course of each Borrower’s and Guarantor’s business, (iv) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto other than as reported to Agents in accordance with the terms of this Agreement, and (v) none of the transactions giving rise thereto will violate any applicable foreign, Federal, State or local laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.

 

(c)                                  Each Agent shall have the right at any time or times, in their respective names or in the name of a nominee of such Agent, to verify the validity, amount or any other matter relating to any Receivables or other Collateral, by mail, telephone, facsimile transmission or otherwise.

 

7.3                                 Inventory Covenants.  With respect to the Inventory: (a) each Borrower and Guarantor shall at all times maintain inventory records reasonably satisfactory to Agents, keeping correct and accurate records in all material respects itemizing and describing the kind, type, quality and quantity of Inventory, such Borrower’s or Guarantor’s cost therefor and daily withdrawals therefrom and additions thereto; (b) Borrowers and Guarantors shall conduct a physical count of the Inventory either through periodic cycle counts or wall to wall counts, so that all Inventory is subject to such counts at least once each year, but at any time or times as Agents may request at any time a Default or an Event of Default exists or has occurred and is continuing, and promptly following such physical inventory (whether through periodic cycle counts or wall to wall counts) shall supply Agents at least once each calendar quarter if any such counts are performed within such quarter, or otherwise once each calendar year, with a report in the form and with such specificity 

 

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as may be reasonably satisfactory to Agents concerning such physical count; (c) Borrowers and Guarantors shall not remove any Inventory from the locations set forth or permitted herein, without the prior written consent of Agents, except for sales of Inventory in the ordinary course of its business and except to move Inventory directly from one location set forth or permitted herein to another such location and except for Inventory shipped from the manufacturer thereof to such Borrower or Guarantor which is in transit to the locations set forth or permitted herein; (d) Borrowers shall, at their expense, one (1) time in any twelve (12) month period, or up to one (1) additional time in such twelve (12) month period upon Agents’ request that could be delivered only when the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding with respect to all Borrowers exceeds $5,000,000, but at any time at their expense as Agents may request if a Default or Event of Default shall exist or have occurred and be continuing, or the aggregate amount of the Excess Availability shall be less than $7,500,000, deliver or cause to be delivered to Agents written appraisals as to the Inventory in form, scope and methodology reasonably acceptable to Agents and by an appraiser reasonably acceptable to Agents, addressed to Agents and Lenders and upon which Agents and Lenders are expressly permitted to rely; (e) Borrowers and Guarantors shall produce, use, store and maintain the Inventory with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938, as amended and all rules, regulations and orders related thereto); (f) as between Agents and Lenders, on the one hand, and Borrowers and Guarantors, on the other hand, each Borrower and Guarantor assumes all responsibility and liability arising from or relating to the use, sale or other disposition of the Inventory (but nothing contained herein shall be construed as the basis for any liability of any Borrower or Guarantor as to any third party); (g) as of the date hereof, Borrowers and Guarantors do not sell Inventory to any customer on approval, or any other basis which entitles the customer to return or may obligate any Borrower or Guarantor to repurchase such Inventory but shall give Agents prior written notice if such practice changes together with such information with respect to the new policy as may reasonably be requested by Agents; (h) Borrowers and Guarantors shall keep the Inventory in good and marketable condition; and (i) Borrowers and Guarantors shall not acquire or accept any Inventory on consignment or approval unless such Inventory has been specifically identified in a report with respect thereto provided by Borrower Agent to Agents pursuant to Section 7.1(a) hereof when required to be included in such report or Agents has otherwise received prior written notice thereof in form and substance reasonably satisfactory to Agents.

 

7.4                                 Equipment and Real Property Covenants.  (a) At any time as Agents may request if a Default or an Event of Default shall exist or have occurred and be continuing, deliver or cause to be delivered to Agents written appraisals as to the Equipment in form, scope and methodology reasonably acceptable to Agents and by an appraiser reasonably acceptable to Agents, addressed to Agents and Lenders and upon which Agents and Lenders are expressly permitted to rely; (b) Borrowers and Guarantors shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and tear excepted); (c) Borrowers and Guarantors shall use the Equipment and Real Property with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws in all material respects; (d) the Equipment is and shall be used in the business of Borrowers and Guarantors and not for personal, family, household or farming use; provided, that, certain motor vehicles used primarily by employees for business purposes may from time to time be incidentally used for personal, family or household use, as permitted by the internal policies of the applicable Borrower or Guarantor if any; (e) Borrowers and Guarantors shall not remove any Equipment from the locations set forth or permitted herein, except to the extent necessary to have any Equipment repaired, replaced or maintained in the ordinary course of its business or to move Equipment directly from one location set forth or permitted herein to another such location and except for the movement of motor vehicles used by or for the benefit of such Borrower or Guarantor in the ordinary course of business; (f) the Equipment is now and shall remain personal property and Borrowers and Guarantors shall not permit any of the Equipment to be or become a part of or affixed to real property, other than any Mortgaged Property (but not including for this purpose any plumbing and electrical fixtures, heating, ventilation and air conditioning, wall and floor coverings, walls or

 

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ceilings and other fixtures not constituting trade fixtures); and (g) as between Agents and Lenders, on the one hand, and Borrowers and Guarantors, on the other hand, each Borrower and Guarantor assumes all responsibility and liability arising from or relating to the use, sale or other disposition of the Equipment and Real Property (but nothing contained herein shall be construed as the basis for any liability of any Borrower or Guarantor as to any third party).

 

7.5           Power of Attorney.  Each Borrower and Guarantor hereby irrevocably designates and appoints Collateral Agent (and all persons designated by Collateral Agent) as such Borrower’s and Guarantor’s true and lawful attorney-in-fact, and authorizes Collateral Agent, in such Borrower’s, Guarantor’s or Collateral Agent’s name, to: (a) at any time an Event of Default exists or has occurred and is continuing and subject to the terms of the Intercreditor Agreement, (i) demand payment on any Collateral, (ii) enforce payment of any of the Collateral by legal proceedings or otherwise, (iii) exercise all of such Borrower’s or Guarantor’s rights and remedies to collect any Collateral, (iv) sell or assign any Collateral upon such terms, for such amount and at such time or times as the Collateral Agent deems advisable, (v) settle, adjust, compromise, extend or renew any of the Collateral, (vi) discharge and release any Collateral, (vii) prepare, file and sign such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any Collateral, (viii) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of Collateral to an address designated by Collateral Agent, and open and dispose of all mail addressed to such Borrower or Guarantor and handle and store all mail relating to the Collateral, (ix) clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Bureau of Customs and Border Protection or foreign export control authorities in such Borrower’s or Guarantor’s name, Collateral Agent’s name or the name of Collateral Agent’s designee, and to sign and deliver to customs officials powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and to complete in such Borrower’s or Guarantor’s or Collateral Agent’s name, any order, sale or transaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, and (x) do all acts and things which are necessary, in Collateral Agent’s reasonable determination, to fulfill such Borrower’s or Guarantor’s obligations under this Agreement and the other Financing Agreements and (b) at any time a Cash Dominion Event exists to (i) take control in any manner of any item of payment constituting Collateral or otherwise received in or for deposit in the Concentration Accounts and (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of Collateral are sent or received if a Cash Dominion Event exists, and (c) at any time to (i) take control of any item of payment constituting Collateral that is received by an Agent or any Lender, (ii) endorse such Borrower’s or Guarantor’s name upon any items of payment in respect of Collateral received by an Agent and any Lender and deposit the same in Collateral Agent’s account for application to the Obligations, (iii) endorse such Borrower’s or Guarantor’s name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (iv) sign such Borrower’s or Guarantor’s name on any verification of amounts owing constituting Collateral and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof.  Each Borrower and Guarantor hereby releases Agents and Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of an Agent’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

 

7.6           Right to Cure.  Agents may, at their option, upon prior notice to Borrower Agent, (a) cure any default by any Borrower or Guarantor under any material agreement with a third party that affects the Collateral, its value or the ability of Collateral Agent to collect, sell or otherwise dispose of the Collateral or the rights and remedies of an Agent or any Lender therein or the ability of any Borrower or Guarantor to perform its obligations hereunder or under any of the other Financing Agreements, (b) pay or bond on appeal

 

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any judgment entered against any Borrower or Guarantor, (c) discharge taxes, liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which, in Agents’ reasonable judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of Agents and Lenders with respect thereto.  Administrative Agent may add any amounts so expended to the Obligations and charge any Borrower’s account therefor or may demand immediate payment thereof.  Agents and Lenders shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of any Borrower or Guarantor.

 

7.7           Access to Premises.  From time to time as requested by Agents, at the cost and expense of Borrowers, (a) Agents or their respective designees shall have complete access to all of each Borrower’s and Guarantor’s premises during normal business hours and after notice to Parent, or at any time and without notice to Borrower Agent if an Event of Default exists or has occurred and is continuing, for the purposes of inspecting, verifying and auditing the Collateral and all of each Borrower’s and Guarantor’s books and records, including the Records, and in addition, if an Event of Default exists or has occurred and is continuing, an Arranger, a Syndication Agent or a Documentation Agent hereunder may, at its option, have a representative accompany the applicable Agent in connection with a field examination conducted by such Agent (provided that such representative shall be subject to the direction of such Agent) and (b) each Borrower and Guarantor shall promptly furnish to Agents such copies of such books and records or extracts therefrom as Agents may reasonably request, and an Agent or any Lender or an Agent’s designee may use during normal business hours such of any Borrower’s and Guarantor’s personnel, equipment, supplies and premises as may be reasonably necessary for the foregoing and if an Event of Default exists or has occurred and is continuing for the collection of Receivables and realization of other Collateral.  Agents shall not conduct more than three (3) field examinations with respect to the Collateral in any twelve (12) month period at the expense of Borrowers, except that at any time after the aggregate amount of the Excess Availability shall be less than $7,500,000, or a Default or Event of Default shall exist or have occurred and be continuing, Agents may conduct such other field examinations at the expense of Borrowers as Agents may require.

 

SECTION 8.                                                    REPRESENTATIONS AND WARRANTIES

 

Each Borrower and Guarantor hereby represents and warrants to Agents, Lenders and Issuing Bank the following:

 

8.1           Existence, Power and Authority.  Each Borrower and Guarantor is a corporation, limited liability company or limited partnership duly organized and in good standing under the laws of its jurisdiction of organization and is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and in good standing in all states or other jurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such qualification necessary, where the failure to so qualify has or would reasonably be expected to have a Material Adverse Effect.  The execution, delivery and performance of this Agreement, the other Financing Agreements and the transactions contemplated hereunder and thereunder (a) are all within each Borrower’s and Guarantor’s corporate or limited liability company or limited partnership powers, (b) have been duly authorized, (c) are not in contravention of any material law or the terms of any Borrower’s or Guarantor’s certificate of incorporation, certificate of formation, bylaws, operating agreement, limited partnership agreement or other organizational documentation, or any indenture, material agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property are bound and (d) will not result in the creation or imposition of, or require or give rise to any obligation to grant, any lien, security interest, charge or other encumbrance upon any property of any Borrower or Guarantor except as permitted hereunder.  This Agreement and the other Financing Agreements to which any Borrower or Guarantor is a party constitute legal, valid and binding obligations of such Borrower and Guarantor, enforceable in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency,

 

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reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or law).

 

8.2           Name; State of Organization; Chief Executive Office; Collateral Locations.

 

(a)           The exact legal name of each Borrower and Guarantor is as set forth on the signature page of this Agreement and in the Information Certificate.  No Borrower or Guarantor has, during the five (5) years prior to the date of this Agreement, been known by or used any other corporate or fictitious name or been a party to any merger or consolidation, or acquired all or substantially all of the assets of any Person, or acquired any of its property or assets out of the ordinary course of business, except as set forth in the Information Certificate.

 

(b)           Each Borrower and Guarantor is an organization of the type and organized in the jurisdiction set forth in the Information Certificate.  The Information Certificate accurately sets forth the organizational identification number of each Borrower and Guarantor or accurately states that such Borrower or Guarantor has none and accurately sets forth the federal employer identification number of each Borrower and Guarantor.

 

(c)           The chief executive office and mailing address of each Borrower and Guarantor and each Borrower’s and Guarantor’s Records concerning Accounts are located only at the address identified as such in Schedule 8.2 to the Information Certificate and its only other places of business and the only other locations of Collateral, if any, are the addresses set forth in Schedule 8.2 to the Information Certificate, subject to the rights of any Borrower or Guarantor to establish new locations in accordance with Section 9.2 below and other than Collateral in transit to any such locations.

 

8.3           Financial Statements; No Material Adverse Effect.  All financial statements relating to any Borrower or Guarantor which have been or may hereafter be delivered by any Borrower or Guarantor to Agents and Lenders have been prepared in accordance with GAAP (except as to any interim financial statements, to the extent such statements are subject to normal year-end adjustments and do not include any notes) and fairly present in all material respects the financial condition and the results of operation of such Borrower and Guarantor as at the dates and for the periods set forth therein.  Except as disclosed in any interim financial statements furnished by Borrowers and Guarantors to Administrative Agent prior to the date of this Agreement, there has been no act, condition or event which has had or is reasonably likely to have a Material Adverse Effect since the date of the most recent audited financial statements of any Borrower or Guarantor furnished by any Borrower or Guarantor to Administrative Agent prior to the date of this Agreement.  The projections dated February 1, 2011 for the fiscal years 2011 through 2017 that have been delivered to Administrative Agent or any projections hereafter delivered to Administrative Agent have been prepared in light of the past operations of the businesses of Borrowers and Guarantors and are based upon estimates and assumptions stated therein, all of which Borrowers and Guarantors believe to be reasonable and fair in light of the then current conditions and current facts and reflect the good faith and reasonable estimates of Borrowers and Guarantors of the future financial performance of Parent and its Subsidiaries and of the other information projected therein for the periods set forth therein.

 

8.4           Priority of Liens; Title to Properties.  The security interests and liens granted to Collateral Agent under this Agreement and the other Financing Agreements constitute (x) valid and perfected first priority liens in the case of ABL Priority Collateral and (y) valid and perfected second priority liens in the case of Term Loan Priority Collateral and security interests in and upon the Collateral subject only to the liens permitted under Section 10.2 hereof.  Each Borrower and Guarantor has good and insureable fee simple title to or valid leasehold interests in all of its Real Property and good title to all of its other properties and assets subject to no liens, mortgages, pledges, security interests, encumbrances or charges of any kind, except those granted to Collateral Agent and such others as are specifically permitted under Section 10.2 hereof.

 

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Schedule 8.4 to the Information Certificate lists completely and correctly as of the Closing Date all Real Property owned by the Borrowers and the Guarantors and the addresses thereof.  The Borrowers and the Guarantors own in fee all such Real Property set forth on Schedule 8.4 to the Information Certificate.  Schedule 8.4 to the Information Certificates lists completely and correctly as of the Closing Date all Real Property leased by the Borrowers and the Guarantors and the addresses thereof.  The Borrowers and the Guarantors have valid leases in such Real Property set forth on Schedule 8.4 to the Information Certificate.

 

8.5           Tax Returns.  Each Borrower and Guarantor has filed, or caused to be filed, in a timely manner all material tax returns, reports and declarations which are required to be filed by it.  All information in such tax returns, reports and declarations is complete and accurate in all material respects.  Each Borrower and Guarantor has paid or caused to be paid all taxes due and payable by it, except taxes (a) the validity of which is being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or Guarantor and with respect to which adequate reserves have been set aside on its books and (b) which could not, individually or in the aggregate, have a Material Adverse Effect.  Adequate provision has been made for the payment of all accrued and unpaid Federal, State, county, local, foreign and other taxes whether or not yet due and payable and whether or not disputed.

 

8.6           Litigation.  Except as set forth on Schedule 8.6 to the Information Certificate, (a) there is no investigation by any Governmental Authority pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened in writing, against or affecting any Borrower or Guarantor, its or their assets or business and (b) there is no action, suit, proceeding or claim by any Person pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened in writing, against any Borrower or Guarantor or its or their assets or goodwill, or against or affecting any transactions contemplated by this Agreement, in each case, which if adversely determined against such Borrower or Guarantor has or could reasonably be expected to have a Material Adverse Effect.

 

8.7           Compliance with Other Agreements and Applicable Laws.

 

(a)           Borrowers and Guarantors are not in default in any respect under, or in violation in any respect of the terms of, any agreement, contract, instrument, lease or other commitment to which they are a party or by which they or any of their respective assets are bound.  Borrowers and Guarantors are in material compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority relating to their respective businesses, including, without limitation, those set forth in or promulgated pursuant to the Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended, ERISA, the Code, as amended, and the rules and regulations thereunder, and all Environmental Laws, in each case where the failure to comply has or could reasonably be expected to have a Material Adverse Effect.

 

(b)           Borrowers and Guarantors have obtained all material permits, licenses, approvals, consents, certificates, orders or authorizations of any Governmental Authority required for the lawful conduct of its business (the “Permits”).  All of the Permits are valid and subsisting and in full force and effect.  There are no actions, claims or proceedings pending or to the best of any Borrower’s or Guarantor’s knowledge, threatened in writing that seek the revocation, cancellation, suspension or modification of any of the Permits where any of the same would have a Material Adverse Effect.

 

8.8           Environmental Compliance.  Except as set forth in Schedule 8.8 to the Information Certificate, which matters, when considered either individually or in the aggregate, could not be reasonably expected to have a Material Adverse Effect and except as otherwise could not reasonably be expected to have a Material Adverse Effect:

 

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(a)           Borrowers, Guarantors and their Subsidiaries have not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on any property owned, leased or operated by it or used by it in any manner which at any time violates any applicable Environmental Law or Permit, and the operations of Borrowers, Guarantors and their Subsidiaries at such properties complies with all Environmental Laws and all Permits.

 

(b)           No Borrower or Guarantor has received any notice of or otherwise has any information that there has been any investigation by any Governmental Authority or any proceeding, complaint, order, directive, claim, citation or notice by any Governmental Authority or any other person nor is any investigation pending or to the best of the any Borrower’s or Guarantor’s knowledge threatened in writing, with respect to any non compliance with or violation of the requirements of any Environmental Law by any Borrower or Guarantor and any of its Subsidiaries or the release, spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials or any other environmental, health or safety matter with regard to any properties or assets owned, leased or operated by it or used by Borrowers, Guarantors or their Subsidiaries or their businesses.

 

(c)           Borrowers, Guarantors and their Subsidiaries have no liability (contingent or otherwise) in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials under or from any property owned, leased or operated by it or used by it or otherwise in connection with their businesses.

 

8.9           Employee Benefits.

 

(a)           Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or State law.  Each Plan which is intended to qualify under Section 401(a) of the Code is the subject of a favorable determination letter from the Internal Revenue Service and to the best of any Borrower’s or Guarantor’s knowledge, nothing has occurred which would cause the loss of such qualification where such loss, when combined with other such occurrences or failures to comply, would not reasonably be expected to have a Material Adverse Effect.  Each Borrower and Guarantor, and their respective ERISA Affiliates, have made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(b)           Except as set forth in the Information Certificate, there are no pending, or to the best of any Borrower’s or Guarantor’s knowledge, threatened material claims, actions (other than routine claims for benefits) or lawsuits, or action by any Governmental Authority, with respect to any Plan.  Except as set forth in the Information Certificate, there has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that would reasonably be expected to have a Material Adverse Effect.

 

(c)           (i) Except as set forth in the Information Certificate, no ERISA Event that is reasonably likely to have a Material Adverse Effect has occurred or is reasonably expected to occur; (ii) based on the latest valuation of each Pension Plan and on the actuarial methods and assumptions employed for such valuation (determined in accordance with the assumptions used for funding such Pension Plan pursuant to Section 412 of the Code), the aggregate current value of accumulated benefit liabilities of such Pension Plan under Section 4001(a)(16) of ERISA does not exceed the aggregate current value of the assets of such Pension Plan by more than $7,000,000; (iii) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any material liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA);

 

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(iv) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) each Borrower and Guarantor, and their ERISA Affiliates, have not engaged in a transaction that would be subject to Section 4069 or 4212(c) of ERISA.

 

8.10         Bank Accounts.  All of the deposit accounts, investment accounts or other accounts in the name of or used by any Borrower or Guarantor maintained at any bank or other financial institution are set forth on Schedule 8.10 to the Information Certificate, subject to the right of each Borrower and Guarantor to establish new accounts in accordance with Section 5.3 hereof.

 

8.11         Intellectual Property.  Except as would not reasonably be expected to have a Material Adverse Effect, each Borrower and Guarantor owns or licenses or otherwise has the right to use all Intellectual Property necessary for the operation of its business as presently conducted.  As of the date hereof, Borrowers and Guarantors do not have any material Intellectual Property registered, or subject to pending applications, in the United States Patent and Trademark Office or any similar office or agency in the United States, any State thereof, any political subdivision thereof, other than those described in Schedule 8.11 to the Information Certificate and has not granted any licenses with respect thereto other than as set forth in Schedule 8.11 to the Information Certificate.  Except as would not have a Material Adverse Effect, no event has occurred which permits or would permit after notice or passage of time or both, the revocation, suspension or termination of such rights.  To the best of any Borrower’s and Guarantor’s knowledge, no slogan or other advertising device, product, process, method, substance or other Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to be sold by or employed by any Borrower or Guarantor infringes any patent, trademark, servicemark, tradename, copyright, license or other Intellectual Property owned by any other Person presently where such infringement has or would reasonably be expected to have Material Adverse Effect or adversely affect the ability of any Borrower or Guarantor to sell or otherwise dispose of Inventory having a value in excess of $250,000.  No claim or litigation is pending or threatened in writing against or affecting any Borrower or Guarantor contesting its right to sell or use any such Intellectual Property where such claim or litigation if adversely determined for any Borrower or Guarantor would reasonably be expected to have a Material Adverse Effect or would adversely affect the ability of any Borrower or Guarantor to sell or otherwise dispose of Inventory having a value in excess of $250,000.  Schedule 8.11 to the Information Certificate sets forth all of the material agreements or other arrangements of each Borrower and Guarantor pursuant to which such Borrower or Guarantor has a license or other right to use any trademarks, logos, designs, representations or other Intellectual Property owned by another person as in effect on the date hereof and the dates of the expiration of such agreements or other arrangements of such Borrower or Guarantor as in effect on the date hereof which is necessary or of material value to such Borrower’s or Guarantor’s business (collectively, together with such agreements or other arrangements as may be entered into by any Borrower or Guarantor after the date hereof, collectively, the “License Agreements” and individually, a “License Agreement”).  No material trademark, servicemark, copyright or other material Intellectual Property at any time used by any Borrower or Guarantor which is owned by another person, or owned by such Borrower or Guarantor subject to any security interest, lien, collateral assignment, pledge or other encumbrance in favor of any person other than Collateral Agent, is affixed to or incorporated in any Eligible Inventory, except (a) to the extent permitted under the term of the license agreements listed on Schedule 8.11 to the Information Certificate and (b) to the extent the sale of Inventory to which such Intellectual Property is affixed or incorporated is permitted to be sold by such Borrower or Guarantor under applicable law (including the United States Copyright Act of 1976).

 

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8.12         Subsidiaries; Affiliates; Capitalization; Solvency.

 

(a)           Each Borrower and Guarantor does not have any direct or indirect Subsidiaries and is not engaged in any joint venture or partnership as of the date hereof except as set forth in Schedule 8.12 to the Information Certificate.

 

(b)           As of the date hereof, each Borrower and Guarantor is the record and beneficial owner of all of the issued and outstanding shares of Equity Interests of each of the Subsidiaries listed on Schedule 8.12 to the Information Certificate as being owned by such Borrower or Guarantor and there are no proxies, irrevocable or otherwise, with respect to such shares and no equity securities of any of the Subsidiaries are or may become required to be issued by reason of any options, warrants, rights to subscribe to, calls or commitments of any kind or nature and there are no contracts, commitments, understandings or arrangements by which any Subsidiary is or may become bound to issue additional shares of its Equity Interests or securities convertible into or exchangeable for such shares.

 

(c)           The issued and outstanding shares of Equity Interests of each Borrower and Guarantor (other than Parent) are directly and beneficially owned and held by the persons indicated in the Information Certificate, and in each case all of such shares have been duly authorized and are fully paid and non-assessable, free and clear of all claims, liens, pledges and encumbrances of any kind, except as disclosed in writing to Agents prior to the date hereof or otherwise permitted hereunder.

 

(d)           Each Borrower and Guarantor is Solvent and will continue to be Solvent after giving effect to the creation of the Obligations, the security interests of Collateral Agent and the other transaction contemplated hereunder.

 

(e)           The Inactive Subsidiaries do not have any material liabilities, are not engaged in any business or commercial activities, do not own any assets with a book value of more than $100,000 in the aggregate and are not obligated or liable, directly or indirectly, contingently or otherwise, in respect of any material Indebtedness or other material obligations.

 

8.13         Labor Disputes.

 

(a)           Set forth on Schedule 8.13 to the Information Certificate is a list (including dates of termination) of all collective bargaining or similar agreements between or applicable to each Borrower and Guarantor and any union, labor organization or other bargaining agent in respect of the employees of any Borrower or Guarantor on the date hereof.

 

(b)           Except as set forth on Schedule 8.13 to the Information Certificate, there is (i) no significant unfair labor practice complaint pending against any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened in writing against it, before the National Labor Relations Board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is pending on the date hereof against any Borrower or Guarantor or, to best of any Borrower’s or Guarantor’s knowledge, threatened against it, and (ii) no significant strike, labor dispute, slowdown or stoppage is pending against any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened against any Borrower or Guarantor.

 

8.14         Restrictions on Subsidiaries.  Except for restrictions contained in this Agreement or any other agreement with respect to Indebtedness of any Borrower or Guarantor permitted hereunder as in effect on the date hereof, there are no contractual or consensual restrictions on any Borrower or Guarantor or any of its Subsidiaries which prohibit or otherwise restrict (a) the transfer of cash or other assets (i) between any Borrower or Guarantor and any of its or their Subsidiaries or (ii) between any Subsidiaries of any Borrower or any Guarantor or (b) the ability of any Borrower or Guarantor or any of its or their Subsidiaries to incur Indebtedness or grant security interests to an Agent or any Lender in the Collateral.

 

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8.15         Material Contracts.  Schedule 8.15 to the Information Certificate sets forth all Material Contracts to which any Borrower or Guarantor is a party or is bound as of the date hereof.  Borrowers and Guarantors have delivered true, correct and complete copies of such Material Contracts to Administrative Agent on or before the date hereof.  Borrowers and Guarantors are not in breach or in default in any material respect of or under any Material Contract and have not received any notice of the intention of any other party thereto to terminate any Material Contract.

 

8.16         Payable Practices.  Each Borrower and Guarantor has not made any material change in its customary accounts payable practices from those in effect immediately prior to the date hereof.

 

8.17         OFAC.  No Borrower or Guarantor or any of their respective Subsidiaries or Affiliates: (a) is a Sanctioned Person, (b) has more than ten (10%) percent of its assets in Sanctioned Entities, or (c) derives more than ten (10%) percent of its operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  The proceeds of any Loan will not be used and have not been used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

8.18         Accuracy and Completeness of Information.  All information furnished by or on behalf of any Borrower or Guarantor in writing to an Agent or any Lender in connection with this Agreement or any of the other Financing Agreements or any transaction contemplated hereby or thereby, including all information on the Information Certificate is true and correct in all material respects on the date as of which such information is dated or certified and does not omit any material fact necessary in order to make such information not misleading.  No event or circumstance has occurred which has had or could reasonably be expected to have a Material Adverse Affect, which has not been fully and accurately disclosed to Agents in writing prior to the date hereof.

 

8.19         Survival of Warranties; Cumulative.  (a) All representations and warranties contained in this Agreement or any of the other Financing Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have been made again to Agents and Lenders on the date of each additional borrowing or Letter of Credit issued hereunder, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) and shall be conclusively presumed to have been relied on by Agents and Lenders regardless of any investigation made or information possessed by an Agent or any Lender.  The representations and warranties set forth herein shall be cumulative and in addition to any other representations or warranties which any Borrower or Guarantor shall now or hereafter give, or cause to be given, to an Agent or any Lender.  The representations and warranties contained in this Agreement shall terminate on the date that the Commitments have been terminated and all Obligations have been paid in full in cash (other than contingent Obligations for which Administrative Agent has received cash collateral, or at its option, a letter of credit in accordance with Section 15.1 hereof).

 

8.20         Compliance with FCPA.  Each Borrower and Guarantor is in compliance with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and any foreign counterpart thereto.  No Borrower or Guarantor has made a payment, offering, or promise to pay, or authorized the payment of, money or anything of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to a foreign official, foreign political party or party official or any candidate for foreign political office, and (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to such Borrower or Guarantor or to any other Person, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

 

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8.21         Anti-Terrorism Laws.  No Borrower, Guarantor or any of their respective Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended.  No Borrower, Guarantor or any or their respective Subsidiaries is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or (c) the Patriot Act.  No Borrower or Guarantor (i) is a blocked person described in Section 1 of the Anti-Terrorism Order or (ii) to the best of its knowledge, engages in any dealings or transactions, or is otherwise associated, with any such blocked person.

 

8.22         Regulation H.  No Mortgaged Property is a Flood Hazard Property

 

8.23         Insurance.  The insurance coverage of each Borrower and Guarantor as of the Closing Date is outlined as to carrier, policy number, expiration date, type and amount in the insurance certificates delivered to the Agents on the Closing Date pursuant to Section 4.1(k) and such insurance coverage complies with the requirements set forth in Section 9.5.  The insurance certificates delivered to the Agents hereunder shall be updated from time to time by the Borrower Agent to include additional insurance coverage.

 

8.24         Brokers’ Fees.  No Borrower or Guarantor has any obligation to any Person in respect of any finder’s, broker’s, investment banking or other similar fee in connection with any of the transactions contemplated under the Financing Agreements other than the closing and other fees payable pursuant to this Agreement.

 

8.25         Use of Proceeds.  The proceeds of the Revolving Loan shall be used by the Borrowers solely (a) refinance certain existing Indebtedness of the Parent and its Subsidiaries in connection with the Refinancing Transactions, (b) to pay any costs, fees and expenses associated with this Agreement on the Closing Date, (c) to pay any costs, fees and expenses incurred in connection with the Refinancing Transactions and (d) for working capital and other general corporate purposes of the Parent and its Subsidiaries.

 

8.26         Margin Regulations.  No part of the proceeds of the Revolving Loans will be used directly or indirectly for any purpose that violates, or that would require any Lender to make any filings in accordance with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  The Borrowers and the Guarantors (a) are not engaged, principally or as one of their important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” “margin stock” within the respective meanings of each of such terms under Regulation U and (b) taken as a group do not own “margin stock” except as identified in the financial statements referred to in Section 8.3 or delivered pursuant to Section 9.6 and the aggregate value of all “margin stock” owned by the Parent and its Subsidiaries taken as a group does not exceed 25% of the value of their assets.

 

8.27         Investment Company Act; etc.  No Borrower or Guarantor is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.  No Borrower or Guarantor is subject to regulation under the Federal Power Act, the Interstate Commerce Act, the Public Utility Holding Company Act of 2005 or any federal or state statute or regulation limiting its ability to incur the Obligations.

 

8.28         Designation as Senior Debt.  The Obligations constitute “Designated Senior Debt”, or any similar term under and as defined in the agreements relating to any Indebtedness of Borrowers or Guarantors, including Subordinated Debt, which contains such designation.

 

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SECTION 9.                                                    AFFIRMATIVE COVENANTS

 

9.1           Maintenance of Existence.

 

(a)           Each Borrower and Guarantor shall at all times preserve, renew and keep in full force and effect its corporate or limited liability company or limited partnership existence and rights and franchises with respect thereto and maintain in full force and effect all Permits necessary to carry on the business as presently or proposed to be conducted, other than as (i) permitted in Section 10.1 hereof, (ii) otherwise permitted hereunder or under any of the other Financing Agreements or (iii) with respect to maintenance of the rights, franchises and Permits, could not be reasonably expected to have a Material Adverse Effect.

 

(b)           No Borrower or Guarantor shall change its name unless each of the following conditions is satisfied: (i) Agents shall have received not less than thirty (30) days (or at such later time as Agents may agree) subsequent written notice from the Borrower Agent of such proposed change, which notice shall accurately set forth the new name; and (ii) Agents shall have received a copy of the amendment to the certificate of incorporation, certificate of formation or other organizational document of such Borrower or Guarantor, as applicable, providing for the name change certified by the Secretary of State of the jurisdiction of incorporation or organization of such Borrower or Guarantor as soon as it is available.

 

(c)           No Borrower or Guarantor shall change its chief executive office or its mailing address or organizational identification number (or if it does not have one, shall not acquire one) unless Agents shall have received not less than thirty (30) days’ prior written notice from Borrower Agent of such proposed change, which notice shall set forth such information with respect thereto as Agents may reasonably require and Agents shall have received such agreements as Agents may reasonably require in connection therewith.  No Borrower or Guarantor shall change its type of organization, jurisdiction of organization or other legal structure, except that a Borrower, Guarantor or Subsidiary may convert (either directly or by way of merger) into a limited liability company or limited partnership or other form of legal entity reasonably acceptable to Agents, provided, that, each of the following conditions is satisfied: (i) such company, partnership or other legal entity is organized under the laws of a jurisdiction in the United States of America, (ii) Agents shall have received not less than fifteen (15) days’ prior written notice from Borrower Agent of such proposed change, which notice shall accurately set forth a description of the new form, (iii) Agents shall have received the organizational documents of such entity (certified by the appropriate Governmental Authority, where available to be so certified), together with such other agreements, documents, and instruments related thereto as Agents may reasonably request, (iv) such change shall not adversely affect the security interests and liens of Collateral Agent in the assets of such Borrower or Guarantor or the ability of Collateral Agent to enforce any of its rights or remedies with respect to such Borrower or Guarantor, in the determination of Collateral Agent and (v) as of the date of such conversion, and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing.

 

(d)           Each Borrower and Guarantor shall do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, authorizations, patents, copyrights, trademarks and trade names used in the conduct of their respective businesses, other than as could not reasonably be expected to have a Material Adverse Effect; and at all times maintain and preserve all property used in the conduct of such business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times, other than as could not reasonably be expected to have a Material Adverse Effect.

 

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9.2           New Collateral Locations.  (a)            Each Borrower and Guarantor may only open any new location on which ABL Priority Collateral is located so long as (a) such locations are within the United States or its territories or Canada, (b) such location is set forth in the applicable report provided for in Section 7.1(a) to the extent required under such Section or in any event if Collateral having a value of more than $500,000 is or will be kept at such location, Collateral Agent has received five (5) Business Days’ written notice within the time of the opening of any such new location and (c) upon Collateral Agent’s request, such Borrower or Guarantor executes and delivers, or causes to be executed and delivered, to Collateral Agent such agreements, documents, and instruments as Agents’ may deem reasonably necessary or desirable to protect Collateral Agent’s interests in the Collateral at such location; provided, that, upon Agents’ request, Borrowers and Guarantors shall only be required to use their commercially reasonable efforts to obtain a Collateral Access Agreement ; provided, further, that in lieu of using such commercially reasonable efforts, the Borrowers and the Guarantors may elect that Agents establish Reserves in respect of amounts due or to become due to the owner, lessor or operator of the relevant location as provided for in the definition of Reserves.  Without limiting the obligations of the Borrowers and the Guarantors hereunder, at the request of the Administrative Agent, the Collateral Agent shall deliver copies of written notices, agreements, documents and instruments which have been delivered to the Collateral Agent but not to the Administrative Agent.

 

9.3           Compliance with Laws, Regulations, Etc.

 

(a)           Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times, comply in all respects with all laws, rules, regulations, licenses, approvals, orders and other Permits applicable to it and duly observe all requirements of any foreign, Federal, State or local Governmental Authority where the failure to do so has or could reasonably be expected to have a Material Adverse Effect.

 

(b)           Borrowers and Guarantors shall give written notice to Administrative Agent immediately upon any Borrower’s or Guarantor’s receipt of any notice of, or any Borrower’s or Guarantor’s otherwise obtaining knowledge of, (i) the occurrence of any event involving the release, spill or discharge, threatened or actual, of a material amount of any Hazardous Material that has or could reasonably be expected to have a Material Adverse Effect or (ii) any investigation, proceeding, complaint, order, directive, claims, citation or notice that with respect to any of the following that has or could reasonably be expected to have a Material Adverse Effect: (A) any non-compliance with or violation of any Environmental Law by any Borrower or Guarantor or (B) the release, spill or discharge of any Hazardous Material other than in the ordinary course of business and other than as permitted under any applicable Environmental Law. Copies of all environmental surveys, audits, assessments, feasibility studies and results of remedial investigations shall be promptly furnished, or caused to be furnished, by such Borrower or Guarantor to Administrative Agent upon Administrative Agent’s request.  Each Borrower and Guarantor shall take prompt action to respond to any material non-compliance with any of the Environmental Laws and shall regularly report to Administrative Agent on such response.

 

(c)           Without limiting the generality of the foregoing, whenever Administrative Agent reasonably determines that there is non-compliance, or any condition which requires any action by or on behalf of any Borrower or Guarantor in order to avoid any non compliance, with any Environmental Law that has or could reasonably be expected to have a Material Adverse Effect, Borrowers shall, at Administrative Agent’s request and Borrowers’ expense: (i) cause an independent environmental engineer reasonably acceptable to Administrative Agent to conduct such tests of the site where non-compliance or alleged non compliance with such Environmental Laws has occurred as to such non-compliance and prepare and deliver to Administrative Agent a report as to such non-compliance setting forth the results of such tests, a proposed plan for responding to any environmental problems described therein, and an estimate of the costs thereof and (ii) provide to Administrative Agent a supplemental report of such engineer whenever the scope

 

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of such non-compliance, or such Borrower’s or Guarantor’s response thereto or the estimated costs thereof, shall change in any material respect.

 

(d)           Each Borrower and Guarantor shall indemnify and hold harmless Agents and Lenders and their respective directors, officers, employees, agents, invitees, representatives, successors and assigns, from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) directly or indirectly arising out of or attributable to the use, generation, manufacture, reproduction, storage, release, threatened release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup or other remedial work with respect to any property of any Borrower or Guarantor and the preparation and implementation of any closure, remedial or other required plans.  All representations, warranties, covenants and indemnifications in this Section 9.3 shall survive the payment of the Obligations and the termination of this Agreement.

 

9.4           Payment of Taxes and Claims.  Except as could not reasonably be expected to have a Material Adverse Effect, each Borrower and Guarantor shall, and shall cause any Subsidiary to, duly pay and discharge all taxes, assessments, contributions and governmental charges upon or against it or its properties or assets, except for taxes the validity of which is being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary, as the case may be, and with respect to which adequate reserves have been set aside on its books to the extent required by GAAP.

 

9.5           Insurance.  Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times, maintain with financially sound and reputable insurers insurance with respect to the Collateral against loss or damage and all other insurance of the kinds and in the amounts customarily insured against or carried by corporations of established reputation engaged in the same or similar businesses and similarly situated.  Said policies of insurance shall be reasonably satisfactory to Agents as to form, amount and insurer (provided, that, Borrowers and Guarantors may maintain self insurance plans to the extent companies of the same or similar businesses and similarly situated do so).  Borrowers and Guarantors shall furnish certificates, policies or endorsements to Agents as Agents shall reasonably require as proof of such insurance, and, Agents are authorized, but not required, to obtain such insurance at the expense of Borrowers if any Borrower or Guarantor fails at any time to do so.  All policies shall provide for at least thirty (30) days prior written notice to Agents of any cancellation or reduction of coverage.  Agents may act as attorney for each Borrower and Guarantor in obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance.  Borrowers and Guarantors shall cause Collateral Agent to be named as a loss payee as its interests may appear and an additional insured (but without any liability for any premiums) under such insurance policies and Borrowers and Guarantors shall obtain non-contributory lender’s loss payable endorsements to all insurance policies in form and substance reasonably satisfactory to Agents.  Such lender’s loss payable endorsements shall specify that the proceeds of such insurance shall be payable to Agents as their interests may appear and further specify that Agents and Lenders shall be paid regardless of any act or omission by any Borrower, Guarantor or any of its or their Affiliates.  Payments of insurance proceeds will be subject to the Intercreditor Agreement, if and to the extent applicable.  Without limiting any other rights of Agents or Lenders, any insurance proceeds relating to ABL Priority Collateral received by Agents or proceeds of condemnation awards relating to ABL Priority Collateral payable at any time may be applied to payment of the Obligations (without permanent reduction thereof), whether or not then due, in any order and in such manner as Agents may determine.  Upon application of such proceeds to the Revolving Loans, Revolving Loans may be available subject and pursuant to the terms hereof to be used for the costs of repair or replacement of the Collateral lost or damages resulting in the payment of such insurance proceeds.

 

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9.6           Financial Statements and Other Information.

 

(a)           Each Borrower and Guarantor shall, and shall cause any Subsidiary to, keep proper books and records in which true and complete entries shall be made of all dealings or transactions of or in relation to the Collateral and the business of such Borrower, Guarantor and its Subsidiaries in accordance with GAAP.  Borrowers and Guarantors shall during regular business hours and upon reasonable notice from the Agents furnish to Agents and Lenders all such financial and other information as Agents shall reasonably request relating to the Collateral and the assets, business and operations of Borrowers and Guarantors, and Borrower Agent shall notify the auditors and accountants of Borrowers and Guarantors that Agents are authorized to obtain such information directly from them (other than materials protected by the attorney-client privilege and materials which the Borrowers may not disclose without violation of a confidentiality obligation binding upon it) at any reasonable time (upon three days advance notice so long as no Default or Event of Default shall have occurred and be continuing).  Without limiting the foregoing, Borrowers shall furnish or cause to be furnished to Administrative Agent, and upon Administrative Agent’s request, to Collateral Agent and each Lender, the following:

 

(i)            as soon as available, but in any event within thirty (30) days after the end of each fiscal month that is not the end of a fiscal quarter of Parent, monthly unaudited consolidated financial statements and unaudited consolidating financial statements (in substantially the same format and with the same scope of information as have been provided to Administrative Agent prior to the date hereof), all in reasonable detail (but without footnotes), fairly presenting in all material respects the financial position and the results of the operations of Parent and its Subsidiaries as of the end of and through such fiscal month, subject to normal year-end adjustments; and

 

(ii)           as soon as available, but in any event within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of Parent, quarterly unaudited consolidated financial statements and unaudited consolidating financial statements (including in each case balance sheets, statements of income and loss, statements of cash flow, and statements of shareholders’ equity), all in reasonable detail, fairly presenting in all material respects the financial position and the results of the operations of Parent and its Subsidiaries as of the end of and through such fiscal quarter, subject to normal year-end adjustments; and

 

(iii)          within ninety (90) days after the end of each fiscal year, audited consolidated financial statements and unaudited consolidating financial statements of Parent and its Subsidiaries (including in each case balance sheets, statements of income and loss, statements of cash flow and statements of shareholders’ equity), and the accompanying notes thereto, all in reasonable detail, fairly presenting in all material respects the financial position and the results of the operations of Parent and its Subsidiaries as of the end of and for such fiscal year.

 

(iv)          Notwithstanding the foregoing, (x) in the event that the Parent (or its direct or indirect parent) delivers to the Administrative Agent an Annual Report for the Parent (or its direct or indirect parent) on Form 10-K for such fiscal year, as filed with the SEC, within 90 days after the end of such fiscal year, such Form 10-K shall satisfy all requirements of paragraph (a)(iii) of this Section and (y) in the event that the Parent (or its direct or indirect parent) delivers to the Administrative Agent a Quarterly Report for the Parent (or its direct or indirect parent) on Form 10-Q for such fiscal quarter, as filed with the SEC, within 45 days after the end of such fiscal quarter, such Form 10-Q shall satisfy all requirements of paragraph (a)(ii) of this Section.

 

(b)           Borrowers and Guarantors shall promptly notify Administrative Agent in writing of the details of (i) any loss, damage, investigation, action, suit, proceeding or claim relating to Collateral having a value of more than $500,000 or which if adversely determined would result in any material adverse change in any Borrower’s or Guarantor’s business, properties, assets, goodwill or condition, financial or otherwise, (ii) any Material Contract being terminated or amended or any new Material Contract entered into (in which event Borrowers and Guarantors shall provide Administrative Agent with a copy of such Material

 

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Contract), (iii) any order, judgment or decree in excess of $500,000 shall have been entered against any Borrower or Guarantor any of its or their properties or assets, (iv) any notification of a material violation of laws or regulations received by any Borrower or Guarantor, (including, without limitation, Environmental Laws), (v) any ERISA Event, (vi) any labor controversy that has resulted in, or threatens to result in, a strike or other work action against any Borrower or Guarantor which could reasonably be expected to have a Material Adverse Effect, (vii) any other development or event which could reasonably be expected to have a Material Adverse Effect and (viii) the occurrence of any Default or Event of Default.

 

(c)           Borrowers shall furnish to Administrative Agent (i) not less than ten (10) Business Days’ prior written notice of (A) the intention of any Subsidiary of Parent to merge or consolidate as permitted under Section 10.1(a) hereof, together with such other information with respect thereto as Administrative Agent may reasonably request, (B) (1) the public issuance and sale by Parent of Equity Interests, (2) the issuance and sale by Parent, to stockholders that are not officers, directors and employees of Parent, of Equity Interests in an amount greater than $3,000,000 for any one issuance and sale or (3) the issuance and sale by any Subsidiary of Equity Interests, in each case as permitted under clause (g) of the definition of Permitted Dispositions, together with such other information with respect thereto as Administrative Agent may reasonably request, (C) the intention of any Subsidiary of Parent to wind up, liquidate or dissolve as permitted under Section 10.1(c) hereof, together with such other information with respect thereto as Administrative Agent may reasonably request, and (ii) all notices or demands in connection with such Indebtedness either received by any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be.

 

(d)           Borrowers and Guarantors shall furnish to Administrative Agent, and upon Administrative Agent’s reasonable request, to each Lender, in form and detail reasonably satisfactory to Administrative Agent:

 

(i)            concurrently with the delivery of the financial statements referred to in Section 9.6(a)(iii), the unqualified opinion of independent certified public accountants with respect to the audited consolidated financial statements, which independent accounting firm shall be selected by Borrower Agent and reasonably acceptable to Administrative Agent, that such audited consolidated financial statements have been prepared in accordance with GAAP, and present fairly in all material respects the results of operations and financial condition of Parent and its Subsidiaries as of the end of and for the fiscal year then ended;

 

(ii)           concurrently with the delivery of the financial statements referred to in Sections 9.6(a)(ii) and 9.6(a)(iii), a compliance certificate substantially in the form of Exhibit D hereto by the chief financial officer, vice president of finance, treasurer or controller of Borrower Agent on behalf of Borrowers and Guarantors, along with a schedule in form reasonably satisfactory to Administrative Agent of the calculations used in determining, as of the end of such month, the ratio and amounts provided for in Section 11 of this Agreement for such month and a written summary of material changes in GAAP and in the consistent application thereof that materially affected the financial covenant calculations for the applicable period;

 

(iii)          at such time as available, but in any event prior to the end of each fiscal year of Parent, beginning with the fiscal year ending December 31, 2011, projected consolidated financial statements (including in each case substantially in the same format and with the same scope of information as in the projections most recently provided to Administrative Agent prior to the date hereof) of Parent and its Subsidiaries for the next fiscal year, all in reasonable detail, and in a format consistent with the projections delivered by Borrowers to Administrative Agent prior to the date hereof, together with such supporting information as Administrative Agent may reasonably request, which projected financial statements shall be prepared on a quarterly basis for the next succeeding year and shall represent the reasonable best estimate by

 

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Borrowers and Guarantors of the future financial performance of Parent and its Subsidiaries for the periods set forth therein and shall have been prepared on the basis of the assumptions set forth therein which Borrowers and Guarantors believe are fair and reasonable as of the date of preparation in light of current and reasonably foreseeable business conditions (it being understood that actual results may differ from those set forth in such projected financial statements);

 

(iv)          promptly after the same are available, copies of each annual report, proxy or annual or quarterly financial statement or other report or communication sent to the equity holders of any Borrower or Guarantor, and copies of all annual, regular, periodic and special reports and registration statements, in each case, which a Borrower or Guarantor may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Administrative Agent pursuant hereto;

 

(v)           concurrently with the delivery of the financial statements referred to in Sections 9.6(a)(i) and 9.6(a)(ii), a certificate by the chief financial officer, vice president of finance, treasurer or controller of Borrower Agent on behalf of Borrowers and Guarantors containing information regarding the amount of all sales or other dispositions of assets (whether voluntary or involuntary), issuances or incurrence of Indebtedness or Equity Interests, Permitted Investments, Restricted Payments, and optional prepayments of Indebtedness that occurred during the period covered by such financial statements and such other information with respect thereto as Administrative Agent may reasonably request;

 

(vi)          promptly after any request by an Agent or any Lender, (A) 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 Parent by independent accountants in connection with the accounts or books of Parent or any Subsidiary, or any audit of any of them and (B) the outstanding Revolving Loans and Letter of Credit Obligations on the books and records of the AZEK Companies and the outstanding Revolving Loans and Letter of Credit Obligations on the books and records of the Scranton Companies as of the most recent fiscal month end for which financial statements are then available or after a Cash Dominion Event, at such other time or times as Administrative Agent may request;

 

(vii)         promptly, and in any event within five (5) Business Days after receipt thereof by any Borrower or Guarantor or any Subsidiary thereof, copies of each notice or other correspondence received from the Securities and Exchange Commission (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of Parent or any Subsidiary thereof;

 

(viii)        concurrently with the delivery of the financial statements referred to in Sections 9.6(a)(i) and 9.6(a)(ii), a certificate by the chief executive officer, chief financial officer, vice president of finance, treasurer or controller of Borrower Agent on behalf of Borrowers and Guarantors attaching the insurance binder or other evidence of insurance for any insurance coverage of Borrowers, Guarantors or any Subsidiary that was renewed, replaced or modified during the period covered by such financial statements.

 

(e)           As to any information contained in materials furnished pursuant to Section 9.6(d)(iv), Parent shall not be separately required to furnish such information under Section 9.6(a) hereof, but the foregoing shall not be in derogation of the obligation of Parent to furnish the information and materials described in Section 9.6(a) at the times specified therein.

 

(f)            Documents required to be delivered pursuant to Section 9.6(a)(iii) or Section 9.6(d)(iv) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are posted on a Borrower’s behalf on an Internet

 

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or intranet website, if any, to which each Lender and each Agent has access (whether commercial, third-party website or whether sponsored by Administrative Agent); provided  that: (A) Borrowers shall deliver paper copies of such documents to Administrative Agent or Collateral Agent or any Lender that requests Borrowers to deliver such paper copies until a written request to cease delivering paper copies is given by Administrative Agent, Collateral Agent or such Lender and (B) Borrowers shall notify each Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance Borrowers shall be required to provide paper copies of the compliance certificates required by Section 9.6(d)(ii) to Administrative Agent. Except for such compliance certificates, Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by Borrowers with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

(g)           Borrowers and Guarantors hereby acknowledge that Administrative Agent and/or its Affiliates may make available to Lenders and Issuing Bank materials and/or information provided by or on behalf of Borrowers and Guarantors hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Borrowers, Guarantors or their securities) (each, a “Public Lender”).  Borrowers and Guarantors shall be deemed to have authorized Administrative Agent and its Affiliates, Collateral Agent and the Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time filed with the Securities and Exchange Commission as not containing any material non-public information with respect to Borrowers, Guarantors or their securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 15.5).  All Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor.”  Administrative Agent and its Affiliates, Collateral Agent and Lenders shall be entitled to treat any Borrower Materials that are not marked “PRIVATE” or that are at any time filed with the Securities and Exchange Commission as being suitable for posting on a portion of the Platform not marked as “Public Investor.”

 

(h)           Borrowers and Guarantors shall furnish or cause to be furnished to Administrative Agent such other information respecting the Collateral and the business of Borrowers and Guarantors, as Agents may, from time to time, reasonably request.  Administrative Agent is hereby authorized to deliver a copy of any financial statement or any other information relating to the business of Borrowers and Guarantors to any court or other Governmental Authority or to any Lender or Participant or prospective Lender or Participant or any Affiliate of any Lender or Participant subject to Section 15.5 hereof.

 

9.7           Compliance with ERISA.  Except as could not reasonably be expected to have a Material Adverse Effect, each Borrower and Guarantor shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance with the applicable provisions of ERISA, the Code and other Federal and State law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; (c) not terminate any Pension Plan so as to incur any liability to the Pension Benefit Guaranty Corporation; (d) not allow or suffer to exist any prohibited transaction involving any Plan or any trust created thereunder which would subject such Borrower, Guarantor or ERISA Affiliate to a tax or other liability on prohibited transactions imposed under Section 4975 of the Code or ERISA; (e) make all required contributions to any Plan which it is obligated to pay under Section 302 of ERISA, Section 412 of the Code or the terms of such Plan; (f) not allow or suffer to exist any accumulated funding deficiency, whether or not waived, with respect to any such Pension Plan; (g)  not engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA; or (h) not allow or suffer to exist any occurrence of a reportable event or any other event or condition which presents a risk of termination by the Pension Benefit Guaranty

 

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Corporation of any Plan that is a single employer plan, which termination could result in any liability to the Pension Benefit Guaranty Corporation.

 

9.8           End of Fiscal Years; Fiscal Quarters.  Each Borrower and Guarantor shall, for financial reporting purposes, cause its, and each of its Subsidiaries’ fiscal years to end on December 31 of each year, and fiscal quarters to end on the last day of each of March, June, September and December of each year.

 

9.9           License Agreements.

 

(a)           With respect to a material License Agreement applicable to Intellectual Property that is owned by a third party and licensed to a Borrower or Guarantor and that is affixed to or otherwise necessary for the manufacture, sale or distribution of any Inventory or the collection of Receivables (other than an off-the-shelf product with a shrink wrap license or that is generally available), each Borrower and Guarantor shall (i) give Agents prompt prior written notice of its intention to not renew or to terminate, cancel, surrender or release its rights under any such License Agreement, or any amendment of any such License Agreement that limits the scope of the right of such Borrower or Guarantor to use the Intellectual Property subject to such License Agreement in any material respect, either with respect to product, territory, term or otherwise, or that increases in any material respect the amounts to be paid by such Borrower or Guarantor thereunder or in connection therewith (and Agents may establish such Reserves as a result of any of the foregoing as Agents may determine in their Permitted Discretion), (ii) give Agents prompt written notice of any such License Agreement entered into by such Borrower or Guarantor after the date hereof, or any material amendment to any such License Agreement existing on the date hereof, in each case together with a true, correct and complete copy thereof and such other information with respect thereto as Agents may in good faith request, (iii) give Agents prompt written notice of any material breach of any obligation, or any default, by the third party that is the licensor or by the Borrower or Guarantor that is the licensee or any other party under any such License Agreement, and deliver to Agents (promptly upon the receipt thereof by such Borrower or Guarantor in the case of a notice to such Borrower or Guarantor and concurrently with the sending thereof in the case of a notice from such Borrower or Guarantor) a copy of each notice of default and any other notice received or delivered by such Borrower or Guarantor in connection with any such a License Agreement that relates to the scope of the right, or the continuation of the right, of such Borrower or Guarantor to use the Intellectual Property subject to such License Agreement or the amounts required to be paid thereunder.

 

(b)           With respect to a material License Agreement applicable to Intellectual Property that is owned by a third party and licensed to a Borrower or Guarantor and that is affixed to or otherwise necessary for the manufacture, sale or distribution of any Inventory or the collection of Receivables (other than an off-the-shelf product with a shrink wrap license or that is generally available), at any time an Event of Default shall exist or have occurred and be continuing and subject to the Intercreditor Agreement, Collateral Agent shall have, and is hereby granted, the irrevocable right and authority, at its option, to renew or extend the term of such License Agreement, whether in its own name and behalf, or in the name and behalf of a designee or nominee of Collateral Agent or in the name and behalf of such Borrower or Guarantor, subject to and in accordance with the terms of such License Agreement.  Collateral Agent may, but shall not be required to, perform any or all of such obligations of such Borrower or Guarantor under any of the License Agreements, including, but not limited to, the payment of any or all sums due from such Borrower or Guarantor thereunder.  Any sums so paid by Collateral Agent shall constitute part of the Obligations.

 

9.10         Additional Guaranties and Collateral Security; Further Assurances.

 

(a)           In the case of the formation or acquisition by a Borrower or Guarantor of any wholly owned Subsidiary after the date hereof (other than a Foreign Subsidiary or Inactive Subsidiary), as to any

 

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such Subsidiary, (i) the Borrower or Guarantor forming such Subsidiary shall cause any such Subsidiary to execute and deliver to Agents, in form and substance reasonably satisfactory to Agents, a joinder agreement to the Financing Agreements in order to make such Subsidiary a party to this Agreement as a “Borrower” (at least five (5) Business Days prior to becoming a Borrower hereunder) if it owns accounts or inventory that would constitute Eligible Accounts and Eligible Inventory or otherwise as a “Guarantor” (and if a Borrower to be deemed either one of the Scranton Companies or AZEK Companies based on the business of businesses from which the greatest percentage of its revenues arose in the immediately preceding fiscal year of such person or based on such other circumstances as Agents and Borrower Agent may agree), and a party to any guarantee as a “Guarantor” or pledge agreement as a “Pledgor”, and including, but not limited to, supplements and amendments hereto and to any of the other Financing Agreements, authorization to file UCC financing statements, Collateral Access Agreements (to the extent required under Section 9.2), to the extent such Person owns Real Property, those documents and other deliverables required by Section 9.13, other agreements, documents or instruments contemplated under Section 5.3 and other consents, waivers, acknowledgments and other agreements from third persons which Agents may deem reasonably necessary or desirable in order to permit, protect and perfect Collateral Agent’s security interests in and liens upon the assets of such Subsidiary and the Equity Interests of any Borrower or Guarantor in such Subsidiary, corporate resolutions and other organization and authorizing documents of such Person, and favorable opinions of counsel to such person and (ii) the Borrower or Guarantor forming such Subsidiary shall execute and deliver to Agents, a pledge and security agreement, in form and substance reasonably satisfactory to Agents, granting to Collateral Agent a second priority pledge of and lien on all of the issued and outstanding shares of Equity Interests of any such Subsidiary, and otherwise comply with the terms of Section 5.3 hereof with respect thereto, such other agreements, documents and instruments as Agents may require in connection with the documents referred to above, including, but not limited to, supplements and amendments hereto, corporate resolutions and other organization and authorizing documents and favorable opinions of counsel to such person.

 

(b)           In the case of an acquisition of assets (other than Equity Interests or Excluded Property) by a Borrower or Guarantor after the date hereof, Agents shall have received, in form and substance reasonably satisfactory to Agents, (i) evidence that Collateral Agent has valid and perfected security interests in and liens upon all purchased assets to the extent such assets constitute Collateral hereunder (except in the case of deposit accounts, within sixty (60) days after the acquisition thereof, provided, that, in no event shall any such assets consisting of Accounts or Inventory so purchased be deemed to be Eligible Accounts or Eligible Inventory until Collateral Agent is perfected in such deposit accounts, except as Agents may otherwise agree), (ii) except as Agent may otherwise agree, all Collateral Access Agreements (to the extent required under Section 9.2 hereof) and other consents, waivers, acknowledgments and other agreements from third persons which Agents may deem necessary or desirable in order to permit, protect and perfect its security interests in and liens upon the assets purchased, and (iii) such other agreements, documents and instruments as Agents may require in connection with the documents referred to above, including, but not limited to, supplements and amendments hereto, corporate resolutions and other organization and authorizing documents and favorable opinions of counsel to such person.  Borrowers and Guarantors shall use commercially reasonable efforts to obtain the agreement of the seller consenting to the collateral assignment by the Borrower or the Guarantor purchasing such assets of all rights and remedies and claims for damages of such Borrower or Guarantor relating to the Collateral (including, without limitation, any bulk sales indemnification) under the agreements, documents and instruments relating to such acquisition; provided, that, Borrowers and Guarantors shall not be required to use such commercially reasonable efforts if in the good faith, reasonable judgment of Borrowers, such efforts would result in the failure to consummate the acquisition.

 

(c)           At the request of Agents at any time and from time to time, Borrowers and Guarantors shall, at their expense, duly execute and deliver, or cause to be duly executed and delivered, such further agreements, documents and instruments, and do or cause to be done such further acts as may be

 

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necessary or proper to evidence, perfect, maintain and enforce the security interests and the priority thereof in the Collateral in accordance with the terms hereof and to otherwise effectuate the provisions or purposes of this Agreement or any of the other Financing Agreements.  Administrative Agent may at any time and from time to time request a certificate from an officer of any Borrower or Guarantor representing that all conditions precedent to the making of Loans and providing Letters of Credit contained herein are satisfied.  In the event of such request by Administrative Agent, Agents and Lenders may, at Administrative Agent’s option, cease to make any further Loans or provide any further Letters of Credit until Administrative Agent has received such certificate and, in addition, Administrative Agent has reasonably determined that such conditions are satisfied.

 

9.11         [Reserved].

 

9.12         Costs and Expenses.  Borrowers and Guarantors shall pay to each Agent on demand all reasonable costs, expenses and filing fees paid or payable in connection with the preparation, negotiation, execution, delivery, recording, syndication, administration, collection, liquidation, enforcement and defense of the Obligations, such Agent’s rights in the Collateral, this Agreement, the other Financing Agreements, the Mortgages and all other documents related hereto or thereto, including any amendments, supplements or consents which may hereafter be contemplated (whether or not executed) or entered into in respect hereof and thereof, including:  (a) all costs and expenses of filing or recording (including UCC financing statement filing fees and mortgage recording fees, if applicable), (b) costs and expenses and fees for insurance premiums, environmental audits, title insurance premiums, surveys, assessments, engineering reports and inspections, appraisal fees and search fees, background checks, costs and expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing and maintaining the Concentration Accounts, together with Collateral Agent’s customary charges and fees with respect thereto; (c) customary charges, fees or expenses charged by any Issuing Bank in connection with any Letter of Credit; (d) actual costs and expenses of preserving and protecting the Collateral; (e) actual costs and expenses paid or incurred in connection with obtaining payment of the Obligations, enforcing the security interests and liens of Collateral Agent in the Collateral, selling or otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement and the other Financing Agreements or defending any claims made or threatened against such Agent or any Lender arising out of the transactions contemplated hereby and thereby (including preparations for and consultations concerning any such matters); (f) all out-of-pocket expenses and costs heretofore and from time to time hereafter incurred by such Agent during the course of periodic field examinations of the Collateral and such Borrower’s or Guarantor’s operations, plus a per diem charge at such Agent’s then standard rate for such Agent’s examiners in the field and office, subject to the limitations set forth in Section 7.7 hereof; and (g) the reasonable fees and disbursements of counsel (including legal assistants) to Agents in connection with any of the foregoing (it being understood that the Borrowers and Guarantors shall not be responsible for fees and expenses of more than one special counsel to Agents and one local counsel to Agents in each appropriate jurisdiction, or in the case of any conflict of interest, additional counsel to the affected Agent, limited to one such additional counsel so long as representation of each such party by a single counsel is consistent with and permitted by professional responsibility rules) and in addition, at any time an Event of Default exists or has occurred and is continuing, the reasonable fees and disbursements of one counsel (including legal assistants) to Lenders in connection with matters described in clauses (d) or (e) above (or in the case of any conflict of interest, additional counsel to the affected Lenders, limited to one such additional counsel so long as representation of each such party by a single counsel is consistent with and permitted by professional responsibility rules).  Notwithstanding the foregoing, any costs and expenses with respect to duties, taxes, levies, imposts, fees, deductions, charges or withholdings of any kind imposed by any Governmental Authority shall be governed by Section 6.8.

 

9.13         After Acquired Real Property.  If after the date hereof any Borrower or Guarantor acquires (a) any fixtures (other than Excluded Property) or (b) any Real Property (other than Excluded Property), without limiting any other rights of an Agent or any Lender, or duties or obligations of any Borrower or

 

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Guarantor, such Borrower or Guarantor shall promptly notify the Agents of such new fixtures or Real Property and, upon Agents’ request, shall (i) deliver to the Collateral Agent a UCC fixture financing statement (or the information to complete a UCC fixture financing statement) with respect to such fixtures, together with a legal description of the Real Property where such fixtures are located, (ii) execute and deliver to Agents a mortgage, deed of trust or deed to secure debt, as Agents may determine, in form and substance reasonably satisfactory to Agents (it being agreed that, if a Mortgage(s) shall have been executed in accordance with Section 4.1(m), a mortgage, deed of trust or deed to secure debt in form and substance substantially similar to such Mortgage(s) shall be deemed reasonably satisfactory to Agents for purposes of this Section 9.13), subject to reasonable and customary procedures of the applicable jurisdiction in which the Mortgaged Property(ies) shall be located, and including any provisions relating to specific state laws satisfactory to Agents and in form appropriate for recording in the real estate records of the jurisdiction in which such Real Property is located, which mortgage, deed of trust or deed to secure debt shall grant to Collateral Agent a second priority lien and mortgage on and security interest in such Real Property (except as such Borrower or Guarantor would otherwise be permitted to incur hereunder or under the Mortgages or as otherwise consented to in writing by Agents) and (iii) such surveys, title reports, title commitments and policies, flood hazard determinations, environmental reports and other agreements, documents and instruments as Agents may reasonably require in connection with any such Real Property.

 

SECTION 10.                                             NEGATIVE COVENANTS

 

10.1         Sale of Assets, Consolidation, Merger, Dissolution, Etc.  Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly,

 

(a)           merge into or with or consolidate with any other Person or permit any other Person to merge into or with or consolidate with it except that International may merge with and into or consolidate with Parent or any Subsidiary of Parent and any Subsidiary of Parent may merge with and into or consolidate with Parent or any other Subsidiary of Parent (including any such Subsidiary that only becomes a Subsidiary after giving effect to such merger or consolidation subject to the conditions set forth herein), provided, that, in each case each of the following conditions is satisfied:  (i) as of the effective date of the merger or consolidation and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, (ii) Administrative Agent shall have received, true, correct and complete copies of all agreements, documents and instruments relating to such merger or consolidation, including, but not limited to, the certificate or certificates of merger to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), (iii) if a Borrower or a Guarantor shall be a party to such merger or consolidation, the surviving entity shall be a Borrower or a Guarantor, (iv) the surviving entity shall expressly confirm, ratify and assume the Obligations and the Financing Agreements to which it is a party in writing, in form and substance reasonably satisfactory to Administrative Agent, and Borrowers and Guarantors shall execute and deliver such other agreements, documents and instruments as Administrative Agent may reasonably request in connection therewith and (v) in the case of a merger with a Person that is not a wholly-owned Subsidiary immediately prior to such merger, such merger shall not be permitted unless it is also permitted under Section 10.4(b) hereof;

 

(b)           sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any Equity Interests or any of its assets to any other Person, except for Permitted Dispositions; provided, that, to the extent that any Collateral is sold as permitted by this Section 10.1(b), other than to a Borrower or Guarantor, or to the extent that Administrative Agent and Required Lenders may consent to any other sale of any assets, concurrently with, and subject to the reasonable satisfaction of the conditions to such sale (including the receipt of the Net Cash Proceeds related thereto), upon the written request of Borrower Agent and effective upon the transfer of the title of the assets sold and the reasonable satisfaction of the applicable conditions to such Permitted Disposition, Collateral Agent shall, at Borrowers’ expense, cause to be filed a

 

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UCC financing statement amendment providing for the release by Collateral Agent of the assets so sold from its security interest granted hereunder; or

 

(c)           suspend operations, wind up, liquidate or dissolve except that any Subsidiary of Parent may wind up, liquidate and dissolve; provided, that, each of the following conditions is satisfied,  (i) the winding up, liquidation and dissolution of such Person shall not violate any law or any order or decree of any court or other Governmental Authority in any material respect and shall not conflict with or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust, or any other agreement or instrument to which any Borrower or Guarantor is a party or may be bound, (ii) such winding up, liquidation or dissolution shall be done in accordance with the requirements of all applicable laws and regulations, (iii) effective upon such winding up, liquidation or dissolution, all of the assets and properties of such Person shall be duly and validly transferred and assigned to its shareholders, free and clear of any liens, restrictions or encumbrances other than the security interest and liens of Collateral Agent or as are otherwise permitted hereunder (and Agents shall have received such evidence thereof as Agents may reasonably require) and Agents shall have received such deeds, assignments or other agreements as Agents may reasonably request to evidence and confirm the transfer of such assets and, without limiting the foregoing, in the case of a winding up, liquidation or dissolution of a Borrower, the transfer and assignment shall be to an entity that is or becomes a Borrower upon such transfer and assignment and has executed and delivered all such agreements, documents and instruments as Agents may reasonably require and as is otherwise provided for herein and Collateral Agent shall maintain and have a perfected security interests in and liens upon all such assets and properties as so transferred on the same terms and with the same priority, (iv) Agents shall have received all documents and agreements that any Borrower or Guarantor has filed with any Governmental Authority or as are otherwise required to effectuate such winding up, liquidation or dissolution, (v) no Borrower or Guarantor shall assume any Indebtedness, obligations or liabilities as a result of such winding up, liquidation or dissolution, or otherwise become liable in respect of any obligations or liabilities of the entity that is winding up, liquidating or dissolving, unless such Indebtedness is otherwise expressly permitted hereunder and (vi) as of the date of such winding up, liquidation or dissolution and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing.

 

10.2         Encumbrances.  Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, create, incur, assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets or properties, including the Collateral, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any security interest or lien with respect to any such assets or properties, except Permitted Liens.

 

10.3         Indebtedness.  Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, incur, create, assume, become or be liable in any manner with respect to, or permit to exist, any Indebtedness, or guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly), the Indebtedness, performance, obligations or dividends of any other Person, except:

 

(a)           the Obligations (excluding Obligations under Hedge Agreements permitted pursuant to Section 10.3(e) below);

 

(b)           Indebtedness (including Capitalized Lease Obligations) arising after the date hereof to the extent secured by security interests in Equipment and mortgages on Real Property (other than Mortgaged Property) acquired after the date hereof in an aggregate outstanding principal amount not to exceed $15,000,000 at any time; provided, that, (i) such security interests and mortgages do not apply to any property of such Borrower, Guarantor or Subsidiary other than specific items of Equipment or Real Property, (ii) the Indebtedness secured thereby does not exceed the cost of the applicable Equipment or Real Property, as the case may be and (iii) as of the date any such Indebtedness is incurred and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

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(c)           Indebtedness and the Guaranty Obligations of the Parent and its Subsidiaries under the Senior Floating Rate Notes and the Senior Fixed Rate Notes; provided, that, the aggregate outstanding principal amount of such Indebtedness evidenced by the Senior Floating Rate Notes shall not exceed $4,620,000 and the aggregate outstanding principal amount of such Indebtedness evidenced by the Senior Fixed Rate Notes shall not exceed $27,908,000 and all such Senior Floating Rate Notes and Senior Fixed Rate Notes shall be subject to an irrevocable redemption notice;

 

(d)           Indebtedness of any Borrower or Guarantor or any other Subsidiary of Parent to any Borrower or Guarantor or any other Subsidiary of Parent arising after the date hereof pursuant to Permitted Investments consisting of loans and advances to such Borrower, Guarantor or other Subsidiary; provided, that, as to any such Indebtedness at any time owing by a Borrower to a Guarantor or any other Subsidiary of Parent (other than a Borrower), (i) the Indebtedness arising pursuant to such Investment shall be Subordinated Debt,  (ii) promptly upon Administrative Agent’s request, Administrative Agent shall have received a subordination agreement, in form and substance reasonably satisfactory to Administrative Agent, providing for the terms of the subordination in right of payment of such Indebtedness of such Borrower (or such Guarantor, in the case of Indebtedness owing by a Guarantor to a Subsidiary of Parent that is not a Borrower or Guarantor) to the prior final payment and satisfaction in full of all of the Obligations, duly authorized, executed and delivered by such Guarantor and such Borrower, (iii) such Borrower (or such Guarantor, in the case of Indebtedness owing by a Guarantor to a Subsidiary of Parent that is not a Borrower or Guarantor) shall not, directly or indirectly make, or be required to make, any payments in respect of such Indebtedness except subject to the terms of subordination applicable thereto, (iv) in the case of any Indebtedness owing to a Borrower or Guarantor that is evidenced by a promissory note or other instrument, such promissory note or other instrument shall be promptly delivered to Collateral Agent (or the Control Agent, as applicable) upon its request to hold as part of the Collateral, with such endorsement and/or assignment by the payee of such note or other instrument as Agents may require, and (v) except as Administrative Agent may otherwise hereafter agree, as of the date any such Indebtedness is incurred and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(e)           Indebtedness of any Borrower or Guarantor or any other Subsidiary of Parent entered into in the ordinary course of business pursuant to a Hedge Agreement; provided, that, (i) such arrangements are not for speculative purposes, and (ii) such Indebtedness shall be unsecured, except to the extent such Indebtedness constitutes part of the Obligations arising under or pursuant to Secured Hedge Agreements with any Bank Product Provider that are secured under the terms hereof;

 

(f)            Indebtedness in respect of netting services, cash management obligations, overdraft protections and otherwise in connection with deposit accounts and Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, that, such Indebtedness is extinguished within five (5) Business Days of incurrence;

 

(g)           Guaranty Obligations in respect of Indebtedness of a Borrower or Guarantor or any other Subsidiary of the Parent to the extent that such Indebtedness is otherwise permitted pursuant to this Section 10.3;

 

(h)           Indebtedness of Parent or any of its Subsidiaries in respect of bid, payment and performance bonds, workers’ compensation claims, unemployment insurance, health, disability and other employee benefits or property, casualty or liability insurance, or guarantees of the foregoing types of Indebtedness, in the ordinary course of business and consistent with current practices as of the date hereof; provided, that, upon Administrative Agent’s request, Administrative Agent shall have received true, correct and complete copies of all material agreements, documents or instruments evidencing or otherwise related to such Indebtedness, as duly authorized, executed and delivered by the parties thereto;

 

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(i)            Indebtedness arising after the date hereof from agreements of Parent or a Subsidiary to provide for customary indemnification, adjustment of purchase price or similar obligations, earn-outs or other similar obligations, in each case, incurred in connection with a Permitted Acquisition or Permitted Disposition other than guarantees of Indebtedness of any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisition or disposition;

 

(j)            Indebtedness not to exceed $355,000,0000 under (i) the Term Loan Agreement and (ii) Permitted Other Indebtedness and Specified Refinancing Indebtedness (as each such term is defined in the Term Loan Agreement);

 

(k)           unsecured Subordinated Debt of Borrowers and Guarantors or any of their respective Subsidiaries arising after the date hereof to any third person (but not to any other Borrower or Guarantor or other Affiliate of Parent), including Acquired Indebtedness, not otherwise permitted in this Section 10.3; provided, that, each of the following conditions is satisfied:

 

(i)            in the case of any such Indebtedness in excess of $5,000,000 or at any time after the aggregate amount of such Indebtedness incurred in any fiscal year exceeds $5,000,000 thereafter as to any such Indebtedness incurred in such fiscal year, Administrative Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention of such Borrower or Guarantor to incur such Indebtedness, which notice shall set forth in reasonable detail reasonably satisfactory to Administrative Agent the amount of such Indebtedness, the person or persons to whom such Indebtedness will be owed, the interest rate, the schedule of repayments and maturity date with respect thereto and such other information as Administrative Agent may reasonably request with respect thereto;

 

(ii)           such Indebtedness shall be on commercially reasonable terms and conditions;

 

(iii)          in the case of any such Indebtedness in excess of $5,000,000 or at any time after the aggregate amount of such Indebtedness incurred in any fiscal year exceeds $5,000,000 thereafter as to any such Indebtedness incurred in such fiscal year, Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Administrative Agent has received financial statements pursuant to Section 9.6 hereof;

 

(iv)          for any such Indebtedness in excess of $5,000,000, Administrative Agent shall have received, not less than ten (10) Business Days’ prior to incurring such Indebtedness, the Permitted Transaction Projections showing that: (i) the aggregate amount of the Excess Availability at all times during the period subject to such projections commencing after such Indebtedness is incurred, will be not less than $10,000,000 and (ii) the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is projected to be equal to or greater than 1.0 to 1.0 at all times during such period;

 

(v)           Administrative Agent shall have received true, correct and complete copies of all agreements, documents or instruments evidencing or otherwise related to such Indebtedness;

 

(vi)          the proceeds of such Indebtedness shall be used to finance Permitted Investments, Permitted Acquisitions, the payment of any Obligations or Obligations (as defined in the Term Loan Agreement) and the payment of fees and expenses in connection therewith;

 

(vii)         as of the date of incurring such Indebtedness and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing; and

 

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(viii)        such Indebtedness shall have a maturity date no sooner than ninety one (91) days after the Maturity Date and shall not be otherwise redeemable at the option of the holder prior to such date (other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default);

 

(l)            the Indebtedness set forth in the Information Certificate which is not otherwise permitted by the other clauses of this Section 10.3;

 

(m)          [Reserved];

 

(n)           [Reserved];

 

(o)           Acquired Indebtedness in an aggregate amount at any one time outstanding not to exceed the greater of $5,000,000 and 1% of Consolidated Total Assets at such time;

 

(p)           other unsecured Indebtedness in an aggregate amount at any one time outstanding not to exceed $20,000,000; and

 

(q)           Indebtedness of any Borrower or Guarantor or any of their respective Subsidiaries arising after the date hereof issued in exchange for, or the proceeds of which are used to extend, refinance, replace or substitute for Indebtedness permitted under Sections 10.3(b), (j) and (l) hereof (the “Refinancing Indebtedness”); provided, that, as to any such Refinancing Indebtedness, each of the following conditions is satisfied: (i) Administrative Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention to incur such Indebtedness, which notice shall set forth in reasonable detail reasonably satisfactory to Administrative Agent, the amount of such Indebtedness, the schedule of repayments and maturity date with respect thereto and such other information with respect thereto as Administrative Agent may reasonably request, (ii) promptly upon Administrative Agent’s request, Administrative Agent shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such Indebtedness, as duly authorized, executed and delivered by the parties thereto, (iii) the Refinancing Indebtedness shall have a Weighted Average Life to Maturity and a final maturity equal to or greater than the Weighted Average Life to Maturity and the final maturity, respectively, of the Indebtedness being extended, refinanced, replaced, or substituted for, (iv) the Refinancing Indebtedness shall rank in right of payment no more senior than, and be at least as subordinated (if subordinated) to, the Obligations as the Indebtedness being extended, refinanced, replaced or substituted for, (v) the Refinancing Indebtedness shall not include terms and conditions with respect to any Borrower or Guarantor which are more burdensome or restrictive in any material respect than those included in the Indebtedness so extended, refinanced, replaced or substituted for, taken as a whole, so that in view of all of the terms and conditions of the Refinancing Indebtedness, such terms and conditions are more favorable to such Borrower or Guarantor, (vi) as of the date of incurring such Indebtedness and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, (vii) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of the Indebtedness so extended, refinanced, replaced or substituted for (plus the amount of reasonable refinancing fees and expenses incurred in connection therewith outstanding on the date of such event), (viii) the Refinancing Indebtedness shall be secured by substantially the same assets, provided, that, such security interests (if any) with respect to the Refinancing Indebtedness shall have a priority no more senior than, and be at least as subordinated, if subordinated (on terms and conditions substantially similar to the subordination provisions applicable to the Indebtedness so extended, refinanced, replaced or substituted for or as is otherwise reasonably acceptable to Administrative Agent) as the security interest with respect to the Indebtedness so extended, refinanced, replaced or substituted for, and (ix) Borrowers and Guarantors may only make payments of principal, interest and fees, if any, in respect of such Indebtedness to the extent such payments would have been permitted hereunder in respect of the Indebtedness so extended, refinanced, replaced or substituted for.

 

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For purposes of determining any particular amount of Indebtedness hereunder, Guaranty Obligations in respect of the same Indebtedness otherwise included in the determination of such particular amount shall not be included. In the event that specific Indebtedness meets the criteria of more than one of the categories of Indebtedness described above or is otherwise permitted to be incurred hereunder, the Borrower Agent shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with such covenant.  Indebtedness permitted hereby need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions hereof permitting such Indebtedness.  Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Equity Interests in the form of additional shares of the same class of Disqualified Equity Interests, the classification of preferred stock as Indebtedness under GAAP and change in the amount outstanding due solely to the result of fluctuations in the exchange rates of currencies will not be deemed to be an incurrence of Indebtedness for purposes hereof.  For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.  The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.

 

10.4         Investments.  Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary immediately 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 any loans or advances to, or make or permit to exist any capital contribution or other 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 or all or a substantial part of the assets or property of any other Person (whether through purchase of assets, merger or otherwise), or form or acquire any Subsidiaries, or agree to do any of the foregoing (each of the foregoing an “Investment”), except:

 

(a)           Permitted Investments;

 

(b)           Permitted Acquisitions; and

 

(c)           the Investments consisting of loans and advances set forth on Schedule 10.4 to the Information Certificate which are not otherwise permitted by the other clauses of this Section 10.4.

 

10.5         Restricted Payments.  Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:

 

(a)           each Borrower and Guarantor, and each Subsidiary, may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person (other than Disqualified Equity Interests);

 

(b)           any Subsidiary of Parent may pay dividends or other distributions to a Borrower or Guarantor;

 

(c)           any Subsidiary of Parent may pay or make dividends or other distributions to CPG I or Parent the proceeds of which are used to make substantially contemporaneous payments to the AEA Group to the extent such payments are permitted pursuant to Section 10.5(d) below;

 

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(d)           Borrowers and Guarantors, and each Subsidiary, may pay in the aggregate (i) up to $1,500,000 each year to the AEA Group pursuant to the first paragraph of Section 2 of the Management Agreement (as in effect on the date hereof), (ii) any transactional fees payable to the AEA Group pursuant to such Management Agreement (as in effect on the date hereof) and (iii) reasonable expenses payable to the AEA Group pursuant to such Management Agreement (as in effect on the date hereof); provided, that, as of the date of any payment of such amounts under clauses (i) and (ii) and after giving effect thereto, (A) using the most recent calculation of the Borrowing Base prior to the date of any such Investment and payment, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than $10,000,000 and (B) no Default or Event of Default shall exist or have occurred and be continuing;

 

(e)           any Subsidiary of Parent may pay or make distributions to CPG I or Parent or any direct or indirect parent entity of Parent that are used to make substantially contemporaneous payments of any of the following (i) accounting, legal, administrative and other general corporate and overhead expenses, franchise or similar taxes and other fees required to maintain the corporate existence of CPG I or Parent or such direct or indirect parent entity and to pay other operating costs, including customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any such parent entity, in each case as to any of the foregoing only to the extent related to, and required for, the existence or operation of Parent or any of its Subsidiaries, and as are reasonably and in good faith allocable to the operation of Parent and its Subsidiaries (ii) reasonable directors fees and to reimburse reasonable out-of-pocket expenses of the board of directors of Parent and any direct or indirect parent entity of Parent, in each case in an amount not more than the portion of such fees and expenses as are reasonably and in good faith allocable to the operation of Parent and its Subsidiaries and (iii) fees and expenses, as incurred, of an offering of securities or indebtedness of Parent or CPG I that is not consummated, or of a registered public offering or of an acquisition which is not consummated;

 

(f)            any Subsidiary of Parent may pay or make distributions to Parent that are used to make substantially contemporaneous payments of any Permitted Tax Distributions and Parent may pay Permitted Tax Distributions to any direct or indirect parent entity of Parent;

 

(g)           any Subsidiary of Parent may pay or make distributions to Parent that are used to make substantially contemporaneous payments to, and Parent may make payments to, repurchase or redeem Equity Interests and options to purchase Equity Interests of Parent held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of Parent pursuant to any management equity subscription agreement, employee agreement or stock option agreement or other agreement with such officer, director or employee or former officer, director or employee; provided, that, the aggregate cash consideration paid for all such payments, repurchases or redemptions shall not in any fiscal year of Parent exceed the sum of: (i) $5,000,000 (or $10,000,000 after the IPO) plus an amount equal to the amount by which any such repurchases, redemptions or other payments not made pursuant to this clause (g) in the immediately preceding fiscal year of Parent are less than $5,000,000 (or $10,000,000 after the IPO); plus (ii) in the case of any such officer, director, employee or former officer, director or employee, an amount equal to the Net Cash Proceeds received by Parent of any resales or new issuances of Equity Interests of Parent, and options in respect of Equity Interests of Parent, to such any such officer, director, employee or former officer, director or employee at any time after the initial issuances thereof to such officer, director, employee or former officer, director or employee, together with the aggregate amount of deferred compensation due and owing by Parent or any of its Subsidiaries to such officer, director, employee or former officer, director or employee that is cancelled, waived or exchanged at any time after the initial issuances of any such Equity Interests and options for the grant to such officer, director, employee or former officer, director or employee of the right to receive or acquire other Equity Interests of Parent or CPG I, plus (iii) in the case of any such officer, director, employee or former officer, director or employee, an amount equal to the Net Cash Proceeds received by CPG I (whether directly or from

 

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Parent), of key man life insurance policies on the life of such officer, director, employee or former officer, director or employee that have been received by Parent or any of its Subsidiaries;

 

(h)           Borrowers and Guarantors, and each Subsidiary, may make payments to redeem the Equity Interests of Parent owned by Christopher Bardasian, Kevin Sloan and Larry Sloan as of the date hereof, provided, that, as to any such payment and after giving effect thereto, each of the following conditions is satisfied:  (i) the aggregate amount of all such payments shall not exceed $10,000,000 except as Administrative Agent may otherwise hereafter agree, (ii) using the most recent calculation of the Borrowing Base prior to the date of any such payment, on a pro forma basis, the aggregate amount of the Excess Availability shall not be less than $10,000,000 and (iii) as of the date of making any payment in respect of any such payment and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(i)            Borrowers and Guarantors and any of their respective Subsidiaries, may make other Restricted Payments not otherwise expressly provided for in this Section 10.5 in the case of any such Restricted Payments provided, that, each of the following conditions is satisfied:

 

(i)            in the case of any such Restricted Payment in excess of $2,500,000 or at any time that the aggregate amount of such Restricted Payments made in any fiscal year are in excess of $2,500,000, then as to all such Restricted Payments in such fiscal year thereafter, (A) Administrative Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention of such Borrower or Guarantor or Subsidiary to make such Restricted Payment, which notice shall set forth in reasonable detail reasonably satisfactory to Administrative Agent the amount of any such payments, the nature and purpose of such Restricted Payment, the date such payments are to be made and such other information as Administrative Agent may reasonably request with respect thereto, (B) Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Administrative Agent has received financial statements pursuant to Section 9.6 hereof, (C) for any such Restricted Payment in excess of $5,000,000, Administrative Agent shall have received, not less than ten (10) Business Days prior to the making of any such Restricted Payment, the Permitted Transaction Projections showing that: (1) the aggregate amount of the Excess Availability at all times during the period subject to such projections commencing after such Restricted Payment is made, will be not less than $10,000,000 and (2) the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is projected to be equal to or greater than 1.0 to 1.0 at all times during such period, (D) the daily average of the aggregate amount of the Excess Availability for the period of sixty (60) consecutive days immediately preceding the date of such payment shall not be less than $10,000,000, and as of the date of any such payment and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such payment, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than such amount, and (E) as of the date of making any payment in respect of any such redemption, retirement or repurchase and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(ii)           in the case of any such Restricted Payments that are equal to or less than $2,500,000 and so long as the aggregate amount of such Restricted Payments made in any fiscal year is equal to or less than $2,500,000, then as to all such Restricted Payments in such fiscal year (A) as of the date of any such Restricted Payment and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such sale or other disposition, on a pro forma basis, there shall be Excess Availability, and (B) as of the date of any such Restricted Payment, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

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(j)            Parent may pay dividend or redeem any of its Equity Interests out of (x) the Net Cash Proceeds of the IPO and (y) up to 6% per annum of the Net Cash Proceeds contributed to the common equity of the Parent from all subsequent public equity offerings;

 

(k)           Parent may pay any dividends or redeem any of its Equity Interests within sixty (60) days after the date of the declaration of such dividend or the mailing of such irrevocable redemption notice if the dividend or redemption payment, as the case may be, would have otherwise been permitted under the terms of this Section 10.5 on the date of such declaration or the date of the mailing of such notice; and

 

(l)            Parent may repurchase its Equity Interests to the extent such repurchase is deemed to occur upon (i) the non-cash exercise of stock options to the extent such Equity Interests represents a portion of the exercise price of such options and (ii) the withholding of a portion of such Equity Interests to pay taxes associated therewith, and the purchase of fractional shares of Equity Interests of Parent or any Subsidiary arising out of stock dividends, splits or combinations or business combinations.

 

10.6         Transactions with Affiliates.  Each Borrower and Guarantor shall not, directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, any officer, director or other Affiliates of such Borrower or Guarantor, except pursuant to the reasonable requirements of such Borrower’s or Guarantor’s business (as the case may be) and upon fair and reasonable terms no less favorable to such Borrower or Guarantor than such Borrower or Guarantor would obtain in a comparable arm’s length transaction with an unaffiliated person, except for the following:

 

(a)           any employment or compensation arrangement or agreement, employee benefit plan or arrangement, officer or director indemnification agreement or any similar arrangement or other compensation arrangement entered into by Parent or any of its Subsidiaries in the ordinary course of business and payments, issuance of securities or awards pursuant thereto, and including the grant of stock options, restricted stock, stock appreciation rights, phantom stock awards or similar rights to employees and directors in each case approved by the Board of Directors of such Borrower or Guarantor;

 

(b)           transactions exclusively between or among Parent and any of its Subsidiaries or exclusively between or among such Subsidiaries (including any Person that becomes a Subsidiary as a result of such transaction), provided that such transactions are not otherwise prohibited by this Agreement;

 

(c)           to the extent permitted under Section 10.5(d) hereof, up to $1,500,000 each year to the AEA Group pursuant to the first paragraph of Section 2 of the Management Agreement (as in effect on the date hereof), (B) any transactional fees payable to the AEA Group pursuant to such Management Agreement (as in effect on the date hereof) and (C) reasonable expenses payable to the AEA Group pursuant to such Management Agreement (as in effect on the date hereof);

 

(d)           Restricted Payments permitted under Section 10.5 hereof; and

 

(e)           loans and investments permitted under clauses (g) and (j) of the definition of Permitted Investments;

 

(f)            the issuance of Qualified Equity Interests to Affiliates to the extent such issuance is permitted under clause (g) of the definition of Permitted Dispositions;

 

(g)           any merger or consolidation of Parent or its Subsidiaries with Affiliates of Parent or such Subsidiaries (i) to the extent permitted under Section 10.1(a), solely for the purpose of reorganizing to facilitate an initial public offering of securities of Parent or any direct or indirect parent entity of Parent or

 

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(ii) to the extent permitted under Section 9.1, solely to reincorporate the Parent or such Subsidiary in a new jurisdiction;

 

(h)           transactions pursuant to or contemplated by the Partnership Agreement as in effect on the date hereof; and

 

(i)            the transactions set forth in Schedule 10.6 of the Information Certificate.

 

10.7         Change in Business.  Each Borrower and Guarantor shall not engage in any business other than the business of such Borrower or Guarantor on the date hereof and any business reasonably related, ancillary or complimentary to the business in which such Borrower or Guarantor is engaged on the date hereof.

 

10.8         Limitation of Restrictions Affecting Subsidiaries.  Each Borrower and Guarantor shall not, directly, or indirectly, create or otherwise cause or suffer to exist any encumbrance or restriction which prohibits or limits the ability of any Subsidiary of such Borrower or Guarantor to (a) pay dividends or make other distributions or pay any Indebtedness owed to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (b) make loans or advances to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (c) transfer any of its properties or assets to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor and (d) grant liens and security interests to secure the Obligations; except for encumbrances and restrictions arising under (i) applicable law, rule, regulation or order, including of any regulatory body, (ii) this Agreement, the other Financing Agreements, the Term Loan Agreement or an agreement governing any other Indebtedness permitted hereby provided that, with respect to any agreement governing such other Indebtedness, the provisions relating to such encumbrance or restriction are no less favorable to the Parent and its Subsidiaries in any material respect, taken as a whole, than the provisions contained in this Agreement as in effect on the date hereof, (iii) customary provisions restricting subletting or assignment of (A) any lease governing a leasehold interest of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor or (B) any contracts and licenses (including, without limitation, those relating to intellectual property), in each case entered into in the ordinary course of business, (iv) customary restrictions on real property interests found in easement agreements of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (v) any agreement relating to permitted Indebtedness incurred by, or Equity Interests of, a Subsidiary of such Borrower or such Guarantor prior to the date on which such Subsidiary was acquired by such Borrower or Guarantor and outstanding on such acquisition date, (vi) restrictions on the transfer of assets subject to any Lien permitted hereunder imposed by the holder of such Lien, (vii) restrictions imposed by any agreement to sell assets or Equity Interests permitted hereunder to any Person pending the closing of such sale, (viii) purchase money Indebtedness or Capitalized Lease Obligations permitted to be incurred hereunder that impose restrictions on the property purchased or leased, (ix) provisions in joint venture agreements, partnership agreements, limited liability company organizational governance documents, asset sale and stock sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements that restrict the transfer of ownership interests in such entity, (x) restrictions on cash or other deposits or net worth imposed by customers or suppliers under contracts entered into in the ordinary course of business, (xi) encumbrances pursuant to the subordination provisions of any Indebtedness permitted to be incurred hereunder, (xii) encumbrances on the assets or capital stock of Foreign Subsidiaries pursuant to Indebtedness of Foreign Subsidiaries permitted to be incurred hereunder that are not expected to make the Borrowers unable to make principal or interest payments hereunder, as determined in good faith by the Borrower Agent, and (xiii) agreements existing on the date hereof and amendments, restatements, modifications, renewals, supplements, refundings, replacements, refinancings, extensions or continuations of contracts, instruments or contractual obligations in existence on the date hereof or those referred to above; provided, that, any such encumbrances or restrictions contained in such extension or continuation are no less favorable to the Parent and Subsidiaries than those

 

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encumbrances and restrictions under or pursuant to the contracts, instruments or contractual obligations so extended or continued.

 

10.9         Certain Payments of Indebtedness, Etc.  Borrowers and Guarantors shall not, and shall not permit any Subsidiary to, make or agree to make any payment, prepayment, redemption, retirement, defeasance, purchase or sinking fund payment or other acquisition for value of any of its Indebtedness other than the Indebtedness under the Financing Agreements (including, without limitation, by way of depositing money or securities with the trustee therefor before the date required for the purpose of paying any portion of such Indebtedness when due), or otherwise set aside or deposit or invest any sums for such purpose, except  that:

 

(a)           any Borrower or Guarantor or any of their respective Subsidiaries may make (i) regularly scheduled payments of principal and interest in respect of Indebtedness evidenced by the Senior Fixed Rate Notes and the Senior Floating Rate Notes, (ii) regularly scheduled payments of principal and interest and mandatory prepayments and optional prepayments in respect of the Term Loans and (iii) regularly scheduled payments of principal and interest and mandatory prepayments and optional prepayments in respect of the Specified Refinancing Indebtedness (as defined in the Term Loan Agreement) and the Permitted Other Indebtedness (as defined in the Term Loan Agreement), in each case to the extent that the obligations under such Indebtedness are secured on a pari passu basis with the Obligations (as defined in the Term Loan Agreement);

 

(b)           any Borrower, or Guarantor or any of their respective Subsidiaries may make prepayments or redemptions (other than as described above) of any other Indebtedness permitted to be incurred under Section 10.3; provided, that, as to any such prepayment or redemption, each of the following conditions is satisfied:

 

(i)            in the case of any such prepayments or redemptions in excess of $2,500,000 or at any time that the aggregate amount of such prepayments or redemptions made in any fiscal year are in excess of $2,500,000 then as to all such prepayments or redemptions in such fiscal year thereafter, (A) Administrative Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention of a Borrower or Guarantor or any of their respective Subsidiaries to make such prepayment or redemption, (B) Administrative Agent shall have received a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is equal to or greater than 1.0 to 1.0 as of the most recent fiscal month end for which Administrative Agent has received financial statements pursuant to Section 9.6 hereof, (C) for any such prepayment or redemption in excess of $5,000,000, Administrative Agent shall have received, not less than ten (10) Business Days prior to the making of such prepayment or redemption, the Permitted Transaction Projections showing that: (1) the aggregate amount of the Excess Availability at all times during the period subject to such projections, commencing after such prepayment or redemption is made, will be not less than $10,000,000 and (2) the Fixed Charge Coverage Ratio for Parent and its Subsidiaries is projected to be equal to or greater than 1.0 to 1.0 at all times during such period, (D) the daily average of the aggregate amount of the Excess Availability for the period of sixty (60) consecutive days immediately preceding the date of such prepayment or redemption shall not be less than $10,000,000, and as of the date of any such prepayment or redemption and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such prepayment or redemption, on a pro forma basis, the aggregate amount of the Excess Availability shall be not less than such amount, and (E) as of the date of any such prepayment or redemption, and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing; and

 

(ii)           in the case of any such prepayments or redemptions that are equal to or less than $2,500,000 and so long as the aggregate amount of such prepayments or redemptions made in any fiscal year is equal to or less than $2,500,000, then as to all such prepayments or redemptions in such fiscal year,

 

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(A) as of the date of such prepayment or redemption and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such sale or other disposition, on a pro forma basis, there shall be Excess Availability and (B) as of the date of any such prepayment or redemption, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

 

(c)           Borrowers and Guarantors and their respective Subsidiaries may consummate the Refinancing Transactions;

 

(d)           Borrowers and Guarantors and their respective Subsidiaries may make payments in respect of Indebtedness owing by them in exchange for issuance of Qualified Equity Interests of Parent permitted hereunder or with Net Cash Proceeds from the sale of Qualified Equity Interests of Parent;

 

(e)           Borrowers and Guarantors and their respective Subsidiaries may make payments in respect of Indebtedness permitted under Sections 10.3(b), (j) and (l), in each case with proceeds of Refinancing Indebtedness as permitted under Section 10.3(q); and

 

(f)            as to payments in respect of any other Indebtedness permitted under Section 10.3 hereof not subject to the provisions above in this Section 10.9, Borrowers and Guarantors and their respective Subsidiaries may make payments of regularly scheduled principal and interest or other mandatory payments as and when due in respect of such Indebtedness in accordance with the terms thereof (and in the case of Subordinated Debt, subject to the terms of subordination set forth therein or applicable thereto).

 

10.10       Modifications of Indebtedness, Organizational Documents and Certain Other Agreements.  Borrowers and Guarantors shall not, and shall not permit any Subsidiary to:

 

(a)           amend, modify or otherwise change the Management Agreement or its certificate of incorporation, articles of association, certificate of formation, limited liability agreement, limited partnership agreement or other organizational documents, as applicable, including, without limitation, entering into any new agreement with respect to any of its Equity Interests, except for amendments, modifications or other changes that (i) do not affect the ability of a Borrower, a Guarantor or such Subsidiary to amend, modify, renew or supplement the terms of this Agreement or any of the other Financing Agreements and (ii) are not materially adverse to the interests of Agents or Lenders;

 

(b)           amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) any of the provisions of any agreements, documents or instruments in respect of any Subordinated Debt or any agreements related to the Indebtedness permitted under Section 10.3(j) (except to the extent permitted under the Intercreditor Agreement) or, in respect of any Permitted Other Indebtedness or Specified Refinancing Indebtedness (as each such term is defined in the Term Loan Agreement) (except to the extent permitted under the applicable intercreditor agreement entered into in respect such Permitted Other Indebtedness or Specified Refinancing Indebtedness), except, that, Borrowers and Guarantors, and any Subsidiary, may amend, modify, alter or change the terms thereof to forgive, or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or to make the terms thereof less restrictive or burdensome to Borrowers, Guarantors or such Subsidiary or make any other amendment or modification of such Indebtedness that is not materially adverse to the interests of Agents or Lenders (it being understood and agreed that any amendment, modification, alteration or other change to the subordination provisions of any Subordinated Debt shall be deemed materially adverse to the interests of Agents and the Lenders).

 

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10.11       Inactive Subsidiaries; Parent Holding Company.

 

(a)           Except as otherwise provided in Section 10.11(b) below, Borrowers and Guarantors and their respective Subsidiaries will not permit any Inactive Subsidiary to (i) engage in any business or conduct any operations, (ii) own assets with a book value of more than $100,000 in the aggregate and (iii) incur any obligations or liabilities in respect of any Indebtedness or otherwise.

 

(b)           In the event that a Borrower or Guarantor or their respective Subsidiaries intends to have any then Inactive Subsidiary commence any business or operations or own assets with a book value of more than $100,000 in the aggregate or incur any obligations or liabilities in respect of any Indebtedness or otherwise, (i) Borrowers and Guarantors shall give Agents not less than ten (10) Business Days’ prior written notice thereof with reasonable detail and specificity and such other information with respect thereto as Agents may reasonably request and (ii) at any time thereafter, promptly upon the request of Agents, Borrowers and Guarantors shall cause such Inactive Subsidiary to execute and deliver to Agents, in form and substance reasonably satisfactory to Agents, a joinder agreement to the Financing Agreements in order to, among other  things, make such Subsidiary a party to this Agreement as a “Guarantor” and a party to any guarantee as a “Guarantor” or pledge agreement as a “Pledgor”, and without limitation, supplements and amendments hereto and to any of the other Financing Agreements, authorization to file UCC financing statements, Collateral Access Agreements (to the extent required under Section 9.2 hereof), other agreements, documents or instruments contemplated under Section 5.3 hereof and other consents, waivers, acknowledgments and other agreements from third persons which Agents may deem reasonably necessary or desirable in order to permit, protect and perfect Collateral Agent’s security interests in and liens upon the assets of such Subsidiary, corporate resolutions and other organization and authorizing documents of such Person, and favorable opinions of counsel to such person; provided, that such Inactive Subsidiary is not a Foreign Subsidiary and (iii) upon the reasonable satisfaction of each of the conditions set forth in this Section 10.11(b), such Inactive Subsidiary shall cease to be deemed an Inactive Subsidiary for purposes of this Agreement.

 

(c)           Except for any Guaranty Obligations in respect of Indebtedness incurred pursuant to Section 10.3 by its Subsidiaries and as otherwise provided in Sections 10.3(d), 10.3(f), 10.3(g), 10.3(h), 10.3(i), 10.3(j) and 10.3(k) through (p), Parent shall not incur any Indebtedness nor grant any security interests, liens or other encumbrances (other than Permitted Liens) upon any of its properties or assets nor engage in any operations, business or activity other than holding one hundred (100%) percent of the Equity Interests of CPG I and each of any administrative, management or other activities incidental to such holdings, pledging its interests therein to Collateral Agent and executing and delivering the Financing Agreements to which it is a party and fulfilling its obligations thereunder.  Nothing contained herein shall prevent Parent from (i) the consummation of the IPO or any other public offering of its common stock or any other issuance or sale of its Equity Interests (other than Disqualified Equity Interests), (ii) the payment of dividends to the extent permitted under this Agreement, making contributions to the capital of the Borrowers, Guarantors or their respective Subsidiaries, (iii) participating in tax, accounting and other administrative matters as a member of the consolidated group of Parent and the Subsidiaries, (iv) holding any cash, (v) providing indemnification to officers, managers and directors, (vi) activities incidental to compliance with the provisions of the Securities Act and the Exchange Act and the rules of national securities exchanges, in each case, as applicable to companies with listed equity or debt securities, as well as activities incidental to investor relations, shareholder meetings and reports to shareholders or debt holders and (vii) any activities incidental to the foregoing.

 

10.12       Sale and Leasebacks.  Borrowers and Guarantors shall not, and shall not permit and of their respective Subsidiaries to, enter into any Sale and Leaseback Transaction, unless the sale of such property is permitted under Section 10.1 hereof , the leaseback of such property gives rise to Indebtedness permitted under Section 10.3 hereof and any lien or security interest granted pursuant thereto is permitted under Section 10.2 hereof.

 

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10.13       Designation of Designated Senior Debt.  Borrowers and Guarantors shall, and shall cause any Subsidiary to, designate the Obligations as “Designated Senior Debt” or any similar term under and as defined in the agreements relating to any Indebtedness (including any Subordinated Debt) of any Borrower or Guarantor which contains such designation.

 

10.14       Foreign Assets Control Regulations, Etc.  None of the requesting or borrowing of the Loans or the requesting or issuance, extension or renewal of any Letter of Credit or the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. §1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any enabling legislation or executive order relating thereto (including, but not limited to (a) Executive order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).  None of Borrowers, Guarantors or any of their respective Subsidiaries or other Affiliates is or will become a “Sanctioned Entity” or “Sanctioned Person” as described in the Executive Order, the Trading with the Enemy Act or the Foreign Assets Control Regulations or  engages or will engage in any dealings or transactions, or be otherwise associated, with any such Sanctioned Entity or Sanctioned Person.

 

SECTION 11.                                             FINANCIAL COVENANT

 

11.1         Fixed Charge Coverage Ratio.  At any time that Excess Availability is less than $7,500,000 and at all times thereafter (except as otherwise provided below), the Fixed Charge Coverage Ratio of Parent and its Subsidiaries (on a consolidated basis) determined as of the end of the fiscal month most recently ended for which Administrative Agent has received financial statements shall be not less than 1.0 to 1.0 for the period of the immediately preceding twelve (12) consecutive fiscal months prior to such fiscal month end; provided, that, if, at any time after Excess Availability shall be less than $7,500,000, then Excess Availability shall be greater than $7,500,000 for ninety (90) consecutive days, Parent and its Subsidiaries shall not thereafter be required to comply with the Fixed Charge Coverage Ratio as set forth above up to two (2) times in any twelve (12) consecutive month period until such time as Excess Availability shall again be less than $7,500,000, except if after the second time in such period, Excess Availability has been greater than such amount for each day of any one hundred twenty (120) consecutive day period thereafter, then Parent and its Subsidiaries shall not thereafter be required to comply with the Fixed Charge Coverage Ratio as set forth above until the next time that Excess Availability shall be less than $7,500,000.

 

11.2         Cure Rights.  For purposes of determining satisfaction with the foregoing Fixed Charge Coverage Ratio under this Section 11.1, any Specified Equity Contribution made during the period from the last day of the relevant period until the expiration of the 10th day after the date on which financial statements are required to be delivered hereunder with respect to the relevant period will, at the request of the Borrower Agent, be included in the calculation of Consolidated EBITDA for any period of calculation which includes the month in which such Specified Equity Contribution was received by the Borrowers, provided that (A) in each four fiscal quarter period, there shall be a period of at least two consecutive fiscal quarters in respect of which no Specified Equity Contribution is made, (B) no more than four Specified Equity Contributions shall be made, (C) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrowers and the Guarantors to be in compliance with the Fixed Charge Coverage Ratio specified above on a Pro Forma Basis, and in any event no greater than $10,000,000 for any one Specified Equity Contribution and (D) all Specified Equity Contributions shall be disregarded for all other purposes of this Agreement, including for purposes of determining the amount or availability of any baskets with respect to the covenants contained herein.

 

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SECTION 12.                                             EVENTS OF DEFAULT AND REMEDIES

 

12.1         Events of Default.  The occurrence or existence of any one or more of the following events are referred to herein individually as an “Event of Default”, and collectively as “Events of Default”:

 

(a)           (i) any Borrower fails to make any principal payment hereunder when due or fails to pay interest, fees or any of the other Obligations within three (3) Business Days after the due date thereof, or (ii) any Borrower or Guarantor fails to perform any of the covenants contained in Sections 2.3, 2.7, 2.8, 3, 5, 6.9, 7, 9.5, 9.6, 10 and 11, or (iii) any Borrower or Guarantor fails to perform any of the terms, covenants, conditions or provisions contained in this Agreement or any of the other Financing Agreements other than those described in Sections 12.1(a)(i) and 12.1(a)(ii) above and such failure shall continue for thirty (30) days after the notice thereof from the Required Lenders or Administrative Agent; provided, that, such thirty (30) day period shall not apply in the case of any failure to observe any such covenant which is not capable of being cured at all or within such thirty (30) day period or which has been the subject of a prior failure within a six (6) month period;

 

(b)           any representation, warranty or statement of fact made by any Borrower or Guarantor to an Agent in this Agreement, the other Financing Agreements or any other written agreement, schedule, confirmatory assignment or otherwise that are qualified as to materiality or Material Adverse Effect shall when made or deemed made be incorrect, false or misleading and any other such representation, warranty or statement of fact made by any Borrower or Guarantor to an Agent shall when made or deemed made be incorrect, false or misleading in any material respect;

 

(c)           any Guarantor revokes or terminates or purports to revoke or terminate any guarantee of such party in favor of an Agent or any Lender, except as a result of a transaction permitted under Section 10.1 hereof;

 

(d)           any judgment for the payment of money is rendered against any Borrower or Guarantor in excess of $7,000,000 in the aggregate (to the extent not covered by independent third party insurance where the insurer has not declined or disputed coverage) and shall remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at any time not be effectively stayed, or any judgment other than for the payment of money, or injunction, attachment, garnishment or execution is rendered against any Borrower or Guarantor or any material portion of the Collateral;

 

(e)           any Borrower or Guarantor makes an assignment for the benefit of creditors or makes or sends notice of a bulk transfer;

 

(f)            a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at law or in equity) is filed against any Borrower or Guarantor other than the Inactive Subsidiaries or all or any part of its properties and such petition or application is not dismissed within sixty (60) days after the date of its filing or any Borrower or Guarantor other than the Inactive Subsidiaries  shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of, any such action or proceeding or the relief requested is granted sooner;

 

(g)           a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or equity) is filed by any Borrower or Guarantor (other than the Inactive Subsidiaries) or for all or any part of its property;

 

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(h)           any default in respect of any Indebtedness of any Borrower or Guarantor in any case in a principal amount (or, in the case of a revolving credit facility, a commitment amount) in excess of $7,000,000  (including Subordinated Debt or any Indebtedness evidenced by or arising under the Term Loan Agreement or the Senior Note Documents), which default continues for more than the applicable cure period, if any, with respect thereto, including any default by any Borrower or Guarantor under any Material Contract, which default continues for more than the applicable cure period, if any, with respect thereto and/or is not waived in writing by the other parties thereto or the subordination provisions contained in any agreement related to any Subordinated Debt shall cease to be in full force and effect or to give Agents or Lenders the rights, powers and privileges purported to be created thereby;

 

(i)            any material provision hereof or of any of the other Financing Agreements shall for any reason cease to be valid, binding and enforceable with respect to any party hereto or thereto (other than an Agent) in accordance with its terms, or any such party shall challenge the enforceability hereof or thereof, or shall assert in writing, or take any action or fail to take any action based on the assertion that any provision hereof or of any of the other Financing Agreements has ceased to be or is otherwise not valid, binding or enforceable in accordance with its terms, or any security interest provided for herein or in any of the other Financing Agreements shall cease to be a valid and perfected first priority security interest in any of the Collateral purported to be subject thereto (except as otherwise permitted herein or therein);

 

(j)            an ERISA Event shall occur which results in or could reasonably be expected to result in liability of any Borrower or any Guarantor in an aggregate amount in excess of $7,000,000;

 

(k)           any Borrower or Guarantor shall be prohibited or otherwise restrained from conducting the business theretofore conducted by it in any manner that has or could reasonably be expected to result in a Material Adverse Effect by virtue of any determination, ruling, decision, decree or order of any court or Governmental Authority of competent jurisdiction;

 

(l)            the Indebtedness under any Subordinated Debt in an amount in excess of $7,000,000 shall cease (or any Borrower, Guarantor or any of their respective Affiliates shall so assert), for any reason, to be validly subordinated to the Obligations as provided in the agreements evidencing such Subordinated Debt; or

 

(m)          any Change of Control.

 

12.2         Remedies.

 

(a)           At any time an Event of Default exists or has occurred and is continuing, Agents and Lenders shall have all rights and remedies provided in this Agreement, the other Financing Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised without notice to or consent by any Borrower or Guarantor, except as such notice or consent is expressly provided for hereunder or required by applicable law.  All rights, remedies and powers granted to Agents and Lenders hereunder, under any of the other Financing Agreements, the UCC or other applicable law, are cumulative, not exclusive and enforceable, in Agents’ discretion, alternatively, successively, or concurrently on any one or more occasions, and shall include, without limitation, the right to apply to a court of equity for an injunction to restrain a breach or threatened breach by any Borrower or Guarantor of this Agreement or any of the other Financing Agreements.  Subject to Section 14 hereof, Agents may, and at the direction of the Required Lenders shall, at any time or times an Event of Default exists or has occurred and is continuing, proceed directly against any Borrower or Guarantor to collect the Obligations without prior recourse to the Collateral.

 

(b)           Without limiting the generality of the foregoing, at any time an Event of Default exists or has occurred and is continuing, Administrative Agent may, at its option and shall upon the direction 

 

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of the Required Lenders, (i) upon notice to Borrower Agent, accelerate the payment of all Obligations and demand immediate payment thereof to Administrative Agent for itself and the benefit of Lenders (provided, that, upon the occurrence of any Event of Default described in Sections 12.1(f) and 12.1(g), all Obligations shall automatically become immediately due and payable), and (ii) terminate the Commitments whereupon the obligation of each Lender to make any Loan and an Issuing Bank to issue any Letter of Credit shall immediately terminate (provided, that, upon the occurrence of any Event of Default described in Sections 12.1(f) and 12.1(g), the Commitments and any other obligation of an Agent or a Lender or Issuing Bank hereunder shall automatically terminate).

 

(c)           Without limiting the foregoing, at any time an Event of Default exists or has occurred and is continuing and only at such time or times, Collateral Agent may, in its discretion (i) with or without judicial process or the aid or assistance of others, enter upon any premises on or in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturing and repair of all or any portion of the Collateral, (ii) require any Borrower or Guarantor, at Borrowers’ expense, to assemble and make available to Collateral Agent any part or all of the Collateral at any place and time designated by Collateral Agent, (iii) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral, (iv) remove any or all of the Collateral from any premises on or in which the same may be located for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose, (v) sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral (including entering into contracts with respect thereto, public or private sales at any exchange, broker’s board, at any office of Collateral Agent or elsewhere) at such prices or terms as Collateral Agent may deem reasonable, for cash, upon credit or for future delivery, with the Agents having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoing being free from any right or equity of redemption of any Borrower or Guarantor, which right or equity of redemption is hereby expressly waived and released by Borrowers and Guarantors and/or (vi) terminate this Agreement.  If any of the Collateral is sold or leased by Collateral Agent upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof until payment therefor is finally collected by Collateral Agent.  If notice of disposition of Collateral is required by law, ten (10) days prior notice by Collateral Agent to Borrower Agent designating the time and place of any public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof and, subject to applicable law, Borrowers and Guarantors waive any other notice.  In the event Collateral Agent institutes an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower and Guarantor waives the posting of any bond which might otherwise be required.  At any time an Event of Default exists or has occurred and is continuing, upon Administrative Agent’s request, Borrowers will either, as Administrative Agent shall specify, furnish cash collateral to each Issuing Bank to be used to secure and fund the reimbursement obligations to such Issuing Bank in connection with any Letter of Credit Obligations or furnish cash collateral to Collateral Agent for the Letter of Credit Obligations.  Such cash collateral shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations and any such cash collateral then in possession of Collateral Agent (and not applied or to be applied to any of the Letter of Credit Obligations) shall be returned to Borrower Agent, upon its written request, within ten (10) Business Days after the end of the latest expiration date of the Letters of Credit giving rise to such Letter of Credit Obligations (so long as Administrative Agent have received evidence reasonably satisfactory to it and the Issuing Bank that no unpaid draw has been made under the Letters of Credit prior to its expiration).

 

(d)           At any time or times that an Event of Default exists or has occurred and is continuing, Collateral Agent may, in its discretion, enforce the rights of any Borrower or Guarantor against any account debtor, secondary obligor or other obligor in respect of any of the Accounts or other Receivables.  Without limiting the generality of the foregoing, Collateral Agent may, in its discretion, at such time or times (i) notify any or all account debtors, secondary obligors or other obligors in respect thereof that the Receivables have been assigned to Collateral Agent and that Collateral Agent has a security interest therein and Collateral Agent may direct any or all account debtors, secondary obligors and other obligors to 

 

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make payment of Receivables directly to Collateral Agent, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of merchandise or otherwise, and upon any terms or conditions, any and all Receivables or other obligations included in the Collateral and thereby discharge or release the account debtor or any secondary obligors or other obligors in respect thereof without affecting any of the Obligations, (iii) demand, collect or enforce payment of any Receivables or such other obligations, but without any duty to do so, and Agents and Lenders shall not be liable for any failure to collect or enforce the payment thereof nor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action Collateral Agent may deem necessary or desirable for the protection of its interests and the interests of the other Secured Parties.  At any time that an Event of Default exists or has occurred and is continuing, at Agents’ request, all invoices and statements sent to any account debtor shall state that the Accounts and such other obligations have been assigned to Collateral Agent and are payable directly and only to Collateral Agent and Borrowers and Guarantors shall deliver to Collateral Agent such originals of documents evidencing the sale and delivery of goods or the performance of services giving rise to any Accounts as Agents may require.  In the event any account debtor returns Inventory when an Event of Default exists or has occurred and is continuing, Borrowers and Guarantors shall, upon Agents’ request, hold the returned Inventory in trust for Collateral Agent, segregate all returned Inventory from all of its other property, dispose of the returned Inventory solely according to Collateral Agent’s instructions, and not issue any credits, discounts or allowances with respect thereto without Agents’ prior written consent.

 

(e)           To the extent that applicable law imposes duties on an Agent or any Lender to exercise remedies in a commercially reasonable manner (which duties cannot be waived under such law), each Borrower and Guarantor acknowledges and agrees that it is not commercially unreasonable for an Agent or any Lender (i) to fail to incur expenses reasonably deemed significant by an Agent or any Lender to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain consents of any Governmental Authority or other third party for the collection or disposition of Collateral to be collected or disposed of,  (iii) to fail to exercise collection remedies against account debtors, secondary obligors or other persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same business as any Borrower or Guarantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure Agents or Lenders against risks of loss, collection or disposition of Collateral or to provide to Agents or Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Agents, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Collateral Agent in the collection or disposition of any of the Collateral.  Each Borrower and Guarantor acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by an Agent or any Lender would not be commercially unreasonable in the exercise by an Agent or any Lender of remedies against the Collateral and that other actions or omissions by an Agent or any Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this Section.  Without limitation of the foregoing, nothing contained in this Section shall be construed to grant any rights to any Borrower or Guarantor or to impose any duties on Agents or Lenders that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.

 

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(f)            For the purpose of enabling Collateral Agent to exercise the rights and remedies hereunder, each Borrower and Guarantor hereby grants to Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable at any time an Event of Default shall exist or have occurred and for so long as the same is continuing and only at such time or times) without payment of royalty or other compensation to any Borrower or Guarantor, to use, assign, license or sublicense any of the trademarks, service-marks, trade names, business names, trade styles, designs, logos and other source of business identifiers and other Intellectual Property and general intangibles now owned or hereafter acquired by any Borrower or Guarantor, wherever the same maybe located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.

 

(g)           At any time an Event of Default exists or has occurred and is continuing, Collateral Agent may apply the cash proceeds of Collateral actually received by Collateral Agent from any sale, lease, foreclosure or other disposition of the Collateral to payment of the Obligations, in whole or in part and in accordance with the terms hereof, whether or not then due or may hold such proceeds as cash collateral for the Obligations.  Borrowers and Guarantors shall remain liable to Agents and Lenders for the payment of any deficiency with interest at the highest rate provided for herein and all costs and expenses of collection or enforcement, including attorneys’ fees and expenses.

 

(h)           Without limiting the foregoing, upon the occurrence of a Default or an Event of Default, (i) Agents and Lenders may, at Administrative Agent’s option, and upon the occurrence of an Event of Default at the direction of the Required Lenders, Agents and Lenders shall, without notice, (A) cease making Loans or arranging for Letters of Credit or reduce the lending formulas or amounts of Loans and Letters of Credit available to Borrowers and/or (B) in the case of an Event of Default, terminate any provision of this Agreement providing for any future Loans to be made by Agents and Lenders or Letters of Credit to be issued by an Issuing Bank and (ii) Agents may, at their option, establish such Reserves as Agents determine, without limitation or restriction, notwithstanding anything to the contrary contained herein.

 

SECTION 13.                                             JURY TRIAL WAIVER; OTHER WAIVERS; CONSENTS; GOVERNING LAW

 

13.1         Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

 

(a)           The validity, interpretation and enforcement of this Agreement and the other Financing Agreements (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

 

(b)           Borrowers, Guarantors, Agents, Lenders and each Issuing Bank irrevocably consent and submit to the exclusive jurisdiction of the of the Supreme Court of the State of New York, New York County and the United States District Court for the Southern District of New York and any appellate court from any thereof, whichever Administrative Agent may elect, and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters shall be heard only in the courts described above (except that Agents and Lenders shall have the right to bring any action or proceeding against any Borrower or Guarantor or its or their property in the courts of any other jurisdiction which Administrative Agent deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against any Borrower or Guarantor or its or their property).

 

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(c)           Each Borrower and Guarantor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at Administrative Agent’s option, by service upon any Borrower or Guarantor (or Borrower Agent on behalf of such Borrower or Guarantor) in any other manner provided under the rules of any such courts.  Within thirty (30) days after such service, such Borrower or Guarantor shall appear in answer to such process, failing which such Borrower or Guarantor shall be deemed in default and judgment may be entered by Administrative Agent against such Borrower or Guarantor for the amount of the claim and other relief requested.

 

(d)           BORROWERS, GUARANTORS, AGENTS, LENDERS AND EACH ISSUING BANK EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  BORROWERS, GUARANTORS, AGENTS, LENDERS AND ANY ISSUING BANK EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, ANY AGENT, ANY LENDER OR ISSUING BANK MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

(e)           Agents and other Secured Parties shall not have any liability to any Borrower or Guarantor (whether in tort, contract, equity or otherwise) for losses suffered by such Borrower or Guarantor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order binding on Agents, such Lender and Issuing Bank, that the losses were the result of acts or omissions constituting gross negligence or willful misconduct.  Each Borrower and Guarantor:  (i) certifies that no Agent, Lender, Issuing Bank or any representative, agent or attorney acting for or on behalf of an Agent, any Lender or Issuing Bank has represented, expressly or otherwise, that Agents, Lenders and each Issuing Bank would not, in the event of litigation, seek to enforce any of the waivers provided for in this Agreement or any of the other Financing Agreements and (ii) acknowledges that in entering into this Agreement and the other Financing Agreements, Agents, Lenders and each Issuing Bank are relying upon, among other things, the waivers and certifications set forth in this Section 13.1 and elsewhere herein and therein.

 

13.2         Waiver of Notices.  Each Borrower and Guarantor hereby expressly waives demand, presentment, protest and notice of protest and notice of dishonor with respect to any and all instruments and chattel paper, included in or evidencing any of the Obligations or the Collateral, and any and all other demands and notices of any kind or nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such as are expressly provided for herein or required by applicable law and cannot be waived thereunder.  No notice to or demand on any Borrower or Guarantor which an Agent or any Lender may elect to give shall entitle such Borrower or Guarantor to any other or further notice or demand in the same, similar or other circumstances.

 

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13.3         Amendments and Waivers.

 

(a)           Neither this Agreement nor any other Financing Agreement nor any terms hereof or thereof may be amended, waived, discharged or terminated unless such amendment, waiver, discharge or termination is in writing signed by the Administrative Agent, the Collateral Agent and the Required Lenders or at Administrative Agent’s option, by Administrative Agent with the authorization or consent of the Collateral Agent and the Required Lenders, and as to amendments to any of the Financing Agreements (other than with respect to any provision of Section 14 hereof), by any Borrower and such amendment, waiver, discharger or termination shall be effective and binding as to all Lenders and each Issuing Bank only in the specific instance and for the specific purpose for which given; except, that, no such amendment, waiver, discharge or termination shall:

 

(i)            reduce the interest rate or any fees or extend the time of payment of principal, interest or any fees or reduce the principal amount of any Loan or Letters of Credit, in each case without the consent of each Lender directly affected thereby,

 

(ii)           increase the Commitment of any Lender over the amount thereof then in effect or provided hereunder, in each case without the consent of the Lender directly affected thereby,

 

(iii)          increase the amount of the Maximum Credit without the consent of all Lenders (provided, that, the increase provided for in Section 2.5 hereof shall not be deemed an increase requiring the consent of any Lender) without the consent of Administrative Agent and all of Lenders;

 

(iv)          release all or substantially all of the Collateral (except as expressly required hereunder or under any of the other Financing Agreements or applicable law and except as permitted under Section 14.11(b) hereof), or release of any Borrower or any Guarantor (except as expressly permitted under the Financing Agreements), or agree to the subordination of any of the Obligations, or alter the order of application set forth in Section 6.7(b) or alter the pro-rata requirements of Section 6.11 or Section 6.12, in each case without the consent of Administrative Agent, Collateral Agent and all of Lenders,

 

(v)           consent to the assignment or transfer by any Borrower or Guarantor of any of their rights and obligations under this Agreement, without the consent of Administrative Agent, Collateral Agent and all of Lenders,

 

(vi)          amend, modify or waive any terms of this Section 13.3, without the consent of Administrative Agent, Collateral Agent and all of Lenders;

 

(vii)         reduce any percentage specified in the definition of Required Lenders or Supermajority Lenders, without the consent of Administrative Agent, Collateral Agent and all of Lenders, or

 

(viii)        increase the advance rates constituting part of the Borrowing Base (in each case other than as provided for in the definition of such terms), or amend, modify or waive any provisions of the definition of the term Borrowing Base or any of the defined terms referred to in the definition of the term Borrowing Base, in each case as to any of the foregoing if the effect thereof increases the amount of the Borrowing Base, without the consent of Administrative Agent, Collateral Agent and the Supermajority Lenders.

 

(b)           Agents, Lenders and each Issuing Bank shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its or their rights, powers and/or remedies unless such waiver shall be in writing and signed as provided herein.  Any such waiver shall be enforceable only to the extent specifically set forth therein.  A waiver by an Agent, any Lender or Issuing Bank of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedy which an Agent, any Lender or Issuing Bank would otherwise have on any future occasion, whether similar in kind or otherwise.

 

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(c)           Notwithstanding anything to the contrary contained in Section 13.3(a) above, in connection with any amendment, waiver, discharge or termination, in the event that any Lender whose consent thereto is required shall fail to consent or fail to consent in a timely manner (such Lender being referred to herein as a “Non-Consenting Lender”), but the consent of any other Lenders to such amendment, waiver, discharge or termination that is required are obtained, if any, then Administrative Agent or Borrower Agent shall have the right, but not the obligation, at any time within one hundred twenty (120) days thereafter, and upon the exercise by Administrative Agent or Borrower Agent of such right, such Non-Consenting Lender shall have the obligation, to sell, assign and transfer to Administrative Agent or such Eligible Transferee as Administrative Agent or Borrower Agent may specify, the Commitment of such Non-Consenting Lender and all rights and interests of such Non-Consenting Lender pursuant thereto.  Administrative Agent shall provide the Non-Consenting Lender with prior written notice of its intent to exercise its right under this Section (or if Administrative Agent does not exercise such right, Borrower Agent shall provide Administrative Agent and the Non-Consenting Lender with prior written notice of its intent to exercise its right under this Section), which notice shall specify the date on which such purchase and sale shall occur, which date shall be within thirty (30) days after such notice.  Such purchase and sale shall be pursuant to the terms of an Assignment and Acceptance (whether or not executed by the Non-Consenting Lender), except that on the date of such purchase and sale, Administrative Agent, or such Eligible Transferee specified by Administrative Agent shall pay to the Non-Consenting Lender (except as Administrative Agent and such Non-Consenting Lender may otherwise agree) the amount equal to: (i) the principal balance of the Loans held by the Non-Consenting Lender outstanding as of the close of business on the business day immediately preceding the effective date of such purchase and sale, plus (ii) amounts accrued and unpaid in respect of interest and fees payable to the Non-Consenting Lender to the effective date of the purchase (including amounts payable under Section 3.9 as if the Non-Consenting Lender’s Eurodollar Rate Loans were being prepaid on the purchase date, but in no event shall the Non-Consenting Lender be deemed entitled to any early termination fee).  Such purchase and sale shall be effective on the date of the payment of such amount to the Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall terminate on such date.

 

(d)           The consent of (i) Administrative Agent shall be required for any amendment, waiver or consent affecting the rights or duties of Administrative Agent hereunder or under any of the other Financing Agreements and (ii) Collateral Agent shall be required for any amendment, waiver or consent affecting the rights or duties of Collateral Agent hereunder or under any of the other Financing Agreements, in each case in addition to the consent of the Lenders otherwise required by this Section and the exercise by Agents of any of their rights hereunder with respect to Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an amendment to the advance rates provided for in this Section 13.3.  The consent of an Issuing Bank shall be required for any amendment, waiver or consent affecting the rights or duties of such Issuing Bank hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section; provided, that, the consent of any Issuing Bank shall not be required for any other amendments, waivers or consents.  Notwithstanding anything to the contrary contained in Section 13.3(a) above, (i) in the event that Administrative Agent shall agree that any items otherwise required to be delivered to Administrative Agent as a condition of the initial Loans and Letters of Credit hereunder may be delivered after the date hereof, Administrative Agent may, in its reasonable discretion, agree to extend the date for delivery of such items or take such other action as Administrative Agent may deem appropriate as a result of the failure to receive such items as Administrative Agent may determine or may waive any Event of Default as a result of the failure to receive such items, in each case without the consent of any Lender and (ii) Administrative Agent may consent to any change in the type of organization, jurisdiction of organization or other legal structure of any Borrower, Guarantor or any of their Subsidiaries and amend the terms hereof or of any of the other Financing Agreements as may be necessary or desirable to reflect any such change, in each case without the approval of any Lender.

 

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(e)           The consent of any Bank Product Provider that is providing Bank Products and has outstanding any such Bank Products at such time that are secured hereunder shall be required for any amendment to the priority of payment of Obligations arising under or pursuant to any Secured Hedge Agreements of a Borrower or Guarantor or other Bank Products as set forth in Section 6.7(b) hereof.

 

(f)            Notwithstanding anything to the contrary herein, (i) the Engagement Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (ii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein and (iii) Administrative Agent and the Required Lenders shall determine whether or not to allow a Borrower or Guarantor to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.

 

(g)           Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by Borrowers and Administrative Agent with the express consent of the Required Lenders (and, if its rights or obligations are affected thereby, the Collateral Agent and the Issuing Bank) if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

 

13.4         Waiver of Counterclaims.  Each Borrower and Guarantor waives all rights to interpose any claims, deductions, setoffs or counterclaims of any nature (other then compulsory counterclaims) in any action or proceeding with respect to this Agreement, the Obligations, the Collateral or any matter arising therefrom or relating hereto or thereto.

 

13.5         Indemnification.  Each Borrower and Guarantor shall, jointly and severally, indemnify and hold Agents, each Lender and Issuing Bank, and their respective officers, directors, agents, employees, advisors and counsel and their respective Affiliates (each such person being an “Indemnitee”), harmless from and against any and all losses, claims, damages, penalties, liabilities, costs or expenses (including attorneys’ fees and expenses) imposed on, incurred by or asserted against any of them in connection with any litigation, investigation, claim or proceeding commenced or threatened related to the negotiation, preparation, execution, delivery, enforcement, performance or administration of this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of the transactions contemplated hereby or any act, omission, event or transaction related or attendant thereto, including amounts paid in settlement, court costs, and the fees and expenses of counsel except that Borrowers and Guarantors shall not have any obligation under this Section 13.5 to indemnify an Indemnitee with respect to a matter covered hereby resulting from the gross negligence or willful misconduct of such Indemnitee as determined pursuant to a final, non-appealable order of a court of competent jurisdiction (but without limiting the obligations of Borrowers or Guarantors as to any other Indemnitee).   To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates any law or public policy, Borrowers and Guarantors shall pay the maximum portion which it is permitted to pay under applicable law to Agents and Lenders in satisfaction of indemnified matters under this Section.  To the extent permitted by applicable law, no Borrower or Guarantor shall assert, and each Borrower and Guarantor hereby waives, any claim against any Indemnitee, 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 of the other Financing Agreements or any undertaking or transaction contemplated hereby.  No Indemnitee referred to above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or 

 

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other information transmission systems in connection with this Agreement or any of the other Financing Agreements or the transaction contemplated hereby or thereby.  All amounts due under this Section shall be payable upon demand. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.  Notwithstanding the foregoing, any indemnification with respect to duties, taxes, levies, imposts, fees, deductions, charges or withholdings of any kind imposed by any Governmental Authority (other than those imposed with respect to a non-tax litigation, investigation, claim or proceeding covered by this Section 13.5) shall be governed by Section 6.8.

 

SECTION 14.                                             THE AGENTS

 

14.1         Appointment, Powers and Immunities.  Each Secured Party irrevocably designates, appoints and authorizes Credit Suisse to act as Administrative Agent and Wells Fargo Capital Finance, LLC to act as Collateral Agent hereunder and under the other Financing Agreements with such powers as are specifically delegated to Administrative Agent and Collateral Agent by the terms of this Agreement and of the other Financing Agreements, together with such other powers as are reasonably incidental thereto.  Agents (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Financing Agreements, and shall not by reason of this Agreement or any other Financing Agreement be a trustee or fiduciary for any Secured Party; (b) shall not be responsible to Secured Parties for any recitals, statements, representations or warranties contained in this Agreement or in any of the other Financing Agreements, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Financing Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Financing Agreement or any other document referred to or provided for herein or therein or for any failure by any Borrower or Guarantor or any other Person to perform any of its obligations hereunder or thereunder; and (c) shall not be responsible to Secured Parties for any action taken or omitted to be taken by it hereunder or under any other Financing Agreement or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Agents may employ agents and attorneys in fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys in fact selected by it in good faith.  Each Agent and any such agent or attorney-in-fact may perform any and all of such Agent’s duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of this Section 14 shall apply to any such agent or attorney-in-fact and to the Related Parties of the applicable Agent and any such agent or attorney-in-fact, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent.  The Administrative Agent may deem and treat the payee of any note as the holder thereof for all purposes hereof unless and until the assignment thereof pursuant to an agreement (if and to the extent permitted herein) in form and substance reasonably satisfactory to Administrative Agent shall have been delivered to and acknowledged by Administrative Agent.

 

14.2         Reliance by Agents.  Each Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telecopy or other electronic means) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by such Agent.  As to any matters not expressly provided for by this Agreement or any other Financing Agreement, each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Required Lenders or all of Lenders as is required in such circumstance, and such instructions of such Agent and any action taken or failure to act pursuant thereto shall be binding on all Lenders.

 

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14.3         Events of Default.

 

(a)           Neither Agent shall be deemed to have knowledge or notice of the occurrence of a Default or an Event of Default or other failure of a condition precedent to the Loans and Letters of Credit hereunder, unless and until such Agent has received written notice from a Lender, or a Borrower specifying such Event of Default or any unfulfilled condition precedent, and stating that such notice is a “Notice of Default or Failure of Condition”.  In the event that an Agent receives such a Notice of Default or Failure of Condition, such Agent shall give prompt notice thereof to the Lenders.  Each Agent shall (subject to Section 14.7) take such action with respect to any such Event of Default or failure of condition precedent as shall be directed by the Required Lenders to the extent provided for herein; provided, that, unless and until such Agent shall have received such directions, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to or by reason of such Event of Default or failure of condition precedent, as it shall deem advisable in the best interest of Lenders.  Without limiting the foregoing, and notwithstanding the existence or occurrence and continuance of an Event of Default or any other failure to satisfy any of the conditions precedent set forth in Section 4 of this Agreement to the contrary, unless and until otherwise directed by the Required Lenders, 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 or cause to be issued any Letter of Credit for the ratable account and risk of Lenders from time to time if Administrative Agent believes making such Loans or issuing or causing to be issued such Letter of Credit is in the best interests of Lenders.

 

(b)           Except with the prior written consent of Agents, no Secured Party may assert or exercise any enforcement right or remedy in respect of the Loans, Letter of Credit Obligations or other Obligations, as against any Borrower or Guarantor or any of the Collateral or other property of any Borrower or Guarantor or otherwise under any of the Financing Agreements.

 

14.4         Agents in Their Individual Capacity.  With respect to their respective Commitments and the Loans made and Letters of Credit issued or caused to be issued by them (and any successor acting as Administrative Agent o Collateral Agent, as applicable), so long as Credit Suisse and Wells Fargo Capital Finance, LLC shall be Lenders hereunder, they shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as an Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Credit Suisse or Wells Fargo Capital Finance, LLC, as applicable, in their individual capacity as a Lender hereunder.  Credit Suisse (and any successor acting as Administrative Agent), Wells Fargo Capital Finance, LLC (and any successor acting as Collateral Agent) and their respective Affiliates may (without having to account therefor to any Lender) lend money to, make investments in and generally engage in any kind of business with Parent and Borrowers (and any of its and their respective Subsidiaries or Affiliates) as if it were not acting as an Agent, and Credit Suisse, Wells Fargo Capital Finance, LLC and their respective Affiliates may accept fees and other consideration from any Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in connection with this Agreement or otherwise without having to account for the same to Lenders.

 

14.5         Indemnification.  Lenders agree to indemnify each Agent and each Issuing Bank (to the extent not reimbursed by Borrowers hereunder and without limiting any obligations of Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any and all claims of any kind and nature whatsoever that may be imposed on, incurred by or asserted against such Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Financing Agreement or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including the costs and expenses that such Agent is obligated to pay hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents; provided, that, no Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of the party to be indemnified as determined by a final non-appealable judgment of a court of competent jurisdiction.  The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

 

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14.6         Non-Reliance on Agents and Other Lenders.

 

(a)           Each Secured Party agrees that it has, independently and without reliance on Agents or any other Secured Party, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrowers and Guarantors and has made its own decision to enter into this Agreement and that it will, independently and without reliance upon Agents or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the other Financing Agreements.  Agents shall not be required to keep themselves informed as to the performance or observance by any Borrower or Guarantor of any term or provision of this Agreement or any of the other Financing Agreements or any other document referred to or provided for herein or therein or to inspect the properties or books of any Borrower or Guarantor.  Each Agent will use reasonable efforts to provide Lenders with any information received by such Agent from any Borrower or Guarantor which is required to be provided to Lenders or deemed to be requested by Lenders hereunder and with a copy of any Notice of Default or Failure of Condition received by such Agent from any Borrower or any Lender; provided, that, such Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to such Agent’s own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Except for notices, reports and other documents expressly required to be furnished to Lenders by Administrative Agent or deemed requested by Lenders hereunder (including the documents provided for in Section 14.10 hereof), Administrative Agent shall not have any duty or responsibility to provide any Lender with any other credit or other information concerning the affairs, financial condition or business of any Borrower or Guarantor that may come into the possession of Administrative Agent.

 

14.7         Failure to Act.  Except for action expressly required of an Agent hereunder and under the other Financing Agreements, an Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from Lenders of their indemnification obligations under Section 14.5 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

 

14.8         Additional Loans.  Administrative Agent shall not make any Loans or an Issuing Bank provide any Letter of Credit to any Borrower on behalf of Lenders intentionally and with actual knowledge that such Loans or Letter of Credit would cause the aggregate amount of the total outstanding Loans and Letters of Credit to exceed the Borrowing Base, without the prior consent of all Lenders, except, that, Administrative Agent may make such additional Revolving Loans or an Issuing Bank may provide such additional Letter of Credit on behalf of Lenders, intentionally and with actual knowledge that such Revolving Loans or Letter of Credit will cause the total outstanding Revolving Loans and Letters of Credit to exceed the Borrowing Base, as Agents may deem necessary or advisable in their discretion; provided, that: (a) the aggregate principal amount of the additional Revolving Loans or additional Letters of Credit that Administrative Agent may make or Issuing Bank provide after obtaining actual knowledge that the aggregate principal amount of the Loans equal or exceed the Borrowing Base shall not cause such additional Loans and Letters of Credit, plus the amount of Special Agent Advances made pursuant to Section 14.11(a)(ii) hereof then outstanding, to exceed the aggregate amount equal to ten (10%) percent of the then most current Borrowing Base available to Agents as of the date such additional Loans are made or Letters of Credit provided and shall not cause the total principal amount of the Loans and Letters of Credit to exceed the Maximum Credit and (b) no such additional Revolving Loan or Letter of Credit shall be outstanding more than ninety (90) days after the date such additional Revolving Loan or Letter of Credit is made or issued (as the case may be), except as the Required Lenders may otherwise agree.  Each Lender shall be obligated to pay Administrative Agent the amount of its Pro Rata Share of any such additional Loans or Letters of Credit.

 

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14.9         Concerning the Collateral and the Related Financing Agreements.

 

(a)           Each Secured Party authorizes and directs the Agents to enter into this Agreement and the other Financing Agreements to which they are a party.  Each Secured Party agrees that any action taken by an Agent or Required Lenders (or such greater percentage as may be required hereunder) in accordance with the terms of this Agreement or the other Financing Agreements and the exercise by an Agent or Required Lenders (or such greater percentage as may be required hereunder) of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all Secured Parties.

 

(b)           Without limiting the generality of the foregoing, each Secured Party authorizes Collateral Agent to enter into the Intercreditor Agreement on behalf of such Secured Party (and, notwithstanding anything to the contrary contained in Section 13.3(a), each Secured Party further authorizes the Collateral Agent to enter into any joinder agreement to the Intercreditor Agreement contemplated by the Intercreditor Agreement for the purpose of joining a new agent or secured party as a party to the Intercreditor Agreement) and agrees that it will be bound by the terms of the Intercreditor Agreement as if it were a direct signatory thereto, whether or not such Secured Party executes the Intercreditor Agreement.

 

14.10       Field Audit, Examination Reports and other Information; Disclaimer by Lenders.  By signing this Agreement, each Lender:

 

(a)           is deemed to have requested that Agents furnish such Lender (and Agents agree that they will furnish to such Lender), promptly after it becomes available, a copy of each field audit or examination report and Borrowing Base Certificate prepared or received by such Agent (each field audit or examination report and Borrowing Base Certificate being referred to herein as a “Report” and collectively, “Reports”), appraisals with respect to the Collateral and financial statements with respect to Parent and its Subsidiaries received by Agents;

 

(b)           expressly agrees and acknowledges that Agents (i) do not make any representation or warranty as to the accuracy of any Report, appraisal or financial statement or (ii) shall not be liable for any information contained in any Report, appraisal or financial statement;

 

(c)           expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agents or any other party performing any audit or examination will inspect only specific information regarding Borrowers and Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and records, as well as on representations of Borrowers’ and Guarantors’ personnel; and

 

(d)           agrees to keep all Reports confidential and strictly for its internal use in accordance with the terms of Section 15.5 hereof, and not to distribute or use any Report in any other manner.

 

14.11       Collateral Matters.

 

(a)           Administrative Agent may, at its option, from time to time, at any time on or after an Event of Default and for so long as the same is continuing or upon any other failure of a condition precedent to the Loans and Letters of Credit hereunder, make such disbursements and advances (“Special Agent Advances”) which Agents, in their sole discretion, (i) deem necessary or desirable either to preserve or protect the Collateral or any portion thereof or (ii) to enhance the likelihood or maximize the amount of repayment by Borrowers and Guarantors of the Loans and other Obligations, provided, that, (A) the aggregate principal amount of the Special Agent Advances pursuant to clause (i) of this subsection (a), plus the Special Agent Advances pursuant to this clause (ii) of this subsection (a), outstanding at any time, plus the then outstanding principal amount of the additional Loans and Letters of Credit which Administrative Agent may make or provide as set forth in Section 14.8 hereof, shall not exceed the aggregate amount equal to ten (10%) percent of the then most current Borrowing Base available to Agents as of the date such Special

 

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Agent Advances are made and (B) the aggregate principal amount of the Special Agent Advances pursuant to clause (i) of this subsection (a), plus the Special Agent Advances pursuant to this clause (ii) of subsection (a), outstanding at any time, plus the then outstanding principal amount of the Loans and the Letter of Credit Obligations, shall not exceed the Maximum Credit, and (C) no such Special Agent Advances under clause (i) or clause (ii) of this subsection (a) shall be outstanding more than ninety (90) days after the date such Special Agent Advance is made, except as the Required Lenders may otherwise agree or (iii) to pay any other amount chargeable to any Borrower or Guarantor pursuant to the terms of this Agreement or any of the other Financing Agreements consisting of (A) costs, fees and expenses and (B) payments to Issuing Bank in respect of any Letter of Credit Obligations.  The Special Agent Advances shall be repayable on demand and together with all interest thereon shall constitute Obligations secured by the Collateral.  Special Agent Advances shall not constitute Loans but shall otherwise constitute Obligations hereunder.  Interest on Special Agent Advances shall be payable at the Interest Rate then applicable to Base Rate Loans and shall be payable on demand.  Without limitation of its obligations pursuant to Section 6.13, each Lender agrees that it shall make available to Administrative Agent, upon Administrative Agent’s demand, in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Special Agent Advance.  If such funds are not made available to Administrative Agent by such Lender, such Lender shall be deemed a Defaulting Lender and Administrative Agent shall be entitled to recover such funds, on demand from such Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to Administrative Agent at the Federal Funds Rate for each day during such period (as published by the Federal Reserve Bank of New York or at Administrative Agent’s option based on the arithmetic mean determined by Administrative Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. on that day by each of the three leading brokers of Federal funds transactions in New York selected by Administrative Agent) and if such amounts are not paid within three (3) days of Administrative Agent’s demand, at the highest Interest Rate provided for in Section 3.1 hereof applicable to Base Rate Loans.

 

(b)           Lenders hereby irrevocably authorize Collateral Agent, at its option and in its reasonable discretion to release any security interest in, mortgage or lien upon, any of the Collateral (i) upon termination of the Commitments and payment and satisfaction of all of the Obligations and delivery of cash collateral to the extent required under Section 15.1 below, or (ii) constituting property being sold or disposed of if Borrower Agent or any Borrower or Guarantor certifies to Agents that the sale or disposition is made in compliance with Section 10.1 hereof (and Agents may rely conclusively on any such certificate, without further inquiry), or (iii) constituting property in which any Borrower or Guarantor did not own an interest at the time the security interest, mortgage or lien was granted or at any time thereafter, or (iv) if required or permitted under the terms of any of the other Financing Agreements, including any intercreditor agreement, or (v) subject to Section 13.3, if the release is approved, authorized or ratified in writing by the Required Lenders.  Except as provided above, Collateral Agent will not release any security interest in, mortgage or lien upon, any of the Collateral without the prior written authorization of all of the Lenders. Upon request by Collateral Agent at any time, Lenders will promptly confirm in writing Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section.  In no event shall the consent or approval of an Issuing Bank to any release of Collateral be required.  Nothing contained herein shall be construed to require the consent of any Bank Product Provider to any release of any Collateral or termination of security interests in any Collateral.

 

(c)           Without any manner limiting Collateral Agent’s authority to act without any specific or further authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon request by Collateral Agent, the authority to release Collateral conferred upon Collateral Agent under this Section.  Collateral Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the security interest, mortgage or liens granted to Collateral Agent upon any Collateral to the extent set forth above; provided, that, (i) Collateral Agent shall not be required to execute any such document on terms which, in Collateral Agent’s opinion, would expose 

 

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Collateral Agent to liability or create any obligations or entail any consequence other than the release of such security interest, mortgage or liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any security interest, mortgage or lien upon (or obligations of any Borrower or Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.

 

(d)           Collateral Agent shall have no obligation whatsoever to any Secured Party or any other Person to investigate, confirm or assure that the Collateral exists or is owned by any Borrower or Guarantor or is cared for, protected or insured or has been encumbered, or that any particular items of Collateral meet the eligibility criteria applicable in respect of the Loans or Letters of Credit hereunder, or whether any particular reserves are appropriate, or that the liens and security interests granted to Collateral Agent pursuant hereto or any of the Financing Agreements or otherwise have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Collateral Agent in this Agreement or in any of the other Financing Agreements, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the other terms and conditions contained herein, Collateral Agent may act in any manner it may deem appropriate, in its reasonable discretion, given Collateral Agent’s own interest in the Collateral as a Lender and that Collateral Agent shall have no duty or liability whatsoever to any other Lender or Issuing Bank.

 

14.12       Agency for Perfection.  Each Secured Party hereby appoints Collateral Agent and each other Secured Party as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral of Collateral Agent in assets which, in accordance with Article 9 of the UCC can be perfected only by possession (or where the security interest of a secured party with possession has priority over the security interest of another secured party) and Collateral Agent and each Secured Party hereby acknowledges that it holds possession of any such Collateral for the benefit of Collateral Agent as secured party.  Should any Secured Party obtain possession of any such Collateral, such Secured Party shall notify Collateral Agent thereof, and, promptly upon Collateral Agent’s request therefor shall deliver such Collateral to Collateral Agent or in accordance with Collateral Agent’s instructions.

 

14.13       Agent May File Proofs of Claim.

 

(a)           In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower or Guarantor, Agents (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Agents shall have made any demand on the Borrowers) shall be entitled and empowered, 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, Letter of Credit Obligations and all other Obligations (other than obligations under Bank Products to which an Agent is not a party) that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders, Issuing Bank and Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders, Issuing Bank and Agents and their respective agents and counsel and all other amounts due Lenders, Issuing Bank and Agents 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 judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to Administrative Agent and, in the event that Administrative Agent 

 

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shall consent to the making of such payments directly to Lenders and Issuing Bank, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent.

 

(b)           Nothing contained herein shall be deemed to authorize an Agent to authorize or consent to or accept or adopt on behalf of the other Agent, any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of the other Agent, any Lender or Issuing Bank or to authorize an Agent to vote in respect of the claim of the other Agent, any Lender or Issuing Bank in any such proceeding.

 

14.14       Successor Agent.  Either Agent may resign as an Agent upon thirty (30) days’ notice to Lenders and Parent.  If an Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent or collateral agent, as applicable, for Lenders.  If no successor agent is appointed prior to the effective date of the resignation of an Agent, such Agent may appoint, after consulting with Lenders and Parent, a successor administrative agent for collateral agent, as applicable, from among Lenders.  Upon the acceptance by the Lender so selected of its appointment as a successor agent hereunder, such successor agent shall succeed to all of the rights, powers and duties of the retiring Agent and the term “Administrative Agent” or “Collateral Agent”, as applicable, as used herein and in the other Financing Agreements shall mean such successor agent and the retiring Agent’s appointment, powers and duties as an Agent shall be terminated.  After any retiring Agent’s resignation hereunder as an Agent, the provisions of this Section 14 shall inure to its benefit as to any actions taken or omitted by it while it was an Agent under this Agreement.  If no successor agent has accepted appointment as Administrative Agent or Collateral Agent, as applicable, by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nonetheless thereupon become effective and Lenders shall perform all of the duties of such retiring Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.

 

14.15       Legal Representation of Agent.  In connection with the negotiation, drafting, and execution of this Agreement and the other Financing Agreements, or in connection with future legal representation relating to loan administration, amendments, modifications, waivers, or enforcement of remedies, Latham and Watkins LLP has only represented and shall only represent Credit Suisse in its capacity as Administrative Agent and as a Lender.  Each other Lender hereby acknowledges that such firm does not represent it in connection with any such matters.

 

14.16       Agent Determinations.  Each reference in this Agreement to any action, determination, exercise of discretion or other conduct of similar import by or with respect to “Agents” shall be deemed to refer to such action, determination, exercise of discretion or other conduct taken, made or exercised, as the case may be, by the consenting vote of both Agents; provided, that, in the event that Agents do not agree with respect to any of the foregoing, at any such time, each reference to “Agents” shall be deemed to refer to such action, determination, exercise of discretion or other conduct taken, made or exercised, as the case may be, by the one of the Agents either asserting the more conservative credit judgment from a lending perspective or declining to permit the requested action for which consent is being sought by the Borrowers, as applicable.

 

14.17       Other Designations.  Notwithstanding any other provision of this Agreement or any other Financing Agreements, each of  the Arrangers, the Syndication Agents and the Documentation Agents  are named as such for recognition purposes only, and in their respective capacities as such shall have no obligation, liability, responsibility or duty under this Agreement or any of the other Financing Agreements; it being understood and agreed that each of  the Arrangers, the Syndication Agents and the Documentation Agents  shall be entitled to all indemnification and reimbursement rights in favor of the Agents provided herein and in the other Financing Agreements.  Without limiting the foregoing, neither the Arrangers, the 

 

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Syndication Agents nor the Documentation Agents  in their  respective  capacities as such  shall, by reason of this Agreement or any other Financing Agreement, have or be deemed to have any fiduciary relationship with any Lender, Borrower, Guarantor or other Person.

 

14.18       Intercreditor Agreement.  Each of the Lenders hereby acknowledges that it has received and reviewed the Intercreditor Agreement and agrees to be bound by the terms thereof.  Each Lender (and each Person that becomes a Lender hereunder pursuant to Section 15.7) hereby authorizes and directs Credit Suisse to enter into the Intercreditor Agreement on behalf of such Lender and agrees that Credit Suisse may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement.  In addition, each Lender and Agent acknowledge and agree that (a) the rights and remedies of the Agents and Lenders hereunder and under the other Financing Agreements are subject to the Intercreditor Agreement and (b) in the event of a conflict, the provisions of the Intercreditor Agreement shall control.

 

14.19       Withholding Tax.  To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any withholding tax applicable to such payment.  If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any other reason, or the Administrative Agent has paid over to the Internal Revenue Service applicable withholding tax relating to a payment to a Lender but no deduction has been made from such payment, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any penalties or interest and together with any and all expenses incurred.

 

SECTION 15.                                             TERM OF AGREEMENT; MISCELLANEOUS

 

15.1         Term.

 

(a)           This Agreement and the other Financing Agreements shall become effective as of the date set forth on the first page hereof and shall continue in full force and effect for a term ending on the Maturity Date, unless sooner terminated pursuant to the terms hereof.   In addition, Borrowers may terminate this Agreement at any time upon five (5) Business Days’ prior written notice to Administrative Agent (which notice shall be irrevocable) and Administrative Agent may, at its option, and shall at the direction of Required Lenders, terminate this Agreement at any time an Event of Default exists or has occurred and is continuing.  Upon the Maturity Date or any other effective date of termination of the Financing Agreements, Borrowers shall pay to Administrative Agent all outstanding and unpaid Obligations and shall furnish cash collateral to Administrative Agent (or at Administrative Agent’s option, a letter of credit issued for the account of Borrowers and at Borrowers’ expense, in form and substance reasonably satisfactory to Administrative Agent, by an issuer reasonably acceptable to Administrative Agent and payable to Administrative Agent as beneficiary) in such amounts as Administrative Agent determines are reasonably necessary to secure Agents and Lenders from loss, cost, damage or expense, including attorneys’ fees and expenses, in connection with any contingent Obligations, including issued and outstanding Letter of Credit Obligations and checks or other payments provisionally credited to the Obligations and/or as to which either Agent or any Lender has not yet received final and indefeasible payment (and including any contingent liability of Administrative Agent to any bank at which deposit accounts of Borrowers and Guarantors are maintained under any Deposit Account Control Agreement) and for any of the Obligations arising under or in connection with any Bank Products in such amounts as the party providing such Bank Products may require (unless such Obligations arising under or in connection with any Bank Products are paid in full in cash and terminated in a manner reasonably satisfactory to such other party).  The amount of such cash collateral (or letter of credit, as Administrative Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations plus the amount of any fees and expenses payable in connection therewith through the end of the

 

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latest expiration date of the then outstanding Letters of Credit.  Such payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to the Agent Payment Account or such other bank account of Administrative Agent, as Administrative Agent may, in its discretion, designate in writing to Borrower Agent for such purpose.  Interest shall be due until and including the next Business Day, if the amounts so paid by Borrowers to the Agent Payment Account or other bank account designated by Administrative Agent are received in such bank account later than 2:00 p.m.  The cash collateral in respect of Letter of Credit Obligations received by Administrative Agent as provided above then in possession of Administrative Agent (and not applied or to be applied to any of the Letter of Credit Obligations) shall be returned to Borrower Agent, upon its written request, within ten (10) Business Days after the end of the latest expiration date of the Letters of Credit giving rise to such Letter of Credit Obligations (so long as Administrative Agent has received evidence reasonably satisfactory to it and the Issuing Bank that no unpaid draw has been made under the Letters of Credit prior to its expiration).

 

(b)           No termination of the Commitments, this Agreement or any of the other Financing Agreements shall relieve or discharge any Borrower or Guarantor of its respective duties, obligations and covenants under this Agreement or any of the other Financing Agreements until all Obligations have been fully and finally discharged and paid, and Collateral Agent’s continuing security interest in the Collateral and the rights and remedies of Agents and Lenders hereunder, under the other Financing Agreements and applicable law, shall remain in effect until all such Obligations have been fully and finally discharged and paid, other than the contingent Obligations for which Administrative Agent has received cash collateral, or at its option, a letter of credit, in accordance with Section 15.1(a) above.  Accordingly, each Borrower and Guarantor waives any rights it may have under the UCC to demand the filing of termination statements with respect to the Collateral and Collateral Agent shall not be required to send such termination statements to Borrowers or Guarantors, or to file them with any filing office, unless and until this Agreement shall have been terminated in accordance with its terms and all Obligations paid and satisfied in full in immediately available funds, other than the contingent Obligations for which Administrative Agent has received cash collateral, or at its option, a letter of credit, in accordance with Section 15.1(a) above.

 

15.2         Interpretative Provisions.

 

(a)           All terms used herein which are defined in Article 1, Article 8 or Article 9 of the UCC shall have the meanings given therein unless otherwise defined in this Agreement.

 

(b)           All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires.

 

(c)           All references to any Borrower, Guarantor, Agents and Lenders pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns.

 

(d)           The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

(e)           The word “including” when used in this Agreement shall mean “including, without limitation” and the word “will” when used in this Agreement shall be construed to have the same meaning and effect as the word “shall”.

 

(f)            An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 13.3 or is cured.  Reference herein to a Default or Event of 

 

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Default that “exists” shall only include a Default or Event of Default, as the case may be, that has not been cured or waived in accordance with the terms hereof, so that such Default or Event of Default, as the case may be, shall cease to exist and shall not be deemed to be continuing if it has been so cured or waived.

 

(g)           All references to the term “good faith” used herein when applicable to an Agent or any Lender shall mean, notwithstanding anything to the contrary contained herein or in the UCC, honesty-in-fact in the conduct or transaction concerned and observance of reasonable commercial standards of fair dealing based on how an asset-based lender with similar rights providing a credit facility of the type set forth herein would act in similar circumstances at the time with the information then available to it.  All references to the term “reasonably” or “reasonable” as applied to any conduct or determination by an Agent shall be based on how an asset-based lender with similar rights providing a credit facility of the type set forth herein would act in similar circumstances.

 

(h)           Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of Parent delivered to the Lenders; provided, that, in the event of any change in GAAP after the date hereof that affects the covenants in Section 11 hereof, Borrower Agent may by notice to Administrative Agent, or Administrative Agent may, and at the request of Required Lenders shall, by notice to Borrower Agent require that such covenants be calculated in accordance with GAAP as in effect, and as applied by Parent and its Subsidiaries, immediately before the applicable change in GAAP became effective, until either the notice from the applicable party is withdrawn or such covenant is amended in a manner reasonably satisfactory to Parent, Administrative Agent and the Required Lenders.  Parent shall deliver to Administrative Agent and upon Administrative Agent’s request, to each Lender at the same time as the delivery of any financial statements given in accordance with the provisions of Section 9.6 hereof (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding monthly, quarterly or annual financial statements and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.  Notwithstanding the above, all calculations of the financial covenants in Section 11 shall be made on a Pro Forma Basis.

 

(i)            Unless otherwise provided, Dollar ($) baskets set forth in the representations and warranties, covenants and events of default provisions of this Agreement (and other similar baskets; it being understood that this sentence does not apply to Section 2 of this Agreement) are calculated as of each date of incurrence; provided that if any such baskets are exceeded solely as a result of fluctuations to Consolidated Total Assets for the most recently completed fiscal quarter after the last time such baskets were assessed, such baskets will not be deemed to have been exceeded solely as a result of such fluctuations.

 

(j)            Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to and including”; provided, that, with respect to a computation of fees or interest payable to an Agent or any Lender, such period shall in any event consist of at least one full day.

 

(k)           Unless otherwise expressly provided herein, (i) references herein to any agreement, document or instrument shall be deemed to include all subsequent amendments, modifications, supplements, extensions, renewals, restatements or replacements with respect thereto, but only to the extent the same are not prohibited by the terms hereof or of any other Financing Agreement, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, recodifying, supplementing or interpreting the statute or regulation.

 

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(l)            The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

(m)          This Agreement and other Financing Agreements may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

 

(n)           This Agreement and the other Financing Agreements are the result of negotiations among and have been reviewed by counsel to Agents and the other parties, and are the products of all parties.  Accordingly, this Agreement and the other Financing Agreements shall not be construed against Agents or Lenders merely because of an Agent’s or any Lender’s involvement in their preparation.

 

15.3         Notices.

 

(a)           All notices, requests and demands hereunder shall be in writing and deemed to have been given or made:  if delivered in person, immediately upon delivery; if by facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next Business Day, one (1) Business Day after sending; and if by certified mail, return receipt requested, five (5) days after mailing.  Notices delivered through electronic communications shall be effective to the extent set forth in Section 15.3(b) below.  All notices, requests and demands upon the parties are to be given to the following addresses (or to such other address as any party may designate by notice in accordance with this Section):

 

	
If to any Borrower   or Guarantor:
    	
 
    	
CPG International   Inc.
    
	
 
    	
 
    	
801 Corey Street
    
	
 
    	
 
    	
Scranton,   Pennsylvania 18505
    
	
 
    	
 
    	
Attention: Scott   Harrison
    
	
 
    	
 
    	
Telephone No.:   (570) 558-8000
    
	
 
    	
 
    	
Telecopy No.    (570) 558-8201
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Fried, Frank,   Harris, Shriver & Jacobson LLP
    
	
 
    	
 
    	
One New York Plaza
    
	
 
    	
 
    	
New York, New York   10004
    
	
 
    	
 
    	
Attention: Emil Buchman, Esq.
    
	
 
    	
 
    	
Telephone No.:   (212) 859-8298
    
	
 
    	
 
    	
Telecopy No.    (212) 859-4000
    
	
 
    	
 
    	
 
    
	
If to Administrative   Agent:
    	
 
    	
Credit Suisse AG,   Cayman Islands Branch
    
	
 
    	
 
    	
Eleven Madison   Avenue
    
	
 
    	
 
    	
New York, New York   10010
    
	
 
    	
 
    	
Attention: Sean   Portrait
    
	
 
    	
 
    	
Telephone No.: (919)   994-6369
    
	
 
    	
 
    	
Telecopy No.:   (212) 332-2291
    
	
 
    	
 
    	
Email:   agency.loanops@credit-suisse.com
    
	
 
    	
 
    	
 
    
	
If to Collateral   Agent:
    	
 
    	
Wells Fargo Capital   Finance, LLC
    
	
 
    	
 
    	
12 East 49th Street
    
	
 
    	
 
    	
New York, New York   10017
    
	
 
    	
 
    	
Attention: Tom   Martin, Portfolio Management — 
   CPG International
    
	
 
    	
 
    	
Telephone No.: (212)   454-4367
    
	
 
    	
 
    	
Telecopy No.: (212)   545-4283
    

 

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If to Issuing Bank:
    	
 
    	
Wells Fargo Bank,   National Association
    
	
 
    	
 
    	
12 East 49th Street
    
	
 
    	
 
    	
New York, New York   10017
    
	
 
    	
 
    	
Attention: Tom   Martin, Portfolio Management — 
   CPG International
    
	
 
    	
 
    	
Telephone No.: (212)   454-4367
    
	
 
    	
 
    	
Telecopy No.: (212)   545-4283
    

 

(b)           Notices and other communications to Lenders and an Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative Agent or as otherwise determined by Administrative Agent; provided, that, the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2 hereof if such Lender or Issuing Bank, as applicable, has notified Administrative Agent that it is incapable of receiving notices under such Section by electronic communication.  Unless Administrative Agent otherwise requires, (i) notices and other communications 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 such notice or other communication is not given during the normal business hours of the recipient, such notice shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications 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 communications is available and identifying the website address therefor.  In no event shall Administrative Agent or any of its officers, directors, agents, employees, advisors and counsel and their respective Affiliates have any liability to Borrowers, Guarantors, any Lender, the Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrowers’ or Administrative Agent’s transmission of materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Person; provided, that, in no event shall Administrative Agent or any of its officers, directors, agents, employees, advisors and counsel and their respective Affiliates have any liability to Borrowers, Guarantors, any Lender, the Issuing Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

15.4         Partial Invalidity.  If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law.

 

15.5         Confidentiality.

 

(a)           Each Agent, Lenders and Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors, trustees and representatives and to any pledgee referred to in Section 15.7 hereof and to any direct or indirect contractual counterparty (or such contractual counterparty’s professional advisor) or other party under or in connection with any Bank Product (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), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), or otherwise in accordance with its compliance with applicable regulations, (iii) to the extent required by applicable laws or 

 

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regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any of the other Financing Agreements or any action or proceeding relating to this Agreement or any of the other Financing Agreements or applicable law or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction or any other party in connection with any Bank Product, (vii) with the consent of Borrower Agent, or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to an Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than Borrower Agent.

 

(b)           For purposes of this Section, “Information” means all information received from a Borrower or Guarantor or any Subsidiary relating to Borrowers, Guarantors or any Subsidiary or any of their respective businesses, other than any such information that is available to an Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by such Borrower or Guarantor or any Subsidiary, provided that, in the case of information received from a Borrower, Guarantor or any Subsidiary 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.

 

(c)           Each of the Agents, the Lenders and the Issuing Bank acknowledges that (i) the Information may include material non-public information concerning a Borrower, Guarantor or a Subsidiary, as the case may be, (ii) it has developed compliance procedures regarding the use of material non-public information and (iii) it will handle such material non-public information in accordance with applicable laws and regulations, including Federal and state securities laws. The obligations of Agents, Lenders and Issuing Bank under this Section 15.5 shall supersede and replace the obligations of Agents, Lenders and Issuing Bank under any confidentiality letter signed prior to the date hereof or any other arrangements concerning the confidentiality of information provided by any Borrower or Guarantor to an Agent or any Lender.

 

(d)           Arrangers, Syndication Agents and Documentation Agents may share with their respective Affiliates any information relating to the Credit Facility and Parent and its Subsidiaries.  Arrangers,  Syndication Agents and Documentation Agents may disclose information relating to the Credit Facility to Gold Sheets and other publications with such information to consist of deal terms and other information customarily found in such publications.  In addition, Arrangers, Documentation Agents and Syndication Agents may otherwise use the corporate names and logos of Borrowers and Guarantors and such information in “tombstones” or other advertisements, public statements or other marketing materials, and in connection with obtaining a published CUSIP from the Standard & Poor’s CUSIP Service Bureau.

 

15.6         Successors.  This Agreement, the other Financing Agreements and any other document referred to herein or therein shall be binding upon and inure to the benefit of and be enforceable by Agents, Secured Parties, Borrowers, Guarantors and their respective successors and assigns, except that no Borrower may assign its rights under this Agreement, the other Financing Agreements and any other document referred to herein or therein without the prior written consent of Agents and Lenders.  Any such purported assignment without such express prior written consent shall be void.  No Secured Party may assign its rights and obligations under this Agreement without the prior written consent of Agents, except as provided in Section 15.7 below. The terms and provisions of this Agreement and the other Financing Agreements are for the purpose of defining the relative rights and obligations of Borrowers, Guarantors, Agents and Secured Parties with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this Agreement or any of the other Financing Agreements.

 

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15.7         Assignments; Participations.

 

(a)           Each Lender may assign all or, if less than all, a portion equal to at least $1,000,000 in the aggregate for the assigning Lender, of such rights and obligations under this Agreement to one or more Eligible Transferees (but not including for this purpose any assignments in the form of a participation), each of which assignees shall become a party to this Agreement as a Lender (A) by execution and delivery to the Administrative Agent of an Assignment and Acceptance via an electronic settlement system acceptable to the Administrative Agent or (B) if previously agreed with the Administrative Agent, by manually execution and delivery to the Administrative Agent of an Assignment and Acceptance; provided, that, (i) such transfer or assignment will not be effective without the prior written consent of Administrative Agent and each Issuing Bank, which consent shall not be unreasonably withheld, conditioned or delayed, provided, that, the consent of Administrative Agent or such Issuing Bank shall not be required in connection with an assignment to another Lender, to any Affiliate of a Lender, or to any Approved Fund, (ii) so long as no Event of Default has occurred and is continuing, such transfer or assignment will not be effective without the prior written consent of Borrower Agent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that, the consent of Borrower Agent shall not be required in connection with an assignment to another Lender, to any Affiliate of a Lender, or to any Approved Fund or prior to the completion of the primary syndication as determined by Administrative Agent; provided  further that such consent of the Borrower Agent shall be deemed to have been given if the Borrower Agent has not responded within ten Business Days of a request for such consent, (iii) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned, (iv) such transfer or assignment will not be effective until recorded by Administrative Agent on the Register, and (v) Administrative Agent shall have received for its sole account payment of a processing fee from the assigning Lender or the assignee in the amount of $3,500.

 

(b)           Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance,  the assignee thereunder shall be a party hereto and to the other Financing Agreements and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations (including, without limitation, the obligation to participate in Letter of Credit Obligations) of a Lender hereunder and thereunder and  the assigning Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement.

 

(c)           By execution and delivery of an Assignment and Acceptance, the assignor and assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any of the other Financing Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Financing Agreements furnished pursuant hereto, (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower, Guarantor or any of their Subsidiaries or the performance or observance by any Borrower or Guarantor of any of the Obligations; (iii) such assignee confirms that it has received a copy of this Agreement and the other Financing Agreements, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such assignee will, independently and without reliance upon the assigning Lender, Administrative Agent 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 this Agreement and the other Financing Agreements, (v) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other 

 

146

 

Financing Agreements as are delegated to such Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Financing Agreements are required to be performed by it as a Lender.  Agent and Lenders may furnish any information concerning any Borrower or Guarantor in the possession of Agent or any Lender from time to time to assignees and Participants.

 

(d)           Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Financing Agreements (including, without limitation, all or a portion of its Commitments and the Loans owing to it and its participation in the Letter of Credit Obligations, without the consent of Administrative Agent or the other Lenders); provided, that, (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment hereunder) and the other Financing Agreements shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and Borrowers, Guarantors, the other Lenders and Agents shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Financing Agreements, (iii) the Participant shall not have any rights under this Agreement or any of the other Financing Agreements (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by any Borrower or Guarantor hereunder shall be determined as if such Lender had not sold such participation, (iv) each Lender shall retain the sole right to vote, approve or consent, or to not approve or not consent, to or in connection with any amendment, waiver or other modifications of any of the terms and provisions hereof or of any of the other Financing Agreements or to otherwise act or refrain from acting hereunder or thereunder within its exclusive discretion and without any vote, approval or consent of any Participant, other than for the forgiveness of principal, interest or fees, reductions in the interest rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, the extension of the Maturity Date for a Loan or Commitment in which such Participant has an interest, or any date fixed for any regularly scheduled payment of principal, interest or fees in such Loan or Commitment, or the release of a Borrower or Guarantor or all or substantially all of the Collateral and in the case of any Participant that may be an Affiliate of a Borrower or Guarantor, (A) no such Participant shall have any of the rights to vote, approve or consent to any amendment, waiver or modification hereof or of any of the other Financing Agreements or the right to vote, approve or consent to any vote, approval of consent or other action or refraining from action of the Lender in whose Loans and Commitments such Participant has an interest, and (B) such Participant shall not, and shall not have the right to, attend any meeting (whether conducted by telephone or in person) with any Agent or Lender or receive any information from an Agent or any Lender in connection with the Credit Facility.  Notwithstanding anything to the contrary, to the extent permitted by law, each Participant shall be entitled to the benefits of Section 6.8 as though it were a Lender; provided  that such Participant agrees to comply with the provisions of Section 6.8 as though it were a Lender; provided further that a Participant shall not be entitled to receive any greater payment under Section 6.8 than the applicable Lender would  have been entitled to receive with respect to the participation sold to such Participant.

 

(e)           Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans hereunder to a Federal Reserve Bank or other Federal banking authority or institution in support of borrowings made by such Lenders from such Federal Reserve Bank or other such banking authority or institution; provided, that, no such pledge shall release such Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.

 

(f)            Any Lender that is an Issuing Bank may at any time assign all of its Commitments pursuant to this Section 15.7.  If such Issuing Bank ceases to be  Lender, it may, at its option, resign as Issuing Bank and such Issuing Bank’s obligations to issue Letters of Credit shall terminate but it shall retain 

 

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all of the rights and obligations of Issuing Bank hereunder with respect to Letters of Credit outstanding as of the effective date of its resignation and all Letter of Credit Obligations with respect thereto (including the right to require Lenders to make Revolving Loans or fund risk participations in outstanding Letter of Credit Obligations), shall continue.

 

(g)           Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to Administrative Agent and Borrower Agent (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to Administrative Agent as are required hereunder. Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of any Borrower or Guarantor under this Agreement or otherwise, (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder, and (iv) if an SPC exercises such option, such SPC shall be entitled to the benefits of Section 6.8 as though it were a Lender, but only if such SPC provides tax documentation referred to in Section 6.8 as if it were a Lender. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of Borrower Agent and Administrative Agent and with the payment of a processing fee in the amount of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

(h)           In connection with any assignment of rights and obligations of any Defaulting Lender hereunder (including pursuant to Section 3.9(b)), no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower Agent and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by such Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Bank and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

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15.8         Entire Agreement.  This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.  In the event of any inconsistency between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement shall govern.

 

15.9         USA Patriot Act.  Each Lender subject to the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001) (the “Act”) hereby notifies Borrowers and Guarantors that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each person or corporation who opens an account and/or enters into a business relationship with it, which information includes the name and address of Borrowers and Guarantors and other information that will allow such Lender to identify such person in accordance with the Act  and any other applicable law.  Borrowers and Guarantors are hereby advised that any Loans or Letters of Credit hereunder are subject to satisfactory results of such verification.

 

15.10       No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby, Borrowers and Guarantors each acknowledge and agree, and acknowledge their respective Affiliates’ understanding, that: (a) the Credit Facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any of the other Financing Agreements) are an arm’s-length commercial transaction between Borrowers and Guarantors and their respective Subsidiaries, on the one hand, and Agents and Arrangers, on the other hand, and each of Borrowers and Guarantors is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Financing Agreements (including any amendment, waiver or other modification hereof or thereof); (b) in connection with the process leading to such transaction, Agents and Arrangers are and have been acting solely as a principal and are not the financial advisor, agent or fiduciary, for any Borrower or Guarantor or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (c) no Agent or Arranger have assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Borrower or Guarantors or any of their respective Affiliates with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any of the other Financing Agreements (irrespective of whether any Agent or Arranger has advised or is currently advising any Borrower or Guarantor or any of their respective Affiliates on other matters) and no Agent or Arranger has any obligation to any Borrower or Guarantor or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Financing Agreements; (d) Agents and the Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and Guarantors and their respective Affiliates, and no Agent or Arranger have any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (e) Agents and the Arrangers have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any of the other Financing Agreements) and each Borrower and Guarantor has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  Each Borrower and Guarantor hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against Agents and the Arrangers with respect to any breach or alleged breach of agency or fiduciary duty.

 

15.11       Counterparts, Etc.  This Agreement or any of the other Financing Agreements may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement or any of 

 

149

 

the other Financing Agreements by telefacsimile or other electronic method of transmission shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Financing Agreements.  Any party delivering an executed counterpart of any such agreement by telefacsimile or other electronic method of transmission shall in a timely manner also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

150

 

IN WITNESS WHEREOF, Agents, Lenders, Borrowers and Guarantors have caused these presents to be duly executed as of the day and year first above written.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SCRANTON PRODUCTS   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Scott Harrison
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AZEK BUILDING   PRODUCTS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Harrison
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PROCELL DECKING INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Amy C. Bevacqua
    
	
 
    	
Name:
    	
Amy C. Bevacqua
    
	
 
    	
Title:
    	
Secretary
    
				

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CPG INTERNATIONAL   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Harrison
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CPG INTERNATIONAL I   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Harrison
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SANTANA PRODUCTS INC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Harrison
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CPG SUB I   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Amy C. Bevacqua
    
	
 
    	
Name:
    	
Amy C. Bevacqua
    
	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
VYCOM CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Amy C. Bevacqua
    
	
 
    	
Name:
    	
Amy C. Bevacqua
    
	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
SANATEC SUB I   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Amy C. Bevacqua
    
	
 
    	
Name:
    	
Amy C. Bevacqua
    
	
 
    	
Title:
    	
Secretary
    

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

	
AGENTS AND LENDERS:
    
	
 
    
	
 
    	
 
    
	
CREDIT SUISSE AG, CAYMAN ISLANDS 

BRANCH, as Administrative Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ John D. Toronto
    	
 
    
	
Name: 
    	
John D. Toronto
    
	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Vipul Dhadda
    	
 
    
	
Name: 
    	
Vipul Dhadda
    
	
Title: 
    	
Associate
    
	
 
    
	
 
    
	
WELLS FARGO CAPITAL FINANCE, LLC,
    
	
as Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Marc J. Breier
    	
 
    
	
Name:
    	
Marc J. Breier
    
	
Title: 
    	
Senior Vice   President
    
	
 
    
	
WELLS FARGO BANK, NATIONAL ASSOCIATION,
    
	
as Issuing Bank and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Marc J. Breier
    	
 
    
	
Name:
    	
Marc J. Breier
    
	
Title: 
    	
Senior Vice   President
    
	
 
    
	
UBS LOAN FINANCE LLC,
    
	
as a Lender
    
	
 
    
	
 
    
	
By: 
    	
/s/ Mary E. Evans
    	
 
    
	
Name:
    	
Mary E. Evans
    
	
Title: 
    	
Associate Director
    
	
 
    
	
 
    
	
By:
    	
/s/ Irja R. Otsa
    	
 
    
	
Name:
    	
Irja R. Otsa
    
	
Title:
    	
Associate Director
    

 

 

EXHIBIT A
 to
 LOAN AND SECURITY AGREEMENT

 

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This Assignment and Acceptance (the “Assignment and Acceptance”) 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 Loan and Security Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance 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 Loan 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 Loan 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 identified below (including, any guarantees, Letters of Credit and Special Agent Advances) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Loan 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 Acceptance, without representation or warranty by the Assignor.

 

	
1.
    	
 
    	
Assignor:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Assignee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[and is a Lender or   an Affiliate/Approved Fund of [identify Lender](1)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Borrower Agent:
    	
 
    	
CPG International I   Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Borrowers:
    	
 
    	
Scranton Products   Inc., AZEK Building Products, Inc. and Procell Decking Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Administrative   Agent:
    	
 
    	
Credit Suisse AG,   Cayman Islands Branch, as the administrative agent under the Loan Agreement
    

 

(1)          Select as applicable.

 

1

 

	
6.
    	
 
    	
Loan Agreement:
    	
 
    	
The Loan and   Security Agreement dated as of February [    ],   2011, among Scranton Products, Inc., a Delaware corporation (“Scranton”),   AZEK Building Products, Inc., a Delaware corporation (“AZEK”),   Procell Decking Inc., a Delaware corporation (“Procell”, and together   with Scranton and AZEK, the “Borrowers”), CPG International Inc., a   Delaware corporation, CPG International I Inc., a Delaware   corporation, Santana Products Inc., a Delaware corporation, CPG Sub I   Corporation, a Delaware Corporation, Vycom Corp., a Delaware corporation and   Sanatec Sub I Corporation, a Delaware corporation, the Lenders, Wells Fargo   Bank, National Association, as issuing bank (in such capacity, “Issuing   Bank”), Credit Suisse AG, Cayman Islands Branch, as administrative agent   for the Secured Parties (in such capacity, the “Administrative Agent”)   and Wells Fargo Capital Finance, LLC, as   collateral agent for the Secured Parties (in such capacity, the “Collateral   Agent”).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Assigned Interest:
    	
 
    	
 
    

 

	
Aggregate Amount of
   Commitment/Loans of all Lenders
    	
 
    	
Amount of
   Commitment/Loans
   Assigned
    	
 
    	
Percentage Assigned of
   Commitments/Loans(2)
    	
 
    
	
$
    	
65,000,000
    	
 
    	
$
    	
 
    	
%
    	
 
    
							

 

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 terms set forth in this Assignment and Acceptance are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

(2)          Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

2

 

	
 
    	
ASSIGNEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNEE]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

[Consented to and](3) Acknowledged:

 

	
CREDIT SUISSE AG,   CAYMAN ISLANDS 

BRANCH, as   Administrative Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Consented to:](4)

 

	
[CPG INTERNATIONAL I   INC.]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Consented to:](5)

 

	
[WELLS FARGO BANK,   NATIONAL ASSOCIATION, as Issuing Bank]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

(3)          To be added only if the consent of the Administrative Agent is required by the terms of the Loan Agreement.

(4)          To be added only if the consent of the Borrower Agent is required by the terms of the Loan Agreement.

(5)          To be added only if the consent of the Issuing Bank is required by the terms of the Loan Agreement.

 

3

 

ANNEX I

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

 

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, (iii) its Commitments, and the outstanding balances of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth herein, and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance 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 Loan Agreement or any other Financing Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Agreements or any collateral thereunder, (iii) the financial condition of the Borrowers or the Guarantors or any of their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Financing Agreement or (iv) the performance or observance by the Borrowers, the Guarantors or any of their respective Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Financing Agreement.

 

1.2.          Assignee.  The Assignee (a) represents and warrants that (i) it is an Eligible Transferee and has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it satisfies the requirements, if any, specified in the Loan Agreement 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 Loan Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Loan Agreement, together with copies of the most recent financial statements referred to in Section 4.1(o) or delivered pursuant to Section 9.6 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 Acceptance 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, Collateral Agent, Issuing Bank or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor, the Collateral Agent, the Issuing Bank or any other Lender, 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 Financing Agreements, (ii) it appoints and authorizes the Administrative Agent and the Collateral Agent to take such action on its behalf and to exercise such powers under the Loan Agreement as are delegated to the Administrative Agent and the Collateral Agent, as applicable, by the terms thereof, together with such powers as are reasonably incidental thereto, and (iii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Agreements 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.

 

Annex I-1

 

3.             General Provisions.  This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.  The parties hereto shall (a) execute and deliver to the Administrative Agent this Assignment and Acceptance via an electronic settlement system acceptable to the Administrative Agent; or (b) if previously agreed with the Administrative Agent, manually execute and deliver to the Administrative Agent this Assignment and Acceptance.  This Assignment and Acceptance shall be construed in accordance with and governed by the laws of the State of New York.

 

Annex I-2

 

EXHIBIT B

TO

LOAN AND SECURITY AGREEMENT

 

Form of Borrowing Base Certificate

 

See attached

 

 

 

	
Wells   Fargo Capital Finance, LLC
    	

    	
Date:
    	
 
    
	
AVAILABILITY   REPORT
    	
Number:
    	
 
    

 

	
BORROWER
    	
CPG International Inc,
    	
 
    
	
ADDRESS
    	
888 North Kayaar Avenue Scranton, PA 18504
    	
 
    

 

BBC As of Date:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
AZEK
    	
 
    	
Scranton
    	
 
    	
Total CPG
    	
 
    
	
Accounts Receivable Outstanding Assigned To Wells   Fargo Capital Finance (Previous Report) 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additions To Accounts Receivable:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
New Billings
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Miscellaneous Debits
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Less Credit Memos
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Net Additions To A/R:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deductions To Accounts Receivable:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Discounts Allowed
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Collections
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Returns and Allowances
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Other
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Net Deductions To A/R:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accounts Receivable Outstanding Assigned To Wells   Fargo Capital Finance
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less: 
    	
Ineligible A/R:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Past Dues
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Credits
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Contras
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Cross Aged (60%)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Foreign
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Concentration Caps
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Chargebacks
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Customer Deposits
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Accrued Customer Rebates
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Pending Credit Memos
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Government
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Other
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Total Ineligible A/R:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Eligible   Accounts Receivable
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Advance Rate
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Availability From Accounts Receivable
    	
@
    	
85.00
    	
%
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Availability From Inventory- see attached   schedules
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ineligible In-transit Inventory
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Availability From Inventory
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Seasonal A/R Availability  
    	
 
    	
 
    	
@
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Seasonal Inventory Availability - see attached schedule
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Seasonal Availability (capped @ $5,000,000)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
* AZEK Seasonal Tranche available from   February 1 through May 31.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products Seasonal A/R Availability
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products Seasonal Inventory Availability - see attached   schedule
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Seasonal Availability (capped @ $5,000,000)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
* Scranton Products Seasonal Tranche available   from July 1 through October 31.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Availability Before Loans and Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rent Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Other Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Availability Before Loans and After Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Line of Credit Limit
    	
 
    	
$
    	
65,000,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lesser of Line of Credit Limit or Total   Availability Before Loans and L/Cs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Sub Limit
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Standby LCs
    	
 
    	
$
    	
 
    	
 
    	
10,000,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Availability Before Loans and After L/Cs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Loan Balance Previous Report
    	
 
    	
$
    	
 0
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less; Cash Remitted
    	
 
    	
$
    	
 0
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additional Borrowing This Report
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Loan Balance Today
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Availability After Loans, L.C.’s, and Reserves
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
														

 

Pursuant to the provisions of the Loan and Security Agreement dated as of February 13, 2011 (the “Credit Agreement”) among CPG International I Inc. (the “Borrower Agent”), certain of its affiliates and/or subsidiaries. Wells Fargo Capital Finance, LLC (“Wells Fargo”), as the Collateral Agent, Wells Fargo Bank, National Association, as the Issuing Bank, Credit Suisse AG. Cayman Islands Branch, as the Administrative Agent, and UBS Securities LLC and Wells Fargo, as the Co-Syndication Agents, the Borrower Agent hereby delivers this Borrowing Base and Loan Report to Wells Fargo as the Collateral Agent. Capitalized terms used In this Borrowing Base and Loan Report and not otherwise defined herein have the meanings specified in the Credit Agreement.

 

	
Wells   Fargo Capital Finance, LLC
    	
 
    	
CLIENT: 
    	
 
    	
CPG   International Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12   East 49th Street, 43rd Floor
    	
 
    	
BY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
New   York, New York 10017
    	
 
    	
Name/Title:
    	
 
    	
 
    

 

 

EXHIBIT C

TO

LOAN AND SECURITY AGREEMENT

 

Information Certificate

 

See attached.

 

 

INFORMATION CERTIFICATE

OF

CPG INTERNATIONAL INC.

and its Subsidiaries

 

February 18, 2011

 

Credit Suisse AG, Cayman Islands Branch

Eleven Madison Avenue

New York, NY 10010

 

In connection with the Loan and Security Agreement dated as of even date herewith (as amended, restated, modified and/or supplemented from time to time, the “Loan Agreement”) entered into by and between Scranton Products Inc., AZEK Building Products, Inc. and Procell Decking Inc., as Borrowers, and CPG International Inc. (“Parent”), CPG International I Inc., Santana Products Inc., CPG Sub I Corporation, Vycom Corp and Sanatec Sub I Corporation, as Guarantors (individually a “Company” and collectively “Companies”) and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”) and certain other lenders (together with Credit Suisse in its individual capacity, collectively, “Lenders”), for whom Credit Suisse will be acting as administrative agent (in such capacity, “Administrative Agent”) please be advised as follows as of the date hereof (except as otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement shall be used herein as therein defined.):

 

1.                                       The full and exact name of each Company as set forth in its certificate of incorporation (or its certificate of formation or other organizational document filed with the applicable state governmental authority, as the case may be) is as follows:

 

CPG International Inc.

CPG International I Inc.

AZEK Building Products, Inc.

Procell Decking Inc.

Scranton Products Inc.

Santana Products Inc.

CPG Sub I Corporation

Vycom Corp.

Sanatec Sub I Corporation

 

2.                                       Each Company is a registered organization of the following type (for example, corporation, limited partnership, limited liability company, etc.):

 

	
Company
    	
 
    	
Type of Organization
    	
 
    	
Jurisdiction of Organization
    
	
CPG International   Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
CPG International I   Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
Scranton Products   Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
AZEK Building   Products, Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
Procell Decking Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    

 

1

 

	
Company
    	
 
    	
Type of Organization
    	
 
    	
Jurisdiction of Organization
    
	
Santana Products   Inc.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
CPG Sub I   Corporation
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
Vycom Corp.
    	
 
    	
Corporation
    	
 
    	
Delaware
    
	
Sanatec Sub I   Corporation
    	
 
    	
Corporation
    	
 
    	
Delaware
    

 

3.                                       The organizational identification number of each Company issued by its jurisdiction of organization is as set forth below (or if none is issued by the jurisdiction of organization indicate “none”):

 

	
Company
    	
 
    	
ID No.
    
	
CPG International   Inc.
    	
 
    	
3937658
    
	
CPG International I   Inc.
    	
 
    	
3953009
    
	
Scranton Products   Inc.
    	
 
    	
3359187
    
	
AZEK Building Products, Inc.
    	
 
    	
3359183
    
	
Procell Decking Inc.
    	
 
    	
4068656
    
	
Santana Products   Inc.
    	
 
    	
3564527
    
	
CPG Sub I   Corporation
    	
 
    	
4068643
    
	
Vycom Corp.
    	
 
    	
4068646
    
	
Sanatec Sub I   Corporation
    	
 
    	
4068653
    

 

4.                                       The Federal Employer Identification Number of each Company is as follows:

 

	
Company
    	
 
    	
FEIN
    
	
CPG International   Inc.
    	
 
    	
20-2779385
    
	
CPG International I   Inc.
    	
 
    	
20-2656352
    
	
Scranton Products   Inc.
    	
 
    	
23-3070648
    
	
AZEK Building   Products, Inc.
    	
 
    	
23-3070649
    
	
Procell Decking Inc.
    	
 
    	
20-4445582
    
	
Santana Products   Inc.
    	
 
    	
32-0031532
    
	
CPG Sub I Corporation
    	
 
    	
20-4445405
    
	
Vycom Corp.
    	
 
    	
20-4445460
    
	
Sanatec Sub I   Corporation
    	
 
    	
20-4445529
    

 

5.                                       Each Company is duly qualified and authorized to transact business as a foreign organization in the following states and is in good standing in such states:

 

	
Company
    	
 
    	
Jurisdiction
    
	
CPG International   Inc.
    	
 
    	
PA, MI, CA, TX, DE
    

 

2

 

	
Company
    	
 
    	
Jurisdiction
    
	
CPG International I   Inc.
    	
 
    	
PA, DE
    
	
Scranton Products   Inc.
    	
 
    	
PA, MN, TS, DE, WA, FL, NJ
    
	
AZEK Building   Products, Inc.
    	
 
    	
PA, NJ, NC, FL, TX, DE, OH, WA, CT
    
	
Procell Decking Inc.
    	
 
    	
AL, DE
    
	
Santana Products   Inc.
    	
 
    	
DE
    
	
CPG Sub I   Corporation
    	
 
    	
DE
    
	
Vycom Corp.
    	
 
    	
DE
    
	
Sanatec Sub I   Corporation
    	
 
    	
DE
    

 

6.                                       Since the date of its organization, the name of each Company as set forth in its organizational documentation as filed of record with the applicable state authority has been changed as follows:

 

	
Company
    	
 
    	
Date of
   Change
    	
 
    	
Prior Name
    
	
CPG International   Inc.
    	
 
    	
6/12/06
    	
 
    	
Compression Polymers   Holding II Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Compression Polymers   Holding II Corp.
    	
 
    	
5/2/05
    	
 
    	
Compression Polymers   Holding II LP
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
6/20/06
    	
 
    	
Scranton Products   Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Corporation
    	
 
    	
6/12/06
    	
 
    	
Compression Polymers   Holding Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
6/20/06
    	
 
    	
Scranton Products I   Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products I   Inc.
    	
 
    	
06/12/06
    	
 
    	
Compression Polymers   Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
11/13/06
    	
 
    	
Vycom Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Procell Decking Inc.
    	
 
    	
01/31/07
    	
 
    	
VC Sub I Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Santana Products   Inc.
    	
 
    	
1/25/07
    	
 
    	
CPCapitol   Acquisition Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG Sub I   Corporation
    	
 
    	
06/12/06
    	
 
    	
CPH Sub I   Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Vycom Corp.
    	
 
    	
1/25/07
    	
 
    	
CPG Sub II   Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPH Sub II   Corporation
    	
 
    	
06/12/06
    	
 
    	
CPG Sub II   Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sanatec Sub I   Corporation
    	
 
    	
6/12/06
    	
 
    	
CPC Sub I   Corporation
    

 

3

 

7.                                       Since the date of five (5) years prior to the date hereof, each Company has made or entered into the following mergers or acquisitions:

 

	
Company
    	
 
    	
Merger/Acquisition
    	
 
    	
Date
    
	
CPG International   Inc.
    	
 
    	
Acquisition of all   membership interests of Pro-Cell, LLC, an Alabama limited liability company   from Christopher Bardasian, Kevin Sloan and Larry Sloan
    	
 
    	
1/31/07
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
Purchase of all   shares of capital stock of Santana Products, Inc. from Santana Holdings,   LLC
    	
 
    	
04/20/06
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Merger of Santana   Products, Inc. with Scranton Products Inc.
    	
 
    	
11/30/06
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Merger of Santana   Holdings Corp. with Scranton Products Inc.
    	
 
    	
12/01/06
    

 

8.                                       Schedule 1.87 is a list of Inactive Subsidiaries that do not have material liabilities, are not engaged in any business or commercial activities, do not own any assets with a book value of more than $100,000 in the aggregate and are not obligated or liable, directly or indirectly, contingently or otherwise, in respect of any material Indebtedness or other material obligations.

 

9.                                      Schedule 5.3 sets forth the list of letters of credit issued for the account of a Borrower or Guarantor or for which such Borrower or Guarantor is otherwise liable

 

10.                                 Schedule 8.2 sets forth the chief executive office, books and records, locations of assets and all other places of business for each Company as of the date hereof.

 

11.                                 Schedule 8.4 sets forth (i) the Real Property owned or leased by the Companies and the addresses thereof and indicates any such Real Property that is Mortgaged Property and (ii) existing liens on assets of the Companies as of the date hereof.

 

12.                                 Schedule 8.6 hereto sets forth the pending judgments and litigation to be disclosed under Section 8.6 of the Loan Agreement.

 

13.                                 Schedule 8.8 hereto sets forth the environmental matters to be disclosed under Section 8.8 of the Loan Agreement.

 

14.                                 Schedule 8.10 hereto sets forth the deposit accounts, securities accounts and commodity accounts with any bank, savings and loan or other financial institution of the Companies.

 

15.                                 Schedule 8.11 hereto sets forth all of each Company’s patents, patent licenses, trademarks, trademark licenses, copyrights, copyright licenses, including their registration number, date of registration, and if licensed, the name of the licensor.

 

16.                                 Schedule 8.12 sets forth (i) the Subsidiaries of the Companies and any joint venture or partnership thereof and (ii) the issued and outstanding Equity Interests of the Companies and the owners thereof.

 

4

 

17.                                 Schedule 8.13 sets forth all of the collective bargaining or similar agreements of each Company with any union, labor organization or other bargaining agent as of the date hereof.

 

18.                                 Schedule 8.15 hereto sets forth the Material Contracts (as defined in the Loan Agreement) of each Company as of the date hereof.

 

19.                                 Schedule 10.3 hereto sets forth certain Indebtedness of the Companies.

 

20.                                 Schedule 10.4 hereto sets forth certain Investments of the Companies.

 

21.                                 Schedule 10.6 lists certain transactions of the Companies with its Affiliates

 

22.                                 No Company has any chattel paper (whether tangible or electronic) or instruments as of the date hereof, except as follows:

 

(a)                                  (a)           Subordinated Intercompany Note by Procell Decking Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $33.0 million

 

(b)                                 (b)           Subordinated Intercompany Note by Scranton Products Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $33.5 million

 

(c)                                  (c)           Subordinated Intercompany Note by AZEK Building Products, Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $132.0 million

 

(d)                                 (d)           Subordinated Intercompany Note by Scranton Products Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $88.0 million

 

(e)                                  (e)           Subordinated Intercompany Note by CPG International Holdings LP, as payor, in favor of  AZEK Building Products, Inc., as payee

 

23.                                 No Company has any commercial tort claims.

 

24.                                 There is no provision in the certificate of incorporation, certificate of formation,  articles of organization, by laws or operating agreement of any Company (as applicable) or the other organizational documents of such Company, or in the laws of the State of its organization, requiring any vote or consent of it shareholders, members or other holders of the equity interests therein to borrow or to authorize the mortgage or pledge of or creation of a security interest in any assets of such Company or any subsidiary.  Such power is vested exclusively in its Board of Directors.

 

25.                                 The officers of each Company and their respective titles are as follows:

 

	
Company
    	
 
    	
Title
    	
 
    	
Name
    
	
(a) CPG   International Inc.
    	
 
    	
CEO and President
    	
 
    	
Eric K. Jungbluth
    
	
 
    	
 
    	
AC Chairman
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
Executive VP, CFO   and Treasurer
    	
 
    	
Scott Harrison
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
VP, Asst. Secretary   and Asst.
    	
 
    	
Vinay Kumar
    

 

5

 

	
Company
    	
 
    	
Title
    	
 
    	
Name
    
	
 
    	
 
    	
Treasurer
    	
 
    	
 
    
	
 
    	
 
    	
VP and Corp.   Controller
    	
 
    	
Rosa Abba
    
	
 
    	
 
    	
VP Operations
    	
 
    	
Jason Grommon
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(b) CPG   International I Inc.
    	
 
    	
CEO and President
    	
 
    	
Eric K. Jungbluth
    
	
 
    	
 
    	
Chairman
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
Executive VP, CFO   and Treasurer
    	
 
    	
Scott Harrison
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
VP, Asst. Secretary and Asst. Treasurer
    	
 
    	
Vinay Kumar
    
	
 
    	
 
    	
VP and Corp   Controller
    	
 
    	
Rosa Abba
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(c) Scranton   Products Inc.
    	
 
    	
Chairman
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
CEO
    	
 
    	
Eric K. Jungbluth
    
	
 
    	
 
    	
President
    	
 
    	
Donald C. Wharton
    
	
 
    	
 
    	
Executive VP, CFO,   Treasurer
    	
 
    	
Scott Harrison
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
VP, Asst. Secretary and Asst. Treasurer
    	
 
    	
Vinay Kumar
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(d) AZEK Building Products, Inc.
    	
 
    	
Chairman
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
CEO and President
    	
 
    	
Eric K. Jungbluth
    
	
 
    	
 
    	
Executive VP, CFO   and Treasurer
    	
 
    	
Scott Harrison
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
VP, Asst. Secretary and Asst. Treasurer
    	
 
    	
Vinay Kumar
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(e) Procell Decking   Inc.
    	
 
    	
Chairman
    	
 
    	
Christopher P. Mahan
    
	
 
    	
 
    	
President and   Treasurer
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(f) Santana Products   Inc.
    	
 
    	
President
    	
 
    	
Eric K. Jungbluth
    
	
 
    	
 
    	
VP, Treasurer and   Asst. Sec.
    	
 
    	
Scott Harrison
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(g) CPG Sub I   Corporation
    	
 
    	
Chairman
    	
 
    	
Christopher P. Mahan
    
	
 
    	
 
    	
President and   Treasurer
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    

 

6

 

	
Company
    	
 
    	
Title
    	
 
    	
Name
    
	
(h) Vycom Corp.
    	
 
    	
Chairman
    	
 
    	
Christopher P. Mahan
    
	
 
    	
 
    	
President and   Treasurer
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(i) Sanatec Sub I   Corporation
    	
 
    	
Chairman
    	
 
    	
Christopher P. Mahan
    
	
 
    	
 
    	
President and   Treasurer
    	
 
    	
Brian R. Hoesterey
    
	
 
    	
 
    	
VP, Secretary and   Asst. Treasurer
    	
 
    	
Amy C. Bevacqua
    

 

26.                                 The members of the Board of Directors of each Company are:

 

	
Company
    	
 
    	
Directors
    
	
 
    	
 
    	
 
    
	
CPG International   Inc.
    	
 
    	
James Andersen,   Vincent A. Calarco, Eric K. Jungbluth, Brian R. Hoesterey, Christopher P.   Mahan, Stuart Christhif, Vincent A. Sarni, Julian M. Steinberg
    
	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
James Andersen,   Vincent A. Calarco, Eric K. Jungbluth, Brian R. Hoesterey, Christopher P.   Mahan, Vincent A. Sarni, Stuart Christhif, Julian M. Steinberg
    
	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
James Andersen,   Vincent A. Calarco, Eric K. Jungbluth, Brian R. Hoesterey, Christopher P.   Mahan, Vincent A. Sarni, Stuart Christhif, Julian M. Steinberg
    
	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
James Andersen,   Vincent A. Calarco, Eric K. Jungbluth, Brian R. Hoesterey, Christopher P.   Mahan, Vincent A. Sarni, Stuart Christhif, Julian M. Steinberg
    
	
 
    	
 
    	
 
    
	
Procell Decking Inc.
    	
 
    	
Brian R. Hoesterey,   Christopher P. Mahan
    
	
 
    	
 
    	
 
    
	
Santana   Products, Inc.
    	
 
    	
Eric K. Jungbluth,   Scott Harrison
    
	
 
    	
 
    	
 
    
	
CPG Sub I   Corporation
    	
 
    	
Brian R. Hoesterey,   Christopher P. Mahan
    
	
 
    	
 
    	
 
    
	
Vycom Corp.
    	
 
    	
Brian R. Hoesterey,   Christopher P. Mahan
    
	
 
    	
 
    	
 
    
	
Sanatec Sub I   Corporation
    	
 
    	
Brian R. Hoesterey,   Christopher P. Mahan
    

 

27.                                 Certified Public Accountants for each Company is the firm of:

 

Name:  PriceWaterhouseCoopers LLP

Address:  Philadelphia, Pennsylvania

Partner Handling Relationship:  Len Combs

Were statements uncertified for any fiscal year? No.

 

7

 

	
SCRANTON PRODUCTS INC.
    	
SANTANA PRODUCTS   INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK BUILDING PRODUCTS, INC.
    	
CPG SUB I   CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL DECKING INC.
    	
VYCOM CORP.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG INTERNATIONAL INC.
    	
SANATEC SUB I   CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG INTERNATIONAL I INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    

 

8

 

SCHEDULE 1.87

to

INFORMATION CERTIFICATE

 

List of Inactive Subsidiaries

 

1.               CPG Sub I Corporation

 

2.               Vycom Corp.

 

3.               Sanatec Sub I Corporation

 

4.               Santana Products Inc.

 

S-1

 

SCHEDULE 5.3

to

INFORMATION CERTIFICATE

 

Existing Letters of Credit

 

Letter of Credit No. SM210245W for an aggregate amount of $1,430,000.00 issued in favor of CPG International Inc. and CPG International I Inc.

 

S-2

 

SCHEDULE 8.2

to

INFORMATION CERTIFICATE

 

Locations

 

A.            CPG INTERNATIONAL INC.

 

1.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

B.            CPG INTERNATIONAL I INC.

 

2.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

C.            SCRANTON PRODUCTS INC.

 

3.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
same
    

 

S-3

 

Locations of Inventory, Equipment and Other Assets

 

	
Address
    	
 
    	
Owned/Leased/Third Party
    	
 
    	
Landlord/Owner/Third Party
    
	
801 Corey Street
   Scranton, Pennsylvania 18505
    	
 
    	
Owned
    	
 
    	
Scranton Products   Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
201 West 86th Street
   Bloomington, M.N 55420
    	
 
    	
Third Party
    	
 
    	
Brunk
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
101 Power Blvd.
   Archibald, PA 18403
    	
 
    	
Third Party
    	
 
    	
Laminations Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
290 Shenault Road
   Frankfort, KY, 40601
    	
 
    	
Third Party
    	
 
    	
Frankfort Plastics
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
42 Mountain Ave.
   Nequehoning, PA 18420
    	
 
    	
Third Party
    	
 
    	
Ametec Chemical   Products
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3010 N. San Fernando   Blvd.
   Burbank, CA 91504
    	
 
    	
Third Party
    	
 
    	
Pen Valve
    

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

D.            AZEK BUILDING PRODUCTS, INC.

 

4.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
 
    

 

Locations of Inventory, Equipment and Other Assets

 

	
Address
    	
 
    	
Owned/Leased/Third Party
    	
 
    	
Landlord/Owner/Third Party
    
	
710 Warner Street
   Scranton, Pennsylvania 18505
    	
 
    	
Owned
    	
 
    	
AZEK Building   Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
888 North Keyser   Avenue
   Scranton, Pennsylvania
    	
 
    	
Leased
    	
 
    	
North Keyser   Partners LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11746 Foley Beach   Express
   Foley, Alabama
    	
 
    	
Leased
    	
 
    	
North Property   Leasing Inc. Alabama
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
214 South Clark St.
   Pella, IA 50219
    	
 
    	
Third Party
    	
 
    	
Geetings Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1000 Lillibridg
    Peckville, PA   18452
    	
 
    	
Third Party
    	
 
    	
Mariani Industries.
    

 

S-4

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

E.             PROCELL DECKING INC.

 

5.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

	
Address
    	
 
    	
Owned/Leased/Third Party
    	
 
    	
Landlord/Owner/Third Party
    
	
801 Corey Street
   Scranton, Pennsylvania 18505
    	
 
    	
Owned
    	
 
    	
Scranton Products   Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11746 Foley Beach
   Express, Foley Al.
    	
 
    	
Leased
    	
 
    	
North Property   Leasing Inc., Alabama
    

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

F.             SANTANA PRODUCTS INC.

 

6.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

G.            CPG SUB I CORPORATION

 

7.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

S-5

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

H.            VYCOM CORP.

 

8.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

I.              SANATEC SUB I CORPORATION

 

9.             Chief Executive Office and Location of Books and Records

 

	
Location
    	
 
    	
Mailing Address
    
	
888 N. Keyser Avenue
   Scranton, PA 18504
    	
 
    	
Same
    

 

Locations of Inventory, Equipment and Other Assets

 

Same as above.

 

Locations of Assets in Prior 4 Months not Listed Above

 

None.

 

S-6

 

SCHEDULE 8.4

to

INFORMATION CERTIFICATE

 

Existing Liens

 

See Attached

 

Real Property

 

Owned:

 

Scranton Products Inc.
 Building 1
 801 Corey Street
 Scranton, PA  18505

 

Scranton Products Inc.
 Building 2
 801 Corey Street
 Scranton, PA 18505

 

Scranton Products Inc.
 Building 3
 801 Corey Street
 Scranton, PA 18505

 

Scranton Products Inc.
 Building 4
 801 Corey Street
 Scranton, PA 18505

 

Scranton Products Inc.
 Building 5
 801 Corey Street
 Scranton, PA 18505

 

AZEK Building Products, Inc.
 710 Warner St.
 Scranton, PA 18505

 

Leased:

 

1.             Lease Agreement between CPG International I Inc. and North Alabama Properties, dated January 31, 2007, re: 11746 Foley Beach Express, Foley, AL 36356

 

2.             Lease Agreement between AZEK Building Products, Inc. and North Keyser Partners, LLC dated December 27, 2004, re: 888 North Keyser Avenue, Scranton, PA 18504

 

S-7

 

SCHEDULE 8.6

to

INFORMATION CERTIFICATE

 

Pending Judgements and Litigation

 

None.

 

S-8

 

SCHEDULE 8.8

to

INFORMATION CERTIFICATE

 

Environmental Compliance

 

None.

 

S-9

 

SCHEDULE 8.10

to

INFORMATION CERTIFICATE

 

Deposit Accounts

 

	
Debtor/Grantor
    	
 
    	
Financial Institution
    	
 
    	
Account Number
    	
 
    	
Type of Account
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International   Inc.
    	
 
    	
Penn Security   Bank & Trust Company
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business   Checking - Payroll
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
Penn Security   Bank & Trust Company
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business   Checking-Credit Cards
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Penn Security   Bank & Trust Company
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business   Checking-Credit Cards
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Penn Security   Bank & Trust Company
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business   Checking-Credit Cards
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business —   Deposit
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business —   Deposit
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business —   Deposit
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business — Disbursement
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business — Disbursement
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Bank of   America
    	
 
    	
[Intentionally   Omitted]
    	
 
    	
Business — Disbursement
    

 

S-10

 

SCHEDULE 8.11
 to
 INFORMATION CERTIFICATE

 

Patents and Trademarks

 

1.                                       Copyrights, Copyright Applications and Copyright Licenses

 

	
Debtor/Grantor
    	
 
    	
Title
    	
 
    	
Filing   Date/
   Issued Date
    	
 
    	
Status
    	
 
    	
Application/
   Registration No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building Products
    	
 
    	
AZEK Trimboards   Installation Guidelines
    	
 
    	
01/18/2006
    	
 
    	
Registered
    	
 
    	
0051342-000006
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AZEK Trimboards   Limited Warranty
    	
 
    	
01/18/2006
    	
 
    	
Registered
    	
 
    	
0051342-000007
    	
 
    

 

2.                                       Patents, Patent Applications and Patent Licenses

 

	
Country
    	
 
    	
Relation
   Type
    	
 
    	
Filing
   Type
    	
 
    	
Status
    	
 
    	
Application
   Number
    	
 
    	
Application
   Date
    	
 
    	
Patent
   Number
    	
 
    	
Grant Date
    	
 
    	
Title
    	
 
    	
Record
   Owner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Granted
    	
 
    	
10/821,364
    	
 
    	
4/9/2004
    	
 
    	
7,409,805
    	
 
    	
8/12/2008
    	
 
    	
LOCKER RETROFIT ASSEMBLY
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/390,037
    	
 
    	
2/20/2009
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AN APPARATUS AND METHOD FOR EDGE SEALING OF   FOAM BOARDS
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
2,693,650
    	
 
    	
2/18/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AN APPARATUS AND METHOD FOR EDGE SEALING OF   FOAM BOARDS
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Granted
    	
 
    	
2,363,976
    	
 
    	
11/26/2001
    	
 
    	
2,363,976
    	
 
    	
4/26/2005
    	
 
    	
GUARD RAIL SYSTEM
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
29/356,196
    	
 
    	
2/22/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
136652
    	
 
    	
8/10/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
29/369,633
    	
 
    	
9/10/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER HAVING UNTHREADED SHANK
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
137596
    	
 
    	
10/21/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER HAVING UNTHREADED SHANK
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CHINA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
2010305897302
    	
 
    	
11/3/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER HAVING UNTHREADED SHANK
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TAIWAN
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
099305915
    	
 
    	
11/18/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
SCREW TYPE FASTENER HAVING UNTHREADED SHANK
    	
 
    	
AZEK Building Products, Inc.
    	
 
    

 

S-11

 

	
Country
    	
 
    	
Relation
   Type
    	
 
    	
Filing
   Type
    	
 
    	
Status
    	
 
    	
Application
   Number
    	
 
    	
Application
   Date
    	
 
    	
Patent
   Number
    	
 
    	
Grant Date
    	
 
    	
Title
    	
 
    	
Record
   Owner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/819,430
    	
 
    	
6/21/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
UNIVERSAL BRACKET
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/836,685
    	
 
    	
7/15/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
IMPROVED RAIL ASSEMBLY HAVING A BALUSTER   SWING BRACKET
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/505,017
    	
 
    	
7/17/2009
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
LOCKER
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
2,697,278
    	
 
    	
3/18/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
LOCKER
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
29/358,631
    	
 
    	
3/30/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
LOCKER HANDLE
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CANADA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
136458
    	
 
    	
7/23/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
LOCKER HANDLE
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
09/004,374
    	
 
    	
1/8/1998
    	
 
    	
6,348,122
    	
 
    	
2/19/2002
    	
 
    	
FIRE RETARDING POLYPROPYLENE COMPOSITION
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GERMANY
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
19982451.7
    	
 
    	
1/8/1999
    	
 
    	
19982451.7
    	
 
    	
 
    	
 
    	
FIRE RETARDING POLYPROPYLENE COMPOSITION
    	
 
    	
Compression Polymers Group
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
08/196,660
    	
 
    	
2/10/1994
    	
 
    	
5,564,806
    	
 
    	
10/15/1996
    	
 
    	
LOCKER
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
08/356,490
    	
 
    	
12/15/1994
    	
 
    	
5,595,426
    	
 
    	
1/21/1997
    	
 
    	
LOCKER DOOR RETROFIT ASSEMBLY
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
08/754,496
    	
 
    	
11/20/1996
    	
 
    	
5,810,458
    	
 
    	
9/22/1998
    	
 
    	
LOCKER DOOR RETROFIT ASSEMBLY
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Issued
    	
 
    	
09/118,636
    	
 
    	
7/17/1998
    	
 
    	
5,951,126
    	
 
    	
9/14/1999
    	
 
    	
LOCKER DOOR RETROFIT ASSEMBLY
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/845,074
    	
 
    	
7/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
THERMOFOFMED OR MOLDED PARTITION
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
61/431,579
    	
 
    	
1/11/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
ADJUSTABLE GATE
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
61/431,611
    	
 
    	
1/11/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
BENCH AND PLANTER COMBINATION
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
29/383,114
    	
 
    	
1/12/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
BOTTOM RAIL BRACKET
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
29/383,111
    	
 
    	
1/12/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
BRACKET
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/986,483
    	
 
    	
1/7/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
INTERLOCKING DECORATIVE TRIM SYSTEM
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/985,650
    	
 
    	
1/6/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
UNIVERSAL SKIRT BOARD
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
USA
    	
 
    	
Original Filing
    	
 
    	
National
    	
 
    	
Pending
    	
 
    	
12/986,413
    	
 
    	
1/7/2011
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
WATER BARRIER TRIM
    	
 
    	
Scranton Products Inc.
    	
 
    

 

S-12

 

3.                                       Trademarks, Trademark Applications and Trademark Licenses

 

	
Mark Name
    	
 
    	
Country
    	
 
    	
Case Type
    	
 
    	
Status
    	
 
    	
App. No.
    	
 
    	
App. Date
    	
 
    	
Reg. No.
    	
 
    	
Reg. Date
    	
 
    	
Current Record
   Owner/
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1,331.590
    	
 
    	
1/17/2007
    	
 
    	
TMA711,762
    	
 
    	
4/14/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK DECK Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/319,059
    	
 
    	
11/1/2007
    	
 
    	
3,466,497
    	
 
    	
7/15/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK MOULDING Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/319,029
    	
 
    	
11/1/2007
    	
 
    	
3,461,329
    	
 
    	
7/8/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK TRIM Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/319,019
    	
 
    	
11/1/2007
    	
 
    	
3,495,156
    	
 
    	
9/2/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CELTEC
    	
 
    	
Australia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
613822
    	
 
    	
10/14/1993
    	
 
    	
A613822
    	
 
    	
10/14/1993
    	
 
    	
Vycom Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CELTEC
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
 
    	
 
    	
 
    	
 
    	
1114618
    	
 
    	
8/25/2010
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CELTEC
    	
 
    	
New Zealand
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
230946
    	
 
    	
10/11/1993
    	
 
    	
230946
    	
 
    	
10/11/1993
    	
 
    	
Vycom Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CELTEC
    	
 
    	
United Kingdom
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1,547,946
    	
 
    	
9/16/1993
    	
 
    	
1,547,946
    	
 
    	
9/16/1993
    	
 
    	
Vycom Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FLAMETEC
    	
 
    	
Germany
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
30055516
    	
 
    	
7/25/2000
    	
 
    	
30055516
    	
 
    	
4/2/2001
    	
 
    	
Compression Polymers Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ONCE YOU LOOK, IT’S ALL YOU SEE
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
701219
    	
 
    	
2/9/2005
    	
 
    	
905705
    	
 
    	
10/27/2005
    	
 
    	
Compression Polymers Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ONCE YOU LOOK, IT’S ALL YOU SEE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/487,138
    	
 
    	
9/21/2004
    	
 
    	
3,121,847
    	
 
    	
7/25/2006
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ONCE YOU LOOK, IT’S ALL YOU’LL SEE
    	
 
    	
Madrid Protocol (designating Australia,   Canada, Japan, and European Union)
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
A0000630
    	
 
    	
2/2/2005
    	
 
    	
854775
    	
 
    	
2/2/2005
    	
 
    	
Compression Polymers Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ONCE YOU LOOK, IT’S ALL YOU’LL SEE
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
701220
    	
 
    	
2/9/2005
    	
 
    	
905706
    	
 
    	
10/27/2005
    	
 
    	
Compression Polymers Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PLAYBOARD
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/283,720
    	
 
    	
8/6/2003
    	
 
    	
2,945,195
    	
 
    	
4/26/2005
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/225,010
    	
 
    	
7/9/2007
    	
 
    	
3,397,777
    	
 
    	
3/18/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SANTANA
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
489725
    	
 
    	
6/8/2001
    	
 
    	
709334
    	
 
    	
7/30/2001
    	
 
    	
Santana Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SANTANA
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
489724
    	
 
    	
6/8/2001
    	
 
    	
709333
    	
 
    	
7/30/2001
    	
 
    	
Santana Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SANTANA
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
489723
    	
 
    	
6/8/2001
    	
 
    	
831700
    	
 
    	
4/21/2004
    	
 
    	
Santana Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SEABOARD
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/308,394
    	
 
    	
10/2/2003
    	
 
    	
2,930,670
    	
 
    	
3/8/2005
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SEABOARD
    	
 
    	
Australia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
996221
    	
 
    	
4/1/2004
    	
 
    	
996221
    	
 
    	
7/25/2005
    	
 
    	
Compression Polymers Corp.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TUFFTEC LOCKERS
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/405,595
    	
 
    	
4/21/2004
    	
 
    	
2,947,960
    	
 
    	
5/10/2005
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ACACIA
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,650
    	
 
    	
10/30/2009
    	
 
    	
3,855,188
    	
 
    	
9/28/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARBOR COLLECTION
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1,478,844
    	
 
    	
4/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARBOR COLLECTION
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,638
    	
 
    	
10/30/2009
    	
 
    	
3,806,729
    	
 
    	
6/22/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Argentina
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2,835,124
    	
 
    	
6/30/2008
    	
 
    	
2,311,264
    	
 
    	
9/4/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Australia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1247932
    	
 
    	
6/24/2008
    	
 
    	
1247932
    	
 
    	
6/24/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Bermuda
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
48239
    	
 
    	
7/4/2008
    	
 
    	
48239
    	
 
    	
7/4/2008
    	
 
    	
AZEK Building Products, Inc.
    

 

S-13

 

	
Mark Name
    	
 
    	
Country
    	
 
    	
Case Type
    	
 
    	
Status
    	
 
    	
App. No.
    	
 
    	
App. Date
    	
 
    	
Reg. No.
    	
 
    	
Reg. Date
    	
 
    	
Current Record
   Owner/
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Brazil
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
901047600
    	
 
    	
7/15/2008
    	
 
    	
901047600
    	
 
    	
11/9/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Costa Rica
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
2008-6495
    	
 
    	
7/4/2008
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Dominican Republic
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2008-28199
    	
 
    	
7/2/2008
    	
 
    	
169612
    	
 
    	
9/15/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
European Union
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
005621149
    	
 
    	
1/17/2007
    	
 
    	
005621149
    	
 
    	
4/11/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
India
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1702935
    	
 
    	
6/24/2008
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
830574
    	
 
    	
1/17/2007
    	
 
    	
1007487
    	
 
    	
10/22/2007
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
830575
    	
 
    	
1/17/2007
    	
 
    	
1007488
    	
 
    	
10/22/2007
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
New Zealand
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
791673
    	
 
    	
6/24/2008
    	
 
    	
791673
    	
 
    	
6/24/2008
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Russian Federation
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2008/720470
    	
 
    	
6/27/2008
    	
 
    	
383728
    	
 
    	
7/15/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Saudi Arabia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
132336
    	
 
    	
6/28/2008
    	
 
    	
1108/24
    	
 
    	
11/15/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
South Korea
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
40-2008-0033534
    	
 
    	
7/8/2008
    	
 
    	
0791608
    	
 
    	
6/9/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
Turkey
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2008/37905
    	
 
    	
6/26/2008
    	
 
    	
2008/37905
    	
 
    	
7/28/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/594,481
    	
 
    	
3/24/2005
    	
 
    	
3,068,158
    	
 
    	
3/14/2006
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/071,690
    	
 
    	
6/29/2001
    	
 
    	
2,696,724
    	
 
    	
3/11/2003
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK PORCH Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/493,961
    	
 
    	
6/9/2008
    	
 
    	
3569527
    	
 
    	
2/3/2009
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK RAIL Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/927,147
    	
 
    	
2/3/2010
    	
 
    	
3,844,774
    	
 
    	
9/7/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK RAIL Stylized
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
 
    	
 
    	
 
    	
 
    	
1,490,880
    	
 
    	
8/3/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ULTRATEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
73/754,673
    	
 
    	
9/29/1988
    	
 
    	
1,555,756
    	
 
    	
9/12/1989
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CELTEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
73/646,733
    	
 
    	
2/17/1987
    	
 
    	
1,458,348
    	
 
    	
9/22/1987
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COBRE
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,478,852
    	
 
    	
4/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COBRE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,680
    	
 
    	
10/30/2009
    	
 
    	
3,877,979
    	
 
    	
11/16/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COMTEC INDUSTRIES
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/058,293
    	
 
    	
6/9/2010
    	
 
    	
3,907,932
    	
 
    	
1/18/2011
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COMTEC INDUSTRIES
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,789
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COMTEC INDUSTRIES
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1141007
    	
 
    	
12/9/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CORRTEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/058,307
    	
 
    	
6/9/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CORRTEC
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,788
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CORRTEC
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140101
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
EVERTUFF
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/389,987
    	
 
    	
3/24/2004
    	
 
    	
3,099,005
    	
 
    	
5/30/2006
    	
 
    	
Scranton Products Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FAWN
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,622
    	
 
    	
10/30/2009
    	
 
    	
3,855,187
    	
 
    	
9/28/2010
    	
 
    	
AZEK Building Products, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FLAMETEC
    	
 
    	
Japan
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2000-081494
    	
 
    	
7/24/2000
    	
 
    	
4445565
    	
 
    	
1/12/2001
    	
 
    	
Scranton Products Inc.
    

 

S-14

 

	
Mark Name
    	
 
    	
Country
    	
 
    	
Case Type
    	
 
    	
Status
    	
 
    	
App. No.
    	
 
    	
App. Date
    	
 
    	
Reg. No.
    	
 
    	
Reg. Date
    	
 
    	
Current Record
   Owner/
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FLAMETEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
75/905,554
    	
 
    	
1/25/2000
    	
 
    	
2,452,876
    	
 
    	
5/22/2001
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GRIP X
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/283,715
    	
 
    	
8/6/2003
    	
 
    	
2,945,194
    	
 
    	
4/26/2005
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
HARVEST COLLECTION HARVEST
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,478,846
    	
 
    	
4/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COLLECTION
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,605
    	
 
    	
10/30/2009
    	
 
    	
3,868,585
    	
 
    	
10/26/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
HINY HIDERS
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/309,661
    	
 
    	
9/1/1992
    	
 
    	
1,772,990
    	
 
    	
5/25/1993
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
HINY HIDERS and Design Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/864,403
    	
 
    	
4/19/2006
    	
 
    	
3,293,859
    	
 
    	
9/18/2007
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
HITEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/396,883
    	
 
    	
6/1/1993
    	
 
    	
1,833,834
    	
 
    	
5/3/1994
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
KYTEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
75/910,088
    	
 
    	
1/26/2000
    	
 
    	
2,511,775
    	
 
    	
11/27/2001
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
KEMPAS
    	
 
    	
United States
    	
 
    	
Intent to Use
    	
 
    	
Pending
    	
 
    	
77/861,670
    	
 
    	
10/30/2009
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
KONA
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,614
    	
 
    	
10/30/2009
    	
 
    	
3,806,726
    	
 
    	
6/22/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
KONA
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,478,845
    	
 
    	
4/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MARIPOSA
    	
 
    	
United States
    	
 
    	
Intent to Use
    	
 
    	
Pending
    	
 
    	
77/861,664
    	
 
    	
10/30/2009
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MODENA
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/195,469
    	
 
    	
12/10/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MORADO
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,675
    	
 
    	
10/30/2009
    	
 
    	
3,855,189
    	
 
    	
9/28/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
POLYCARVE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/070,828
    	
 
    	
6/24/2010
    	
 
    	
3,911,214
    	
 
    	
1/25/2011
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
POLYCARVE
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,508.691
    	
 
    	
12/21/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
POLYCARVE
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1144370
    	
 
    	
12/21/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
POLY-MAR HD
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/309,678
    	
 
    	
9/1/1992
    	
 
    	
1,785,556
    	
 
    	
8/3/1993
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
POLY-MARBLE HD
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/310,043
    	
 
    	
9/2/1992
    	
 
    	
1,781,445
    	
 
    	
7/13/1993
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Australia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1216438
    	
 
    	
12/18/2007
    	
 
    	
1216438
    	
 
    	
12/18/2007
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/255,010
    	
 
    	
7/9/2007
    	
 
    	
3,397,777
    	
 
    	
3/18/2008
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1,371,929
    	
 
    	
11/14/2007
    	
 
    	
TMA 741,441
    	
 
    	
6/4/2009
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Chile
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
802-327
    	
 
    	
1/9/2008
    	
 
    	
820.591
    	
 
    	
6/26/2008
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
China
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
6496593
    	
 
    	
1/7/2008
    	
 
    	
6496593
    	
 
    	
4/14/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
European Union
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
006552269
    	
 
    	
1/3/2008
    	
 
    	
006552269
    	
 
    	
10/8/2008
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
905544
    	
 
    	
1/7/2008
    	
 
    	
1036971
    	
 
    	
4/28/2008
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Russia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2007/740842
    	
 
    	
12/25/2007
    	
 
    	
374390
    	
 
    	
3/12/2009
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Turkey
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
2007/68973
    	
 
    	
12/26/2007
    	
 
    	
200768973
    	
 
    	
12/26/2008
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROCELL
    	
 
    	
Ukraine
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
m2008/00121
    	
 
    	
1/8/2008
    	
 
    	
109320
    	
 
    	
7/10/2009
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
RESISTALL
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/116,708
    	
 
    	
8/26/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
RESISTALL
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Mailed
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
RESISTALL
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Mailed
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    

 

S-15

 

	
Mark Name
    	
 
    	
Country
    	
 
    	
Case Type
    	
 
    	
Status
    	
 
    	
App. No.
    	
 
    	
App. Date
    	
 
    	
Reg. No.
    	
 
    	
Reg. Date
    	
 
    	
Current Record
   Owner/
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROTEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/396,884
    	
 
    	
6/1/1993
    	
 
    	
1,821,344
    	
 
    	
2/15/1994
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
REDLAND ROSE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
77/861,658
    	
 
    	
10/30/2009
    	
 
    	
3,892,035
    	
 
    	
12/21/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SANATEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/640,108
    	
 
    	
2/24/1995
    	
 
    	
1,951,251
    	
 
    	
1/23/1996
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS and Design Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
85/062,238
    	
 
    	
6/14/2010
    	
 
    	
3,908,051
    	
 
    	
1/18/2011
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS and Design Stylized
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,791
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS and Design   Stylized(Class 19)
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140105
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS and Design   Stylized(Class 20)
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140106
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
85/058,348
    	
 
    	
6/9/2010
    	
 
    	
3,871,769
    	
 
    	
11/2/2010
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,799
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS(Class 19)
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140102
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCRANTON PRODUCTS (Class 20)
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140103
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SEABOARD
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
1,212,045
    	
 
    	
4/2/2004
    	
 
    	
657,224
    	
 
    	
1/24/2006
    	
 
    	
Compression Polymers Corp.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SEDONA
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,631
    	
 
    	
10/30/2009
    	
 
    	
3,892,034
    	
 
    	
12/21/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SILVER OAK
    	
 
    	
United States
    	
 
    	
Intent to Use
    	
 
    	
Pending
    	
 
    	
77/861,684
    	
 
    	
10/30/2009
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TAHOE
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,478,847
    	
 
    	
4/28/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TAHOE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
77/861,643
    	
 
    	
10/30/2009
    	
 
    	
3,806,730
    	
 
    	
6/22/2010
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TERRA COLLECTION
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,479,039
    	
 
    	
4/29/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ULTRA WHITE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
78/757,958
    	
 
    	
11/21/2005
    	
 
    	
3,186,396
    	
 
    	
12/19/2006
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VINTEC
    	
 
    	
Australia
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
613823
    	
 
    	
10/14/1993
    	
 
    	
A613823
    	
 
    	
10/14/1993
    	
 
    	
Vycom Corp.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VINTEC
    	
 
    	
New Zealand
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
230947
    	
 
    	
10/11/1993
    	
 
    	
230947
    	
 
    	
10/11/1993
    	
 
    	
Vycom Corp.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VINTEC
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
74/396,882
    	
 
    	
6/1/1993
    	
 
    	
1,821,342
    	
 
    	
2/15/1994
    	
 
    	
AZEK Building Products, Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
85/058,299
    	
 
    	
6/9/2010
    	
 
    	
3,907,933
    	
 
    	
1/81/2011
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,786
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140104
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM OLEFIN & PVC SOLUTIONS and   Design Stylized
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
85/062,961
    	
 
    	
6/15/2010
    	
 
    	
3,908,054
    	
 
    	
1/18/2011
    	
 
    	
Scranton Products Inc.
    	
 
    

 

S-16

 

	
Mark Name
    	
 
    	
Country
    	
 
    	
Case Type
    	
 
    	
Status
    	
 
    	
App. No.
    	
 
    	
App. Date
    	
 
    	
Reg. No.
    	
 
    	
Reg. Date
    	
 
    	
Current Record
   Owner/
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM OLEFIN & PVC SOLUTIONS and   Design Stylized
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,790
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VYCOM OLEFIN & PVC SOLUTIONS and   Design Stylized
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1140107
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
WHERE QUALITY MEETS PERFORMANCE
    	
 
    	
United States
    	
 
    	
Regular
    	
 
    	
Registered
    	
 
    	
85/070,837
    	
 
    	
6/24/2010
    	
 
    	
3,908,104
    	
 
    	
1/18/2011
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
WHERE QUALITY MEETS PERFORMANCE
    	
 
    	
Canada
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
1,506,792
    	
 
    	
12/7/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
WHERE QUALITY MEETS PERFORMANCE
    	
 
    	
Mexico
    	
 
    	
Regular
    	
 
    	
Pending
    	
 
    	
0065362
    	
 
    	
12/9/2010
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Scranton Products Inc.
    	
 
    

 

S-17

 

SCHEDULE 8.12
 to
 INFORMATION CERTIFICATE

 

Subsidiaries; Investments; Joint Venture or Partnership

 

Subsidiary Ownership of Record

 

	
Current Legal Entity Owned
    	
 
    	
Record Owner
    	
 
    	
Percent Owned
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International Inc.
    	
 
    	
CPG International   Holdings LP
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I Inc.
    	
 
    	
CPG International   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products Inc.
    	
 
    	
CPG International I   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building Products, Inc.
    	
 
    	
CPG International I   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Procell Decking Inc.
    	
 
    	
AZEK Building   Products, Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Santana Products Inc.
    	
 
    	
Scranton Products   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG Sub I Corporation
    	
 
    	
CPG International I   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Vycom Corp.
    	
 
    	
CPG International I   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sanatec Sub I Corporation
    	
 
    	
Scranton Products   Inc.
    	
 
    	
100
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Canada Inc.
    	
 
    	
AZEK Building   Products, Inc.
    	
 
    	
100
    	
%
    

 

S-18

 

Equity Interests

 

 

 

 

	
Record Owner
    	
 
    	
Issuer
    	
 
    	
Type   of
   Organization
    	
 
    	
Number
   of Shares
   Owned
    	
 
    	
%   of
   Outstanding
   Shares
   Owned
    	
 
    	
Certificate
   No(s)
    	
 
    	
Par
   Value
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International   Inc. (fka Compression Polymers Holding II Corporation)
    	
 
    	
CPG International I   Inc. (fka Compression Polymers Holding Corporation)
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
2
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
Scranton Products   Inc. (fka Compression Polymers Corp.)
    	
 
    	
Corporation
    	
 
    	
100
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
AZEK Building   Products, Inc. (fka Vycom Corp.)
    	
 
    	
Corporation
    	
 
    	
100
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
Procell Decking Inc.
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Santana Products   Inc. (fka CPCapitol Acquisition Corp.)
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
4
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
CPG Sub I   Corporation
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CPG International I   Inc.
    	
 
    	
Vycom Corp.
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scranton Products   Inc.
    	
 
    	
Sanatec Sub I   Corporation
    	
 
    	
Corporation
    	
 
    	
10
    	
 
    	
100
    	
%
    	
3
    	
 
    	
.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AZEK Building   Products, Inc.
    	
 
    	
AZEK Canada Inc.
    	
 
    	
Corporation
    	
 
    	
—
    	
 
    	
100
    	
%
    	
—
    	
 
    	
—
    	
 
    

 

S-19

 

SCHEDULE 8.13
 to
 INFORMATION CERTIFICATE

 

Labor Matters

 

None.

 

S-20

 

SCHEDULE 8.15
 to
 INFORMATION CERTIFICATE

 

Material Contracts

 

A.            Lease:

 

1.             Lease Agreement between General Electric Capitol Corporation and AZEK Building Products, Inc., dated 5/19/06, re: (1) Krauss-Maffei Extrusion line at 888 North Keyser Avenue building.

 

2.             Lease Agreement between North Alabama Property Leasing Inc. and CPG International Inc., dated 1/31/07, re: building located at 11746 Foley Beach Express Foley, Al. 36536.

 

3.             Lease Agreement between Procell Decking Inc. and General Electric Capital Corporation, dated February 1, 2008, re: equipment located at 11746 Foley Beach Express, Foley, Al. 36536.

 

4.             Lease Agreement between AZEK Building Products, Inc. and North Keyser Partners, LLC dated December 27, 2004, re: 888 North Keyser Avenue, Scranton, Lackawanna County, Pennsylvania.

 

B.            Supply Agreements:

 

1.             Supply Agreement, dated January 1, 2010, by and between Shintech Incorporated and AZEK Building Products, Inc.

 

2.             Supply Agreement dated April 1, 2006 by and between Procell Decking Inc, and Americhem Inc.

 

3.             Supply Agreement dated January 1, 2010 by and between Azek Building Products Inc. and Formosa Plastics Corporation.

 

S-21

 

SCHEDULE 10.3
 to
 LOAN AND SECURITY AGREEMENT

 

Indebtedness

 

(i)            Indebtedness in connection with intercompany borrowing of $132.0 million by AZEK Building Products, Inc. formerly known as Vycom from CPG International I Inc., formerly known as Compression Polymers Holding Corporation.

 

(ii)           Indebtedness in connection with intercompany borrowing of $88.0 million by Scranton Products Inc., formerly known as Compression Polymers Corp. from CPG International I Inc., formerly known as Compression Polymers Holding Corporation.

 

(iii)          Indebtedness in connection with intercompany borrowing of $33.0 million by Procell Decking Inc. formerly known as VC Sub I Corporation from CPG International I Inc., formerly known as Compression Polymers Holding Corporation.

 

(iv)          Indebtedness in connection with intercompany borrowing of $33.5 million by Scranton Products Inc. from CPG International I Inc., formerly known as Compression Polymers Holding Corporation.

 

(v)           Purchase money Indebtedness and/or Capital Lease Obligations that gave rise to Permitted Liens listed in Schedule 8.4 to the Information Certificate.

 

S-22

 

SCHEDULE 10.4
 to
 LOAN AND SECURITY AGREEMENT

 

Loans and Advances

 

(i)            Loans and advances pursuant to Subordinated Intercompany Note by Procell Decking Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $33.0 million

 

(ii)           Loans and advances pursuant to Subordinated Intercompany Note by Scranton Products Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $33.5 million

 

(iii)          Loans and advances pursuant to Subordinated Intercompany Note by AZEK Building Products, Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $132.0 million

 

(iv)          Loans and advances pursuant to Subordinated Intercompany Note by Scranton Products Inc., as payor, in favor of CPG International I Inc., as payee, in the original principal amount of $88.0 million

 

(v)           Loans and advances pursuant to Subordinated Intercompany Note by CPG International Holdings LP, as payor, in favor of AZEK Building Products, Inc., as payee, in the outstanding principal amount as of the date hereof of $652,631.68

 

S-23

 

SCHEDULE 10.6
 to
 LOAN AND SECURITY AGREEMENT

 

Certain Transactions with Affiliates

 

1.     Lease Agreement between North Alabama Property Leasing Inc. and CPG International Inc., dated 1/31/07, re: building located at 11746 Foley Beach Express Foley, Al. 36536.

 

2.     Lease Agreement between AZEK Building Products, Inc. and North Keyser Partners, LLC dated December 27, 2004, re: 888 North Keyser Avenue, Scranton, Lackawanna County, Pennsylvania.

 

S-24

 

EXHIBIT D
 TO
 LOAN AND SECURITY AGREEMENT

 

Form of Compliance Certificate

 

To:          Credit Suisse AG, Cayman Islands Branch

 

Ladies and Gentlemen:

 

I hereby certify to you pursuant to Section 9.6 of the Loan Agreement (as defined below) as follows:

 

1.             I am the duly elected Chief Financial Officer of CPG International, Inc., a Delaware corporation (“Parent”).  Capitalized terms used herein without definition shall have the meanings given to such terms in the Loan and Security Agreement, dated February [    ], 2011, by and among Credit Suisse AG, Cayman Islands Branch, as administrative agent for the financial institutions party thereto as lenders (in such capacity, “Administrative Agent”), Wells Fargo Capital Finance, LLC, in its capacity as collateral agent thereunder, the financial institutions party thereto as lenders (collectively, “Lenders”), Parent and certain of its affiliates (as such Loan and Security Agreement is amended, modified or supplemented, from time to time, the “Loan Agreement”).

 

2.             I have reviewed the terms of the Loan Agreement, and have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and the financial condition of Borrowers and Guarantors, during the immediately preceding fiscal month.

 

3.             The review described in Section 2 above did not disclose the existence during or at the end of such fiscal month, and I have no knowledge of the existence and continuance on the date hereof, of any condition or event which constitutes a Default or an Event of Default, except as set forth on Schedule I attached hereto.  Described on Schedule I attached hereto are the exceptions, if any, to this Section 3 listing, in detail, the nature of the condition or event, the period during which it has existed and the action which any Borrower or Guarantor has taken, is taking, or proposes to take with respect to such condition or event.

 

4.             I further certify that, based on the review described in Section 2 above, no Borrower or Guarantor has at any time during or at the end of such fiscal month, except as specifically described on Schedule II attached hereto or as permitted by the Loan Agreement, done any of the following:

 

(a)           Changed its respective corporate name, or transacted business under any trade name, style, or fictitious name, other than those previously described to you and set forth in the Financing Agreements.

 

(b)           Changed the location of its chief executive office, changed its jurisdiction of incorporation, changed its type of organization or changed the location of or disposed of any of its properties or assets (other than pursuant to the sale of Inventory in the ordinary course of its business or as otherwise permitted by Section 10.1 of the Loan Agreement), or established any new asset locations.

 

1

 

(c)           Materially changed the terms upon which it sells goods (including sales on consignment) or provides services, nor has any vendor or trade supplier to any Borrower or Guarantor during or at the end of such period materially adversely changed the terms upon which it supplies goods to any Borrower or Guarantor.

 

(d)           Permitted or suffered to exist any security interest in or liens on any of its properties, whether real or personal, other than as specifically permitted in the Financing Agreements.

 

(e)           Received any notice of, or obtained knowledge of any of the following not previously disclosed to Administrative Agent:  (i) the occurrence of any event involving the release, spill or discharge of any Hazardous Material in violation of applicable Environmental Law in a material respect or (ii) any investigation, proceeding, complaint, order, directive, claims, citation or notice with respect to: (A) any non-compliance with or violation of any applicable Environmental Law by any Borrower or Guarantor in any material respect or (B) the release, spill or discharge of any Hazardous Material in violation of applicable Environmental Law in a material respect or (C) the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials in violation of applicable Environmental Laws in a material respect or (D) any other environmental, health or safety matter, which has a material adverse effect on any Borrower or Guarantor or its business, operations or assets or any properties at which such Borrower or Guarantor transported, stored or disposed of any Hazardous Materials.

 

(f)            Become aware of, obtained knowledge of, or received notification of, any breach or violation of any material covenant contained in any instrument or agreement in respect of Indebtedness for money borrowed by any Borrower or Guarantor.

 

5.             Attached hereto as Schedule III are the calculations used in determining, as of the end of such fiscal month whether Borrowers and Guarantors are or would be in compliance with the covenants set forth in Section 11 of the Loan Agreement for such fiscal month, whether or not such compliance is required under the terms thereof and with the covenants set forth in Section 11 of the Loan Agreement for such fiscal month.

 

The foregoing certifications are made and delivered this day of                       , 20    .

 

	
 
    	
CPG INTERNATIONAL   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    

 

2

 

EXHIBIT E
 TO
 LOAN AND SECURITY AGREEMENT

 

Commitments

 

	
Lender
    	
 
    	
Commitment
    	
 
    
	
Credit Suisse AG, Cayman Islands Branch
    	
 
    	
$
    	
15,000,000
    	
 
    
	
UBS Loan Finance LLC 
    	
 
    	
$
    	
15,000,000
    	
 
    
	
Wells Fargo Capital Finance, LLC
    	
 
    	
$
    	
35,000,000
    	
 
    
	
Total
    	
 
    	
$
    	
65,000,000
    	
 
    

 

 

EXHIBIT F
 TO
 LOAN AND SECURITY AGREEMENT

 

Form ABL/Term Loan Intercreditor Agreement

 

 

ABL/TERM LOAN INTERCREDITOR AGREEMENT

 

among

 

CPG INTERNATIONAL I INC.
 SCRANTON PRODUCTS INC.
 AZEK BUILDING PRODUCTS, INC.
 PROCELL DECKING INC.
 as Borrowers

 

CPG INTERNATIONAL INC.
 SANTANA PRODUCTS INC.
 CPG SUB I CORPORATION
 VYCOM CORP.

 

SANATEC SUB I CORPORATION
 as Guarantors,

 

WELLS FARGO CAPITAL FINANCE, LLC,
 as the ABL Agent,

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
 as the Term Loan Agent,

 

and

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
 as the Control Agent

 

 

Dated as of February 18, 2011

 

 

TABLE OF CONTENTS

 

	
SECTION 1 DEFINITIONS
    	
2
    
	
1.1
    	
Defined Terms
    	
2
    
	
 
    	
 
    	
 
    
	
SECTION 2 Lien Priorities
    	
14
    
	
2.1
    	
Scope of Collateral
    	
13
    
	
2.2
    	
Priority
    	
13
    
	
2.3
    	
Failure to Perfect
    	
15
    
	
2.4
    	
Prohibition on   Contesting Liens
    	
15
    
	
2.5
    	
New Liens
    	
15
    
	
 
    	
 
    	
 
    
	
SECTION 3 Enforcement
    	
15
    
	
3.1
    	
Enforcement
    	
15
    
	
3.2
    	
Actions Upon Breach
    	
18
    
	
3.3
    	
Access to Books and   Records
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 4 Payments
    	
19
    
	
4.1
    	
Application of   Proceeds
    	
19
    
	
4.2
    	
Payment Turnover
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 5 Other Agreements
    	
20
    
	
5.1
    	
Releases
    	
20
    
	
5.2
    	
Insurance
    	
22
    
	
5.3
    	
Control Agent for Perfection
    	
23
    
	
5.4
    	
Access to Real   Estate Collateral
    	
26
    
	
5.5
    	
Amendments to ABL   Credit Documents and Term Loan Credit Documents
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 6 Insolvency or Liquidation Proceedings
    	
28
    
	
6.1
    	
Use of Cash   Collateral and Financing Issues
    	
28
    
	
6.2
    	
Sale Issues
    	
29
    
	
6.3
    	
Relief from the   Automatic Stay
    	
29
    
	
6.4
    	
Adequate Protection
    	
29
    
	
6.5
    	
Separate Grants of   Security and Separate Classification
    	
30
    
	
6.6
    	
Post-Petition Claims
    	
30
    
	
6.7
    	
Avoidance Issues
    	
31
    
	
6.8
    	
Expense Claims
    	
31
    
	
6.9
    	
Effectiveness in   Insolvency or Liquidation Proceedings
    	
31
    
	
 
    	
 
    	
 
    
	
SECTION 7 Reliance; Waivers; Etc.
    	
31
    
	
7.1
    	
Non-Reliance
    	
31
    
	
7.2
    	
No Warranties or   Liability
    	
32
    
	
7.3
    	
No Waiver of Lien   Priorities
    	
32
    
	
7.4
    	
Obligations   Unconditional
    	
34
    
	
7.5
    	
Certain Notices
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 8 Miscellaneous
    	
35
    
	
8.1
    	
Conflicts
    	
35
    
	
8.2
    	
Effectiveness;   Continuing Nature of this Agreement; Severability
    	
35
    

 

i

 

	
8.3
    	
Amendments; Waivers
    	
35
    
	
8.4
    	
Information   Concerning Financial Condition of Grantors and their Subsidiaries
    	
36
    
	
8.5
    	
Subrogation
    	
36
    
	
8.6
    	
Governing Law;   Choice of Forum; Service of Process; Jury Trial Waiver
    	
36
    
	
8.7
    	
Notices
    	
37
    
	
8.8
    	
Further Assurances
    	
38
    
	
8.9
    	
Binding on   Successors and Assigns
    	
38
    
	
8.10
    	
Headings
    	
38
    
	
8.11
    	
Counterparts
    	
38
    
	
8.12
    	
Authorization
    	
38
    
	
8.13
    	
No Third Party Beneficiaries
    	
38
    
	
8.14
    	
Provisions Solely to   Define Relative Rights
    	
38
    
	
8.15
    	
Additional Grantors
    	
38
    

 

ii

 

ABL/TERM LOAN INTERCREDITOR AGREEMENT

 

This ABL/Term Loan Intercreditor Agreement is dated as of February 18, 2011 and entered into by and among CPG INTERNATIONAL I INC., a Delaware corporation (“CPG I”), SCRANTON PRODUCTS, INC., a Delaware corporation (“Scranton”), AZEK BUILDING PRODUCTS, INC., a Delaware corporation (“AZEK”), PROCELL DECKING INC., a Delaware corporation (“Procell”, and together with CPG I, Scranton and AZEK, each individually a “Borrower” and collectively, “Borrowers” as hereinafter defined), CPG INTERNATIONAL INC., a Delaware corporation (“Parent”), SANTANA PRODUCTS INC., a Delaware corporation (“Santana”), CPG SUB I CORPORATION, a Delaware Corporation (“Sub I”), VYCOM CORP., a Delaware corporation (“Vycom”) and SANATEC SUB I CORPORATION, a Delaware corporation (“Sanatec”, and together with Parent, Santana, Sub I, and Vycom, each individually a “Guarantor” and collectively “Guarantors”, and the “Guarantors”, together with the Borrowers, each individually a “Grantor” and collectively, together with any Guarantors formed or acquired after the date hereof, the “Grantors”), WELLS FARGO CAPITAL FINANCE, LLC, in its capacity as collateral agent for the ABL Lenders (as defined below) and other Secured Parties under and as defined in the ABL Credit Agreement (as defined below) (in such capacity, together with any successors and assigns, the “ABL Agent”), CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, in its capacity as collateral agent for the Term Loan Lenders (as defined below) and other Secured Parties under and as defined in the Term Loan Credit Agreement (as defined below) (in such capacity, together with any successors and assigns, the “Term Loan Agent”) and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, in its capacity as control agent for the ABL Agent and the Term Loan Agent.

 

RECITALS:

 

WHEREAS, the Grantors, the financial institutions from time to time party thereto as lenders (collectively, the “ABL Lenders”) and the ABL Agent are parties to that certain Loan and Security Agreement dated as of February 18, 2011 (the “Initial ABL Credit Agreement”), pursuant to which the ABL Lenders shall make a revolving credit facility available to certain of the Borrowers secured by a first Lien on the ABL Priority Collateral and a second lien on the Term Loan Priority Collateral;

 

WHEREAS, the Grantors, the financial institutions from time to time party thereto as lenders (collectively, the “Term Loan Lenders”) and the Term Loan Agent are parties to that certain Term Loan and Security Agreement dated as of February 18, 2011 (the “Initial Term Loan Credit Agreement”), pursuant to which the Term Loan Lenders shall make a term loan credit facility available to the Borrowers secured by a second Lien on the ABL Priority Collateral and a first lien on the Term Loan Priority Collateral; and

 

WHEREAS, the ABL Agent, for and on behalf of the ABL Claimholders, and the Term Loan Agent, for and on behalf of the Term Loan Claimholders, desire to enter into this Agreement to (i) confirm the relative priorities of their respective Liens in the assets and properties of the Grantors and (ii) provide for the orderly sharing among them, in accordance with such priorities, of the Proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1

 

SECTION I

 

DEFINITIONS

 

A.            Defined Terms.  As used in this Agreement, the following terms shall have the following meanings:

 

“ABL Agent”  has the meaning set forth in the introductory paragraph of this Agreement and shall include any “Collateral Agent” under and as defined in any ABL Credit Agreement then in existence.

 

“ABL Bank Product Provider” shall mean any “Bank Product Provider”, as such term is defined in the ABL Credit Agreement and shall include any similar term in the ABL Credit Agreement then in existence.

 

“ABL Claimholders”  shall mean, at any relevant time, the holders of ABL Obligations at such time, including without limitation the ABL Lenders, the ABL Agent and any other agent under the ABL Credit Agreement, and including, in the case of Bank Products, ABL Bank Product Providers.

 

“ABL Collateral Documents”  shall mean the ABL Credit Agreement and any other agreement, document or instrument pursuant to which a Lien is granted securing any ABL Obligations or under which rights or remedies with respect to such Liens are governed.

 

“ABL Credit Agreement” shall mean  (a) the Initial ABL Credit Agreement (as defined in the recitals hereto) and (b) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or Instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, increase (subject to the limitations set forth herein), or Refinance in whole or in part the Indebtedness and other obligations outstanding under the (i) Initial ABL Credit Agreement or (ii) any subsequent ABL Credit Agreement (as amended, restated, supplemented or modified from time to time), unless such agreement or Instrument expressly provides that it is not intended to be and is not an ABL Credit Agreement hereunder.  Any reference to the ABL Credit Agreement hereunder shall be deemed a reference to any ABL Credit Agreement then in existence.

 

“ABL Credit Documents”  shall mean the ABL Credit Agreement and the other Financing Agreements (as defined in the ABL Credit Agreement and including any similar term used in the ABL Credit Agreement then in existence), any agreement, document and Instrument providing for or evidencing the Bank Product Debt and each of the other agreements, documents and Instruments providing for or evidencing any other ABL Obligation, and any other document or Instrument executed or delivered at any time in connection with any ABL Obligations, including any intercreditor or joinder agreement among holders of ABL Obligations, to the extent such agreements are effective at the relevant time, as each may be modified from time to time.

 

“ABL Enforcement Date” shall mean the date which is 90  days after the occurrence of (i) an Event of Default (under and as defined in the ABL Credit Agreement) and the demand by the ABL Agent for the payment of the ABL Obligations under the ABL Credit Documents and (ii) the ABL Agent’s receipt of written notice from the Term Loan Agent certifying that an Event of Default (under and as defined in the Term Loan Credit Agreement) has occurred and is continuing and that the demand for the payment of the Term Loan Obligations under the Term Loan Credit Documents has been made; provided that the ABL Enforcement Date shall be stayed and thereby deemed not to have occurred (1) at any time that the Term Loan Agent or any of the Term Loan Claimholders have commenced and are then diligently

 

2

 

pursuing any Enforcement Action with respect to all or a material portion of the Term Loan Priority Collateral, (2) at any time any Grantor is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding or (3) if the acceleration of the ABL Obligations under the ABL Credit Documents is rescinded in accordance with the terms of the ABL Credit Agreement.

 

“ABL Lenders”  shall mean any “Lender” as such term is defined in the ABL Credit Agreement.

 

“ABL Obligations”  shall mean any and all loans, letter of credit obligations and all other obligations, liabilities and Indebtedness of every kind, nature and description owing by any Grantor under or in respect of (a) the ABL Credit Agreement, (b) the other ABL Credit Documents, (c) Bank Products with ABL Bank Product Providers and (d) all Guaranty Obligations, fees, expenses, indemnities and other amounts payable from time to time pursuant to the ABL Credit Documents, in each case whether or not allowed or allowable in an Insolvency or Liquidation Proceeding;  provided that the aggregate principal amount of, without duplication, any revolving credit commitments, revolving credit loans, letters of credit, term loans, bonds, debentures, notes or similar Instruments (excluding, in any event, Bank Product Debt and any indemnity and expense reimbursement obligations) issued under the ABL Credit Agreement or any other ABL Credit Document (or any Refinancing, extension or increase thereof) in excess of $110,000,000 (the “Maximum ABL Obligations”), shall not constitute ABL Obligations for purposes of this Agreement.  “ABL Obligations” shall include (i) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) in accordance with the rate specified in the relevant ABL Credit Document and (ii) all fees, costs and charges incurred in connection with the ABL Credit Documents and provided for thereunder, in the case of each of clause (i) and clause (ii) whether before or after commencement of an Insolvency or Liquidation Proceeding and irrespective of whether any claim for such interest, fees, costs or charges is allowed as a claim in such Insolvency or Liquidation Proceeding.

 

“ABL Priority Collateral” shall mean, collectively, all present and future (to the extent constituting Collateral):

 

(a)           Accounts of the Grantors;

 

(b)           Inventory of the Grantors;

 

(c)           to the extent evidencing, governing, secured or otherwise related to or constituting Proceeds of Accounts of the Grantors or Inventory of the Grantors, all General Intangibles, Chattel Paper, Instruments, Investment Property, books and Records of the Grantors;

 

(d)           all Deposit Accounts of the Grantors (other than identifiable Cash Proceeds in respect of the Term Loan Priority Collateral and other than the Term Loan Priority Account);

 

(e)           to the extent relating to Accounts of the Grantors or Inventory of the Grantors, Letter-of-Credit Rights, Supporting Obligations and Commercial Tort Claims of the Grantors;

 

(f)            Payment Intangibles of the Grantors, other than any Payment Intangibles that represent tax refunds in respect of or otherwise related to Term Loan Priority Collateral;

 

(g)           Indebtedness owed to Parent or any of its Subsidiaries that arises from cash advances made after the date hereof to enable the obligor(s) thereon to acquire Inventory;

 

3

 

(h)           collection accounts, Deposit Accounts and Commodity Accounts of the Grantors and any cash, Investment Property or other assets in such accounts (other than identifiable Cash Proceeds in respect of Term Loan Priority Collateral and other than the Term Loan Priority Account);

 

(i)            cash and Cash Equivalents (as defined in the ABL Credit Agreement) of the Grantors, other than cash and Cash Equivalents (as defined in the ABL Credit Agreement) that are identifiable Cash Proceeds of Term Loan Priority Collateral and other than cash and Cash Equivalents (as defined in the ABL Credit Agreement) that are held in the Term Loan Priority Account;

 

(j)            books and Records pertaining to any of the foregoing; and

 

(k)           accessions to, substitutions for and replacements, products and Proceeds (including insurance proceeds) of the Property and assets described in the foregoing clauses (a) through (j).

 

“ABL Priority Collateral Disposition” has the meaning set forth in Section 5.1(a)(ii).

 

“ABL Priority Collateral Exercise of Remedies” has the meaning set forth in Section 5.1(a)(i)

 

“ABL Priority Collateral Subordinated Lien Release” has the meaning set forth in Section 5.1(a).

 

“Accounts” shall mean, as to any Grantor, all present and future rights of such Person to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by Chattel Paper or an Instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information contained on or for use with such card.

 

“Affiliate” shall mean, with respect to a specified Person, any other Person which directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person, and without limiting the generality of the foregoing, includes (a) any Person which beneficially owns or holds ten percent (10%) or more of any class of Voting Stock of such Person or other equity interests in such Person, (b) any Person of which such Person beneficially owns or holds ten percent (10%) or more of any class of Voting Stock or in which such Person beneficially owns or holds ten percent (10%) or more of the equity interests and (c) any director or executive officer of such Person.  For the purposes of this definition, the term “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise.

 

“Agent” shall mean the ABL Agent or the Term Loan Agent, as applicable.

 

“Aggregate Principal Exposure” shall mean that the aggregate principal amount of, without duplication, any issued but undrawn letters of credit, any reimbursement obligations for drawn letters of credit, term loans, revolving loans, bonds, debentures, notes or similar Instruments (excluding, in any event, Bank Product Debt) issued under the ABL Credit Documents or the Term Loan Credit Documents, as applicable.

 

4

 

“Agreement”  shall mean this Agreement, as amended, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof.

 

“Bank Product” has the meaning set forth in the ABL Credit Agreement and shall include any similar term under the ABL Credit Agreement then in existence.

 

“Bank Product Debt” of any Person shall mean the Indebtedness and other obligations of such Person pursuant to any Bank Products.

 

“Bankruptcy Code”  shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“Bankruptcy Law”  shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Borrowers” has the meaning set forth in the introductory paragraph of this Agreement.

 

“Business Day”  shall mean any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the laws of the State of New York.

 

“Capital Lease” shall mean, as applied to any Person, any lease of (or any agreement conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee which in accordance with GAAP, is required to be reflected as a liability on the balance sheet of such Person.

 

“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock).

 

“Cash Proceeds” has the meaning set forth in the UCC.

 

“Certificated Security” has the meaning set forth in the UCC.

 

“Chattel Paper” has the meaning set forth in the UCC.

 

“Claimholders” shall mean the Term Loan Claimholders and the ABL Claimholders.

 

“Code”  shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

 

“Collateral”  shall mean all of the assets and property of any Grantor, whether real, personal or mixed, tangible or intangible, with respect to which a Lien is granted, or required to be granted, as security for any ABL Obligations or Term Loan Obligations.

 

“Commercial Tort Claim” has the meaning set forth in the UCC.

 

5

 

“Commodity Account” has the meaning set forth in the UCC.

 

“Control Agent”  has the meaning set forth in Section 5.3(a).

 

“Control Collateral” shall mean any Collateral consisting of any Certificated Security, Instrument, Deposit Accounts and cash.

 

“Controlled Account” shall mean those certain Deposit Accounts of any Grantor subject to Liens under the terms of the ABL Collateral Documents and the Term Loan Collateral Documents.

 

“Credit Documents” shall mean the Term Loan Credit Documents and the ABL Credit Documents.

 

“Deposit Account” has the meaning set forth in the UCC.

 

“DIP Financing”  has the meaning set forth in Section 6.1.

 

“Discharge of ABL Obligations”  shall mean (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such interest is, or would be, allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the ABL Credit Documents and termination of all commitments to lend or otherwise extend credit under the ABL Credit Documents, (b) payment in full in cash of all other ABL Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including legal fees and other expenses, costs or charges accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such fees, expenses, costs or charges is, or would be, allowed in such Insolvency or Liquidation Proceeding), (c) termination, cancellation or cash collateralization (in an amount reasonably satisfactory to the ABL Agent) of all letters of credit issued under the ABL Credit Documents and (d) termination or cash collateralization (in an amount reasonably satisfactory to the applicable ABL Bank Product Provider) of any Bank Products (to the extent that the obligations under such Bank Products constitute ABL Obligations) and the payment in full in cash of all Bank Product Debt (to the extent such Bank Product Debt constitutes ABL Obligations), subject, with respect to the aggregate amount of the items set forth in the foregoing clauses (a) through (d), to the limitations set forth in the definition of Maximum ABL Obligations.

 

“Discharge of Term Loan Obligations” shall mean (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such interest is, or would be, allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the Term Loan Credit Documents and termination of all commitments to lend or otherwise extend credit under the Term Loan Credit Documents, (b) payment in full in cash of all other Term Loan Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including legal fees and other expenses, costs or charges accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such fees, expenses, costs or charges is, or would be, allowed in such Insolvency or Liquidation Proceeding) and (c) termination, cancellation or cash collateralization (in an amount reasonably satisfactory to the Term Loan Agent) of all letters of credit issued under the Term Loan Credit Documents.

 

“Disqualified Equity Interests” has the meaning set forth in the ABL Credit Agreement or the Term Loan Credit Agreement, as applicable.

 

6

 

“Document” has the meaning set forth in the UCC.

 

“Domestic Subsidiaries” shall mean, with respect to any Person, any Subsidiary of such Person which is incorporated or organized under the laws of any state of the United States or the District of Columbia, other than any direct or indirect Subsidiary of a Foreign Subsidiary.

 

“Electronic Chattel Paper” has the meaning set forth in the UCC.

 

“Enforcement Action” shall mean the exercise of any rights or remedies against any Collateral, including, without limitation, any right to take possession or control of any Collateral under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement, any right of set-off or recoupment and any enforcement, collection, execution, levy or foreclosure action or proceeding taken against the Collateral.  With respect to the ABL Agent, none of the following actions, unless taken in connection with another action described in the previous sentence, shall be deemed to constitute an Enforcement Action: (a) the notification of account debtors of one or more Grantors and/or the collection of any amounts, directly or indirectly, from such account debtors or (b) the exercise of dominion or control over any bank account, collection account, concentration account or investment account of any one or more of the Grantors and/or the receipt by the ABL Agent of, or the recourse of the ABL Agent to, any amounts or other assets at any time contained in any of the foregoing (including the actions of the ABL Agent pursuant to Section 6.6(c) of the ABL Credit Agreement or any similar provisions in the ABL Credit Agreement then in existence, upon the occurrence of a Cash Dominion Event (as defined in the ABL Credit Agreement) or a similar event under the ABL Credit Agreement then in existence).

 

“Equipment” has the meaning set forth in the UCC.

 

“Fixtures” has the meaning set forth in the UCC.

 

“Foreign Subsidiary” shall mean, with respect to any Person, any Subsidiary of such Person which is not a Domestic Subsidiary.

 

“GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently applied.

 

“General Intangible” has the meaning set forth in the UCC.

 

“Goods” has the meaning set forth in the UCC.

 

“Grantors”  has the meaning set forth in the introductory paragraph of this Agreement.

 

“Guaranty Obligations” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable Instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including

 

7

 

without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (c) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof.  The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

 

“Hedge Agreement” shall mean a swap agreement as such term is defined in 11 U.S.C. Section 101, and including any rate swap agreement, basis swap, forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option, and any other similar agreement (including any option to enter into any of the foregoing or a master agreement for any the foregoing together with all supplements thereto) entered into for the purpose of protecting against or managing exposure to fluctuations in interest or exchange rates, currency valuations or commodity prices; sometimes being collectively referred to herein as “Hedge Agreements”.

 

“Indebtedness” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (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 or accrued, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person which are due six (6) months or more from the date after such property is acquired or such services are completed, and including, without limitation, customary indemnification, adjustment of purchase price or similar obligations, earn-outs or other similar obligations, in each case, incurred in connection with a Permitted Acquisition or Permitted Disposition (but excluding trade debt and accrued expenses incurred in the ordinary course of business on normal trade terms and not overdue by more than ninety (90) days) which would appear as liabilities on a balance sheet of such Person in accordance with GAAP, (f) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (g) 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 security interest in, lien or other encumbrance upon, or payable out of the proceeds of production from property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (h) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (i) the principal portion of all obligations of such Person under Capital Leases, (j) all obligations of such Person under Hedge Agreements, (k) the maximum amount of all standby letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (l) all preferred Capital Stock issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration prior to the date which is ninety-one (91) days after the Maturity Date and other Disqualified Equity Interests, (m) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product and (n) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer, but only to the extent such Person is liable for such Indebtedness.

 

“Initial ABL Credit Agreement”  has the meaning set forth in the recitals hereto.

 

8

 

“Initial Term Loan Credit Agreement”  has the meaning set forth in the recitals hereto.

 

“Insolvency or Liquidation Proceeding”  shall mean any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other Bankruptcy Law or insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

 

“Instrument” has the meaning set forth in the UCC.

 

“Intellectual Property” shall mean, as to each Grantor, such Grantor’s now owned and hereafter arising or acquired: patents, patent rights, patent applications, copyrights, works which are the subject matter of copyrights, copyright applications, copyright registrations, trademarks, servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and rights to use any of the foregoing and all applications, registrations and recordings relating to any of the foregoing as may be filed in the United States Copyright Office, the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, any political subdivision thereof or in any other country or jurisdiction, together with all rights and privileges arising under applicable law with respect to any Grantor’s use of any of the foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing; all rights to sue for past, present and future infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating standards; goodwill (including any goodwill associated with any trademark or servicemark, or the license of any trademark or servicemark); customer and other lists in whatever form maintained; trade secret rights, copyright rights, rights in works of authorship, domain names and domain name registration; software and contract rights relating to computer software programs, in whatever form created or maintained.

 

“Inventory” has the meaning set forth in the UCC, including all Goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such Goods, or otherwise used or consumed in the Grantors’ business.

 

“Investment Property” has the meaning set forth in the UCC.

 

“Letter-of-Credit Right” has the meaning set forth in the UCC.

 

“License Agreement” shall mean any agreement or other arrangement of any Grantor or any Subsidiary thereof pursuant to which such Grantor or Subsidiary has a license or other right to use any trademarks, logos, designs, representations or other Intellectual Property, material to the business of the Grantor and its Subsidiaries taken as a whole, owned by another person.

 

“Lien”  shall mean any mortgage, pledge, hypothecation, collateral assignment, security deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), hypothec, preference, priority, or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement filed under the UCC as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

 

9

 

“Maturity Date” has the meaning set forth in the ABL Credit Agreement or the Term Loan Credit Agreement, as applicable, and shall include a similar term under the ABL Credit Agreement or the Term Loan Credit Agreement then in existence.

 

“Maximum ABL Obligations” has the meaning set forth in the definition of ABL Obligations.

 

“Maximum Term Loan Obligations” has the meaning set forth in the definition of Term Loan Obligations.

 

“Obligations”  shall mean Term Loan Obligations or the ABL Obligations, as applicable.

 

“Payment Intangible” has the meaning set forth in the UCC.

 

“Person”  shall mean any individual, sole proprietorship, partnership, corporation (including any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

 

“Priority Agent” shall mean, with respect to the ABL Priority Collateral, the ABL Agent and, with respect to the Term Loan Priority Collateral, the Term Loan Agent.

 

“Priority Claimholders” shall mean, with respect to the ABL Priority Collateral, the ABL Claimholders and, with respect to the Term Loan Priority Collateral, the Term Loan Claimholders.

 

“Priority Collateral” shall mean, with respect to the ABL Agent and the other ABL Claimholders, the ABL Priority Collateral and, with respect to the Term Loan Agent and the other Term Loan Claimholders, the Term Loan Priority Collateral.

 

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

 

“Proceeds” has the meaning set forth in the UCC.

 

“Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Grantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all Payment Intangibles; (d) letters of credit, indemnities, guarantees, security or other deposits and Proceeds thereof issued payable to such Grantor or otherwise in favor of or delivered to such Grantor in connection with any Account; or Inventory or (e) all other accounts and other forms of obligations owing to any Grantor arising from the sale or lease of Inventory or Accounts or the rendition of services.

 

“Real Property Collateral”  shall mean any and all present and future real Property (whether owned or leased) and Fixtures of the Grantors.

 

“Records” shall mean, as to each Grantor, all of such Grantor’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of any Grantor with respect to the foregoing maintained with or by any other person).

 

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“Recovery”  has the meaning set forth in Section 6.7.

 

“Refinance”  shall mean, in respect of any Indebtedness, to refinance, replace or repay, or to issue other Indebtedness, in exchange or replacement for, such Indebtedness.  “Refinanced”  and “Refinancing”  shall have correlative meanings.

 

“Required Lenders” shall mean with respect to the ABL Credit Agreement or the Term Loan Credit Agreement, as applicable, those ABL Lenders or Term Loan Lenders, as applicable, the approval of which is required to approve an amendment or modification of, termination or waiver of any provision of or consent to any departure from the ABL Credit Agreement or the Term Loan Credit Agreement (or would be required to effect such consent under this Agreement if such consent were treated as an amendment of the ABL Credit Agreement or the Term Loan Credit Agreement) as applicable.

 

“Subsidiary”  shall mean, with respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more subsidiaries of such Person.

 

“Supporting Obligation” has the meaning set forth in the UCC.

 

“Term Loan Agent”  has the meaning set forth in the introductory paragraph of this Agreement and shall include any “Collateral Agent” under and as defined in any Term Loan Credit Agreement then in existence.

 

“Term Loan Claimholders”  shall mean, at any relevant time, the holders of Term Loan Obligations at such time, including without limitation the Term Loan Lenders, the Term Loan Agent and any other agent under the Term Loan Credit Agreement.

 

“Term Loan Collateral Documents”  shall mean the Term Loan Credit Agreement and any other agreement, document or instrument pursuant to which a Lien is granted securing any Term Loan Obligations or under which rights or remedies with respect to such Liens are governed.

 

“Term Loan Credit Agreement” shall mean (a) the Initial Term Loan Credit Agreement (as defined in the recitals hereto) and (b) any one or more other credit agreements, loan agreements, note agreements, promissory notes, indentures or other agreements or Instruments evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, increase or add to (subject to the limitations set forth herein), or Refinance in whole or in part the Indebtedness and other obligations outstanding under the Initial Term Loan Credit Agreement or any subsequent Term Loan Credit Agreement (as amended, restated, supplemented or modified from time to time), unless such agreement or Instrument expressly provides that it is not intended to be and is not a Term Loan Credit Agreement hereunder.  Any reference to the Term Loan Credit Agreement hereunder shall be deemed a reference to any Term Loan Credit Agreement then in existence.  For the avoidance of doubt, any agreement, document or Instrument governing Specified Refinancing Indebtedness or Permitted Other Indebtedness (each as defined in the Term Loan Credit Agreement) or any other Indebtedness permitted under the ABL Credit Agreement to be secured by Liens on the Term Loan Priority Collateral that are

 

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prior to the Liens on the Term Loan Priority Collateral securing the ABL Obligations may constitute a Term Loan Credit Agreement hereunder.

 

“Term Loan Credit Documents”  shall mean the Term Loan Credit Agreement, the other Financing Agreements (as defined in the Term Loan Credit Agreement and including any similar term used in the Term Loan Credit Agreement then in existence) and any other document or Instrument executed or delivered at any time in connection with any Term Loan Obligations, including any intercreditor or joinder agreement among holders of Term Loan Obligations, to the extent such are effective at the relevant time, as each may be modified from time to time in accordance with this Agreement.

 

“Term Loan Enforcement Date” shall mean the date which is 90  days after the occurrence of (i) an Event of Default (under and as defined in the Term Loan Credit Agreement) and the demand by the Term Loan Agent for the payment of the Term Loan Obligations under the Term Loan Credit Documents and (ii) the Term Loan Agent’s receipt of written notice from the ABL Agent certifying that an Event of Default (under and as defined in the ABL Credit Agreement) has occurred and is continuing and that the demand for the payment of the ABL Obligations under the ABL Credit Documents has been made; provided that the Term Loan Enforcement Date shall be stayed and thereby deemed not to have occurred (1) at any time that the ABL Agent or the ABL Claimholders have commenced and are then diligently pursuing any Enforcement Action with respect to all or a material portion of the ABL Priority Collateral, (2) at any time any Grantor is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding or (3) if the acceleration of the Term Loan Obligations under the Term Loan Credit Documents is rescinded in accordance with the terms of the Term Loan Credit Agreement.

 

“Term Loan Lenders”  has the meaning set forth in the recitals hereto.

 

“Term Loan Obligations”  shall mean all Term Loan Obligations outstanding under (i) the Term Loan Credit Agreement, (ii) the other Term Loan Credit Documents, and (iii) all Guaranty Obligations, fees, expenses, indemnities and other amounts payable from time to time pursuant to the Term Loan Credit Documents, in each case whether or not allowed or allowable in an Insolvency or Liquidation Proceeding; provided that the aggregate principal amount of any term loan issued under the Term Loan Credit Agreement or any other Term Loan Credit Document (or any Refinancing, extension or increase thereof) (excluding, in any event, any indemnity and expense reimbursement obligations) in excess of $390,500,000 (the “Maximum Term Loan Obligations”) shall not constitute Term Loan Obligations for purposes of this Agreement.  “Term Loan Obligations” shall include (x) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) in accordance with the rate specified in the relevant Term Loan Credit Document and (y) all reasonable fees, costs and charges incurred in connection with the Term Loan Credit Documents and provided for thereunder, in the case of each of clause (x) and clause (y) whether before or after commencement of an Insolvency or Liquidation Proceeding, and irrespective of whether any claim for such interest, fees, costs or charges is allowed as a claim in such Insolvency or Liquidation Proceeding.

 

“Term Loan Priority Account” shall mean that certain Deposit Account of the Grantors subject to a blocked account control agreement in favor of the Control Agent on behalf of the Term Loan Agent and the ABL Agent in which solely the proceeds of Term Loan Priority Collateral are maintained.

 

“Term Loan Priority Collateral” shall mean:

 

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(a)           all Collateral (including the Term Loan Priority Account and any and all assets held therein or credited thereto) other than ABL Priority Collateral; and

 

(b)           all Proceeds (including insurance proceeds) and products of the Property and assets described in the foregoing clause (a).

 

“Term Loan Priority Collateral Disposition” has the meaning set forth in Section 5.1(d)(ii).

 

“Term Loan Priority Collateral Exercise of Remedies” has the meaning set forth in Section 5.1(d)(i).

 

“Term Loan Priority Collateral Subordinated Lien Release” has the meaning set forth in Section 5.1(d).

 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that to the extent that the Uniform Commercial Code is used to define any term in this Agreement and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 thereof shall govern; provided, further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, any Lien is governed by the Uniform Commercial Code (or any similar or equivalent legislation) as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code (or such similar or equivalent legislation) as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

“Voting Stock” shall mean, with respect to any Person, (a) one (1) or more classes of Capital Stock of such Person having general voting powers to elect at least a majority of the board of directors, managers or trustees of such Person, irrespective of whether at the time Capital Stock of any other class or classes have or might have voting power by reason of the happening of any contingency, and (b) any Capital Stock of such Person convertible or exchangeable without restriction at the option of the holder thereof into Capital Stock of such Person described in clause (a) of this definition.

 

1.2.         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 “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, Instrument or other document herein shall be construed as referring to such agreement, Instrument or other document as from time to time amended, supplemented or otherwise modified, subject to any limitations thereon set forth herein, (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Exhibits or Sections shall be construed to refer to Exhibits or Sections of this Agreement and (e) 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.

 

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SECTION II

 

LIEN PRIORITIES

 

A.            Scope of Collateral.  The ABL Agent, for and on behalf of the ABL Claimholders, hereby acknowledges that the Term Loan Agent, for and on behalf of the Term Loan Claimholders, has been granted Liens upon all of the Collateral pursuant to the Term Loan Credit Documents to secure the Term Loan Obligations.  The Term Loan Agent, for and on behalf of the Term Loan Claimholders, hereby acknowledge that the ABL Agent, for and on behalf of the ABL Claimholders, has been granted Liens upon all of the Collateral pursuant to the ABL Credit Documents to secure the ABL Obligations.

 

B.            Priority.

 

1.             Notwithstanding the order or time of attachment, or the order, time or manner of perfection, or the order or time of filing or recordation of any document or instrument, or other method of perfecting a Lien in favor of any Claimholder in any ABL Priority Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Credit Documents, subject to Section 2.2(c), the Liens upon the ABL Priority Collateral securing the ABL Obligations shall have priority over the Liens upon the ABL Priority Collateral securing the Term Loan Obligations and such Liens upon the ABL Priority Collateral securing the Term Loan Obligations are and shall be junior and subordinate to the Liens upon the ABL Priority Collateral securing the ABL Obligations in all respects.

 

2.             Notwithstanding the order or time of attachment, or the order, time or manner of perfection, or the order or time of filing or recordation of any document or instrument, or other method of perfection a Lien in favor of any Claimholder in any Term Loan Priority Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Credit Documents, subject to Section 2.2(c), the Liens upon the Term Loan Priority Collateral securing the Term Loan Obligations shall have priority over the Liens upon the Term Loan Priority Collateral securing the ABL Obligations and such Liens upon the Term Loan Priority Collateral securing the ABL Obligations are and shall be junior and subordinate to the Liens upon the Term Loan Priority Collateral securing the Term Loan Obligations in all respects.

 

3.             Notwithstanding the foregoing clauses (a) and (b) or anything else in this Agreement to the contrary, the Aggregate Principal Exposure of extensions of credit made by the ABL Lenders to any of the Grantors that exceed the Maximum ABL Obligations, shall not be considered ABL Obligations for purposes of the Lien priority set forth in Section 2.2(a) above with respect to the ABL Priority Collateral.  To the extent provided under the ABL Credit Documents, all such extensions of credit in excess of the Maximum ABL Obligations shall continue to be secured by the ABL Priority Collateral; provided, that the Liens on the ABL Priority Collateral securing such extensions of credit in excess of the Maximum ABL Obligations shall be junior and subordinate to the Liens on the ABL Priority Collateral securing the Term Loan Obligations.  Notwithstanding the foregoing clauses (a) and (b) or anything else in this Agreement to the contrary, the Aggregate Principal Exposure of extensions of credit made by the Term Loan Lenders to any of the Grantors that exceed the Maximum Term Loan Obligations, shall not be considered Term Loan Obligations for purposes of the Lien priority set forth in Section 2.2(b) above with respect to the Term Loan Priority Collateral.  To the extent provided under the Term Loan Credit Documents, all such extensions of credit in excess of the Maximum Term Loan Obligations shall continue to be secured by the Term Loan Priority Collateral; provided, that the Liens on the Term Loan Priority Collateral securing such extensions of credit in

 

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excess of the Maximum Term Loan Obligations shall be junior and subordinate to the Liens on the Term Loan Priority Collateral securing the ABL Obligations

 

C.            Failure to Perfect.  Subject to Section 2.2(c), the Liens upon the ABL Priority Collateral securing the ABL Obligations shall be and remain senior in all respects and prior to the Liens on the ABL Priority Collateral securing the Term Loan Obligations, and the Liens on the Term Loan Priority Collateral securing the Term Loan Obligations shall be and remain senior in all respects and prior to the Liens on the Term Loan Priority Collateral securing the ABL Obligations, notwithstanding any failure of any Claimholder to perfect its Lien upon its respective Priority Collateral, the subordination of its Lien on such Priority Collateral to any Lien securing any other obligation of any Grantor, or the avoidance, invalidation or lapse of its Lien on such Priority Collateral.

 

D.            Prohibition on Contesting Liens.  Each of the ABL Agent, for itself and on behalf of each ABL Claimholder and the Term Loan Agent, for itself and on behalf of each Term Loan Claimholder, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the priority, validity or enforceability of a Lien held by or on behalf of any of the Term Loan Claimholders in any Collateral or by or on behalf of any of the ABL Claimholders in any Collateral, as the case may be; provided  that nothing in this Agreement shall be construed to prevent or impair the rights of any such party to enforce this Agreement, including the priority of the Lien held by it or for its benefit on its respective Collateral as provided in Sections 2.2 and 3.1.

 

E.             New Liens.  Subject to Section 6, each Grantor agrees not to grant any Lien on any of its assets or properties, or permit any of its Subsidiaries to grant a Lien on any of its assets or properties, in favor of any Agent or any Claimholders unless it, or such Subsidiary, has granted a similar Lien on such assets or properties in favor of the other Agent or the other Claimholders, subject to the Lien priority and other provisions hereof.  To the extent that the foregoing provisions are not complied with for any reason, each Agent, on behalf of the applicable Claimholders, agrees (without the need for any further consent of any Grantor) that it shall be deemed to also hold and have held such Lien as agent or bailee for the benefit of the other Agent as security for the Claimholders represented by such other Agent (subject to the Lien priority and other terms hereof) and shall promptly notify the other Agent in writing of the existence of such Lien upon becoming aware thereof.

 

SECTION III

 

ENFORCEMENT

 

A.            Enforcement.

 

1.             So long as the Discharge of ABL Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor:

 

a.             the Term Loan Agent and the Term Loan Claimholders:

 

(1)           from the date hereof until the occurrence of the Term Loan Enforcement Date, will not take any Enforcement Action with respect to any ABL Priority Collateral;

 

(2)           will not contest, protest or object to, or otherwise interfere with, hinder, or delay, any Enforcement Action by the ABL Agent or any other ABL

 

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Claimholder with respect to the ABL Priority Collateral; provided that the respective interests of the Term Loan Claimholders attach to the proceeds thereof, subject to the relative priorities described in Section 2 and Section 4; and

 

(3)           subject to the rights of the Term Loan Agent under clause (i)(A) above, will not contest, protest or object to the forbearance by the ABL Agent or the other ABL Claimholders from bringing or pursuing any Enforcement Action with respect to the ABL Priority Collateral;

 

b.             subject to Section 5.1, the ABL Agent and the other ABL Claimholders shall have the exclusive right to commence and, if applicable, maintain an Enforcement Action and make determinations regarding the release, disposition, or restrictions with respect to the ABL Priority Collateral without any consultation with or the consent of the Term Loan Agent or any other Term Loan Claimholder; provided, that

 

(1)           in any Insolvency or Liquidation Proceeding commenced by or against any Grantor, the Term Loan Agent may file a claim or statement of interest with respect to the Term Loan Obligations;

 

(2)           the Term Loan Agent may take any action (not adverse to the Liens on the ABL Priority Collateral securing the ABL Obligations, or the rights of the ABL Agent or the other ABL Claimholders to exercise remedies in respect thereof) in order to preserve or protect their Liens on the ABL Priority Collateral;

 

(3)           the Term Loan Claimholders shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Term Loan Claimholders, including without limitation any claims secured by the ABL Priority Collateral, in each case in accordance with the terms of this Agreement;

 

(4)           in any Insolvency or Liquidation Proceeding, the Term Loan Claimholders shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement; and

 

(5)           in any Insolvency or Liquidation Proceeding, the Term Loan Claimholders shall be entitled to vote on any plan of reorganization, except to the extent inconsistent with the provisions hereof.

 

2.             So long as the Discharge of Term Loan Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor:

 

a.             the ABL Agent and the ABL Claimholders:

 

(1)           from the date hereof until the occurrence of the ABL Enforcement Date, will not take any Enforcement Action with respect to any Term Loan Priority Collateral;

 

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(2)           will not contest, protest or object to, or otherwise interfere with, hinder, or delay, any Enforcement Action by the Term Loan Agent or any other Term Loan Claimholder with respect to the Term Loan Priority Collateral; provided that the respective interests of the ABL Claimholders attach to the proceeds thereof, subject to the relative priorities described in Section 2 and Section 4; and

 

(3)           subject to the rights of the ABL Agent under clause (i)(A) above, will not contest, protest or object to the forbearance by the Term Loan Agent or the other Term Loan Claimholders from bringing or pursuing any Enforcement Action with respect to the Term Loan Priority Collateral;

 

b.             subject to Section 5.1, the Term Loan Agent and the other Term Loan Claimholders shall have the exclusive right to commence and, if applicable, maintain an Enforcement Action and make determinations regarding the release, disposition, or restrictions with respect to the Term Loan Priority Collateral without any consultation with or the consent of the ABL Agent or any other ABL Claimholder; provided, that

 

(1)           in any Insolvency or Liquidation Proceeding commenced by or against any Grantor, the ABL Agent may file a claim or statement of interest with respect to the ABL Obligations;

 

(2)           the ABL Agent may take any action (not adverse to the Liens on the Term Loan Priority Collateral securing the Term Loan Obligations, or the rights of the Term Loan Agent or the other Term Loan Claimholders to exercise remedies in respect thereof) in order to preserve or protect their Liens on the Term Loan Priority Collateral;

 

(3)           the ABL Claimholders shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the ABL Claimholders, including without limitation any claims secured by the Term Loan Priority Collateral, in each case in accordance with the terms of this Agreement;

 

(4)           in any Insolvency or Liquidation Proceeding, the ABL Claimholders shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement; and

 

(5)           in any Insolvency or Liquidation Proceeding, the ABL Claimholders shall be entitled to vote on any plan of reorganization, except to the extent inconsistent with the provisions hereof.

 

3.             In exercising rights and remedies with respect to its or their Priority Collateral, the applicable Priority Agent and the Priority Claimholders may enforce the provisions of their respective Credit Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include the rights of an agent appointed by the applicable Priority Agent and

 

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the Priority Claimholders to sell or otherwise dispose of such Priority Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

 

4.             Each Agent, on behalf of itself and Claimholders for which it acts as Agent, agrees that it will not take or receive any Collateral or any Proceeds of Collateral in connection with the exercise of any right or remedy (including set-off or recoupment) with respect to any Collateral, except to the extent such Collateral, or Proceeds thereof, constitutes its Priority Collateral, and that any such Collateral or Proceeds thereof taken or received by it that does not constitute its Priority Collateral will be paid over to the applicable Priority Agent pursuant to Section 4.2, unless and until (i) with respect to the ABL Priority Collateral, the Discharge of ABL Obligations has occurred and (ii) with respect to the Term Loan Priority Collateral, the Discharge of Term Loan Obligations has occurred, each except as expressly provided in Section 6.4.  Without limiting the generality of the foregoing, (i) unless and until the Discharge of ABL Obligations has occurred, the sole right of the Term Loan Agent and the Term Loan Claimholders with respect to the ABL Priority Collateral is to hold a Lien on the ABL Priority Collateral pursuant to the Term Loan Credit Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of the ABL Obligations has occurred in accordance with the terms of the ABL Credit Documents and applicable law and (ii) unless and until the Discharge of the Term Loan Obligations has occurred, the sole right of the ABL Agent and the ABL Claimholders with respect to the Term Loan Priority Collateral is to hold a Lien on the Term Loan Priority Collateral pursuant to the ABL Credit Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Term Loan Obligations has occurred in accordance with the terms of the Term Loan Credit Documents and applicable law.

 

5.             Subject to the proviso in clause (ii) of Section 3.1(a) or the proviso in clause (ii) of Section 3.1(b), as applicable, each Agent, for itself and on behalf of the Claimholders for which it acts as Agent, (i) agrees that neither it nor such Claimholders will take any action that would hinder, delay or impede any exercise of remedies by the other Agent and other Claimholders under the Credit Agreements with respect to such other Claimholders’ respective Priority Collateral, including any sale, lease, exchange, transfer or other disposition of such Priority Collateral, whether by foreclosure or otherwise, and (ii) hereby waives any and all rights it or the Claimholders for which it acts as Agent may have as a junior lien creditor or otherwise to object to the manner or order in which the Priority Agent or the other Priority Claimholders seek to enforce the Liens granted in their respective Priority Collateral.

 

B.            Actions Upon Breach.

 

1.             If any Claimholder commences or participates in any Enforcement Action against any Grantor or the Collateral in violation of this Agreement, the Agent for the other group of Claimholders may interpose in the name of such other Claimholders or in the name of such Grantor the making of this Agreement as a defense or dilatory plea.

 

2.             Should any Claimholder in any way take, or attempt or threaten to take, contrary to this Agreement, any Enforcement Action with respect to Collateral, or fail to take any action required by this Agreement, the Agent for the other group of Claimholders (in its own name or in the name of a Grantor) may obtain relief against such offending Claimholder by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by

 

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all of the Claimholders that (i) the damages from such actions may be difficult to ascertain and may be irreparable, and (ii) the offending Claimholder waives any defense that the other group of Claimholders cannot demonstrate damage or be made whole by the awarding of damages.

 

C.            Access to Books and Records.  In the event that the Priority Agent or any of the applicable Priority Claimholders shall, in the exercise of their respective rights under the applicable Credit Document, receive possession or control of any books and Records of any Grantor which contain information identifying or pertaining to any Priority Collateral, the Priority Agent or the applicable Priority Claimholder receiving possession or control of such books and Records shall use its commercially reasonable efforts to notify the other Agent that it has received such books and Records and shall, as promptly as practicable thereafter, make such books and Records available for inspection and duplication by such other Agent so notified; provided that the Priority Agent and the applicable Priority Claimholders shall have no liability to the other Agent for failure to do so.

 

SECTION IV

 

PAYMENTS

 

A.            Application of Proceeds.

 

1.             So long as the Discharge of ABL Obligations has not occurred, (i) any Proceeds of ABL Priority Collateral received in connection with the sale or other disposition of the ABL Priority Collateral (other than a sale or other disposition permitted by the terms of the ABL Credit Documents and with respect to which prepayment of the ABL Obligations with the proceeds thereof is not required by the terms of the ABL Credit Documents), or collection on the ABL Priority Collateral upon the exercise of remedies or receipt of proceeds of ABL Priority Collateral received pursuant to an Insolvency or Liquidation Proceeding, shall be applied by the ABL Agent to the ABL Obligations in such order as specified in the relevant ABL Credit Documents and (ii) if an Event of Default (as defined in the ABL Credit Agreement) has occurred and is continuing, no Proceeds of ABL Priority Collateral may be applied to the Term Loan Obligations.  Upon the Discharge of the ABL Obligations, the ABL Agent shall deliver to the Term Loan Agent any Proceeds of ABL Priority Collateral held by it in the same form as received, with any necessary endorsements or, as a court of competent jurisdiction may otherwise direct, to be applied by the Term Loan Agent to the Term Loan Obligations in such order as specified in the Term Loan Credit Documents.

 

2.             So long as the Discharge of Term Loan Obligations has not occurred, (i) any Proceeds of Term Loan Priority Collateral received in connection with the sale or other disposition of the Term Loan Priority Collateral (other than a sale or other disposition permitted by the terms of the Term Loan Credit Documents and with respect to which prepayment of the Term Loan Obligations with the proceeds thereof is not required by the terms of the Term Loan Credit Documents) or any receipt by any Grantor of any Proceeds of the Term Loan Priority Collateral (regardless of whether an Event of Default (as defined in the ABL Credit Agreement) shall have occurred and be continuing or a Cash Dominion Event (as defined in the ABL Credit Agreement) shall then exist) resulting from an event which would otherwise require the prepayment of the Term Loan Obligations as required pursuant to Section 2.3(b) of the Term Loan Credit Agreement, or collection on the Term Loan Priority Collateral upon the exercise of remedies or receipt of proceeds of Term Loan Priority Collateral received pursuant to an Insolvency or Liquidation Proceeding, shall be applied by the Term Loan Agent to the Term Loan Obligations in such order as specified in the relevant Term Loan Credit Documents and (ii) if an

 

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Event of Default (as defined in the Term Loan Credit Agreement) has occurred and is continuing, no Proceeds of Term Loan Priority Collateral may be applied to the ABL Obligations.  Upon the Discharge of the Term Loan Obligations, the Term Loan Agent shall deliver to the ABL Agent any Proceeds of Term Loan Priority Collateral held by it in the same form as received, with any necessary endorsements or, as a court of competent jurisdiction may otherwise direct, to be applied by the ABL Agent to the ABL Obligations in such order as specified in the ABL Credit Documents.

 

3.             The Grantors shall segregate Proceeds of Term Loan Priority Collateral in excess of $1,000,000 in any fiscal year from ABL Priority Collateral and shall promptly provide an accounting thereof to the Term Loan Agent and the ABL Agent upon any sale, disposition or other receipt of Proceeds therefrom.  Notwithstanding anything to the contrary contained in this Agreement or in the ABL Credit Documents or in the Term Loan Credit Documents, only Proceeds of Term Loan Priority Collateral shall be deposited in the Term Loan Priority Account.

 

B.            Payment Turnover.

 

1.             So long as the Discharge of ABL Obligations has not occurred, any ABL Priority Collateral or Proceeds thereof (together with assets or Proceeds subject to Liens referred to in Section 6.4) received by the Term Loan Agent or any other Term Loan Claimholders in connection with the exercise of any right or remedy (including set-off or recoupment) or otherwise in respect of the ABL Priority Collateral shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The ABL Agent is hereby authorized to make any such endorsements as agent for the Term Loan Agent or any such Term Loan Claimholders.  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

 

2.             So long as the Discharge of Term Loan Obligations has not occurred, any Term Loan Priority Collateral or Proceeds thereof (together with assets or Proceeds subject to Liens referred to in Section 6.4) received by the ABL Agent or any other ABL Claimholders in connection with the exercise of any right or remedy (including set-off or recoupment) or otherwise in respect of the Term Loan Priority Collateral shall be segregated and held in trust and forthwith paid over to the Term Loan Agent for the benefit of the Term Loan Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The Term Loan Agent is hereby authorized to make any such endorsements as agent for the ABL Agent or any such ABL Claimholders.  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

 

SECTION V

 

OTHER AGREEMENTS

 

A.            Releases.

 

1.             If, in connection with:

 

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a.             the exercise of any ABL Agent’s remedies in respect of the ABL Priority Collateral, including any sale, lease, exchange, transfer or other disposition of any such Collateral (an “ABL Priority Collateral Exercise of Remedies”); or

 

b.             any sale, lease, exchange, transfer or other disposition of any ABL Priority Collateral permitted or otherwise consented to under the terms of the ABL Credit Documents (whether or not an event of default thereunder, and as defined therein, has occurred and is continuing) (an “ABL Priority Collateral Disposition”);

 

the ABL Agent, for itself or on behalf of any of the ABL Claimholders, releases any of its Liens on any part of the ABL Priority Collateral other than in connection with the Discharge of the ABL Obligations, then the Liens of the Term Loan Agent, for itself or for the benefit of the Term Loan Claimholders, on such ABL Priority Collateral, shall be automatically, unconditionally and simultaneously released (the “ABL Priority Collateral  Subordinated Lien Release”) and the Term Loan Agent, for itself or on behalf of any such Term Loan Claimholders, promptly shall execute and deliver to the ABL Agent or such Grantor such termination statements, releases and other documents as the ABL Agent or such Grantor may request to effectively confirm such release; provided, however, that the ABL Priority Collateral Subordinated Lien Release shall not occur without the consent of the Term Loan Agent in the case of an ABL Priority Collateral Exercise of Remedies, as to any ABL Priority Collateral the net Proceeds of the disposition of which will not be applied to repay (and, to the extent applicable, to reduce permanently commitments with respect to) the ABL Obligations.

 

2.             Until the Discharge of ABL Obligations occurs, the Term Loan Agent, for itself and on behalf of the Term Loan Claimholders, hereby irrevocably constitutes and appoints the ABL Agent and any officer or agent of the ABL Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Term Loan Agent or such holder or in the ABL Agent’s own name, from time to time in the ABL Agent’s discretion, for the purpose of carrying out the terms of Section 5.1(a), to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of Section 5.1(a), including any endorsements or other instruments of transfer or release.  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

 

3.             Until the Discharge of ABL Obligations occurs, to the extent that the ABL Agent for itself and on behalf of the ABL Claimholders has released any Lien on ABL Priority Collateral and any such Liens are later reinstated or the ABL Agent, on behalf of the ABL Claimholders, obtain any new Liens on the ABL Priority Collateral from Grantors, then the Term Loan Agent for itself and on behalf of the Term Loan Claimholders shall be granted a Lien on any such ABL Priority Collateral or have its Lien reinstated, as the case may be, subject to the priorities set forth in Section 2.

 

4.             If, in connection with:

 

a.             the exercise of the Term Loan Agent’s remedies in respect of the Term Loan Priority Collateral, including any sale, lease, exchange, transfer or other disposition of any such Collateral (a “Term Loan Priority Collateral Exercise of Remedies”); or

 

b.             any sale, lease, exchange, transfer or other disposition of any Term Loan Priority Collateral permitted or otherwise consented to under the terms of the Term Loan

 

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Credit Documents (whether or not an event of default thereunder, and as defined therein, has occurred and is continuing) (a “Term Loan Priority Collateral Disposition”);

 

the Term Loan Agent, for itself or on behalf of any of the Term Loan Claimholders, releases any of its Liens on any part of the Term Loan Priority Collateral other than in connection with the Discharge of the Term Loan Obligations, then the Liens of the ABL Agent, for itself or for the benefit of the ABL Claimholders, on such Term Loan Priority Collateral, shall be automatically, unconditionally and simultaneously released (the “Term Loan Priority Collateral  Subordinated Lien Release”) and the ABL Agent, for itself or on behalf of any such ABL Claimholders, promptly shall execute and deliver to the Term Loan Agent or such Grantor such termination statements, releases and other documents as the Term Loan Agent or such Grantor may request to effectively confirm such release; provided, however, that the Term Loan Priority Collateral Subordinated Lien Release shall not occur without the consent of the ABL Agent in the case of a Term Loan Priority Collateral Exercise of Remedies, as to any Term Loan Priority Collateral the net Proceeds of the disposition of which will not be applied to repay (and, to the extent applicable, to reduce permanently commitments with respect to) the Term Loan Obligations.

 

5.             Until the Discharge of Term Loan Obligations occurs, the ABL Agent, for itself and on behalf of the ABL Claimholders, hereby irrevocably constitutes and appoints the Term Loan Agent and any officer or agent of the Term Loan Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the ABL Agent or such holder or in the Term Loan Agent’s own name, from time to time in the Term Loan Agent’s discretion, for the purpose of carrying out the terms of Section 5.1(d), to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of Section 5.1(d), including any endorsements or other instruments of transfer or release.  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

 

6.             Until the Discharge of Term Loan Obligations occurs, to the extent that the Term Loan Agent for itself and on behalf of the Term Loan Claimholders has released any Lien on Term Loan Priority Collateral and any such Liens are later reinstated or the Term Loan Agent, on behalf of the Term Loan Claimholders, obtain any new Liens on the Term Loan Priority Collateral from Grantors, then the ABL Agent for itself and on behalf of the ABL Claimholders shall be granted a Lien on any such Term Loan Priority Collateral or have its Lien reinstated, as the case may be, subject to the priorities set forth in Section 2.

 

B.            Insurance.  The ABL Agent and the Term Loan Agent shall be named as additional insureds and the Control Agent shall be named as loss payee (on behalf of the ABL Agent, the ABL Claimholders, the Term Loan Agent and the Term Loan Claimholders, as their interests may appear) under any insurance policies maintained from time to time by any Grantor.  As between the ABL Agent and the ABL Claimholders, on the one hand, and the Term Loan Agent and the Term Loan Claimholders on the other, the Priority Agent and the Priority Claimholders shall have the sole and exclusive right, in accordance with the terms of the applicable Credit Documents, (a) to adjust or settle any insurance policy or claim in the event of any loss with respect to their respective Priority Collateral and (b) to approve any award granted in any condemnation or similar proceeding affecting their respective Priority Collateral.  All Proceeds of any such policy and any such award in respect of any such Priority Collateral that are payable to the Agents shall be paid to the Priority Agent for the benefit of the Priority Claimholders to the extent required under their respective Credit Documents and thereafter to the other Agents for the benefit of the other Claimholders to the extent required under their respective Credit Documents and then to the owner of the subject property or as a court of competent jurisdiction may otherwise direct.  If any

 

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Claimholder shall, at any time, receive any Proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such Proceeds over to the Priority Agent in accordance with the terms of Section 4.2.

 

C.            Control Agent for Perfection.

 

1.             The Term Loan Agent, on behalf of itself and the Term Loan Claimholders, and the ABL Agent, on behalf of itself and the ABL Claimholders, each hereby appoint Credit Suisse AG, Cayman Islands Branch, as its collateral agent (in such capacity, together with any successor in such capacity appointed by the Term Loan Agent and the ABL Agent, the “Control Agent”) for the limited purpose of acting as the agent on behalf of the Term Loan Agent (on behalf of itself and the Term Loan Claimholders) and the ABL Agent (on behalf of itself and the ABL Claimholders) with respect to the Control Collateral.  The Control Agent accepts such appointment and agrees to hold the Control Collateral in its possession or control (or in the possession or control of its agents or bailees) as Control Agent for the benefit of the Term Loan Agent (on behalf of itself and the Term Loan Claimholders) and the ABL Agent (on behalf of itself and the ABL Claimholders) and any permitted assignee of any thereof solely for the purpose of perfecting the security interest granted to such parties in such Control Collateral, subject to the terms and conditions of this Section 5.3.  The Term Loan Agent and the ABL Agent hereby acknowledge that the Control Agent shall obtain “control” under the UCC over each Controlled Account as contemplated by the Term Loan Credit Documents and the ABL Collateral Documents for the benefit of the Term Loan Agent (on behalf of itself and the Term Loan Claimholders) and the ABL Agent (on behalf of itself and the ABL Claimholders) pursuant to control agreements relating to a Controlled Account if requested by the ABL Agent and the Term Loan Agent to act in such capacity.

 

2.             The Control Agent, the Term Loan Agent, on behalf of itself and the Term Loan Claimholders, and the ABL Agent, on behalf of itself and the ABL Claimholders, each hereby agree that the applicable Priority Agent shall have the sole and exclusive right and authority to give instructions to, and otherwise direct, the Control Agent in respect of the Control Collateral constituting such Priority Agent’s Priority Collateral or any control agreement with respect to any Control Collateral until the ABL Enforcement Date or the Term Loan Enforcement Date, as applicable, shall have occurred, and none of the other Claimholders will impede, hinder, delay or interfere with the exercise of such rights by the Priority Agent in any respect.  The Grantors hereby jointly and severally agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the Grantors are required to do so for the ABL Agent in accordance with the ABL Credit Agreement and for the Term Loan Agent in accordance with the Term Loan Credit Agreement.  The ABL Claimholders and the Term Loan Claimholders hereby jointly and severally agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the ABL Claimholders are required to do so for the ABL Agent in accordance with the ABL Credit Agreement and the Term Loan Claimholders are required to do so for the Term Loan Agent in accordance with the Term Loan Credit Agreement.

 

3.             Except as set forth below, the Control Agent shall have no obligation whatsoever to the Agents or any other Claimholder including, without limitation, any obligation to assure that the Control Collateral is genuine or owned by any Grantor or one of their respective Subsidiaries or to preserve rights or benefits of any Person except as expressly set forth in this Section 5.3.  In acting on behalf of the Agents and other Claimholders, the duties or responsibilities of the Control Agent under this Section 5.3 shall be limited solely (i) to physically holding the Control

 

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Collateral delivered to the Control Agent by any Grantor as agent for the Term Loan Agent (on behalf of itself and the Term Loan Claimholders) and the ABL Agent (on behalf of itself and the ABL Claimholders) for purposes of perfecting the Lien held by the Term Loan Agent and the ABL Agent and (ii) delivering such collateral as set forth in Section 5.3(e).

 

4.             The Control Agent shall not have, by reason of this Agreement or any other document a fiduciary relationship in respect of the Term Loan Agent or any Term Loan Claimholder or the ABL Agent or any ABL Claimholder.

 

5.             Upon the Discharge of ABL Obligations (other than in connection with a Refinancing of the ABL Obligations), the Control Agent shall deliver any Control Collateral constituting ABL Priority Collateral in the possession of the Control Agent to the Term Loan Agent together with any necessary endorsements or as a court of competent jurisdiction may otherwise direct and the Term Loan Agent shall accept and succeed to the role of the Control Agent as the agent for perfection on such Control Collateral.  Upon the Discharge of Term Loan Obligations (other than in connection with a Refinancing of the Term Loan Obligations), the Control Agent shall deliver any Control Collateral constituting Term Loan Priority Collateral in the possession of the Control Agent to the ABL Agent together with any necessary endorsements or as a court of competent jurisdiction may otherwise direct and the ABL Agent shall accept and succeed to the role of the Control Agent as the agent for perfection on such Control Collateral.

 

6.             The Control Agent shall have an unfettered right to resign as Control Agent upon 30 days notice to the Term Loan Agent and the ABL Agent.  If upon the effective date of such resignation no successor to the Control Agent has been appointed by the Term Loan Agent and the ABL Agent, the Control Agent shall deliver to the ABL Agent (with respect to Control Collateral constituting ABL Priority Collateral) and/or the Term Loan Agent (with respect to Control Collateral constituting Term Loan Priority Collateral), as appropriate, the Control Collateral together with any necessary endorsements (or otherwise allow the ABL Agent and/or Term Loan Agent, as appropriate, to obtain control of such Control Collateral) or as a court of competent jurisdiction may otherwise direct and the ABL Agent and/or Term Loan Agent shall accept and succeed to the role of the Control Agent as the agent for perfection on the Control Collateral.

 

7.             The ABL Agent agrees to hold any Collateral (including any Control Collateral) that may from time to time be in its possession or control (or in the possession or control of its agents or bailees other than the Control Agent) as bailee or as agent, as the case may be, for the benefit of the Term Loan Agent (and any assignee thereof) (on behalf of itself and the Term Loan Claimholders) solely for this purpose of perfecting the security interest granted to the Term Loan Agent under the Term Collateral Documents, subject to the terms and conditions of this Agreement.  For the avoidance of doubt, solely for purposes of perfecting the Liens in favor of the Term Loan Agent, the ABL Agent agrees that it shall be the agent of the Term Loan Agent with respect to any Control Collateral included in the Collateral that are controlled or held by the ABL Agent.  Except as set forth in this clause (g), the ABL Agent shall have no obligation whatsoever to the Term Loan Agent or any Term Loan Claimholder including, without limitation, any obligation to assure that any Collateral is genuine or is owned by any Grantor or one of their respective Subsidiaries or to preserve rights or benefits of any Person.  In acting as agent or bailee on behalf of the Term Loan Agent (on behalf of itself and the Term Loan Claimholders), the duties or responsibilities of the ABL Agent under this Section 5.3(g) shall be limited solely to (i) physically holding (or causing its agent or bailee, as applicable, to hold) any Collateral (including any Control Collateral) that may from time to time be in its possession or control (or in the

 

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possession of control of its agents or bailees other than the Control Agent) as agent or bailee for the Term Loan Agent (on behalf of itself and the Term Loan Claimholders) for purposes of perfecting the Liens held by the Term Loan Agent and (ii) delivering the Control Collateral referred to in clause (i) above as set forth in Section 5.3(e).

 

8.             The Term Loan Agent agrees to hold any Collateral (including any Control Collateral) that may from time to time be in its possession or control (or in the possession or control of its agents or bailees other than the Control Agent) as bailee or as agent, as the case may be, for the benefit of the ABL Agent (and any assignee thereof) (on behalf of itself and the ABL Claimholders) solely for this purpose of perfecting the security interest granted to the ABL Agent under the ABL Collateral Documents, subject to the terms and conditions of this Agreement.  For the avoidance of doubt, solely for purposes of perfecting the Lien in favor of the ABL Agent, the Term Loan Agent agrees that it shall be the agent of the ABL Agent with respect to any Control Collateral included in the Collateral that are controlled or held by the Term Loan Agent.  Except as set forth in this clause (h), the Term Loan Agent shall have no obligation whatsoever to the ABL Agent or any ABL Claimholder including, without limitation, any obligation to assure that any Collateral is genuine or is owned by any Grantor or one of their respective Subsidiaries or to preserve rights or benefits of any Person.  In acting as agent or bailee on behalf of the ABL Agent (on behalf of itself and the ABL Claimholders), the duties or responsibilities of the Term Loan Agent under this Section 5.3(h) shall be limited solely to (i) physically holding (or causing its agent or bailee, as applicable, to hold) any Collateral (including any Control Collateral) that may from time to time be in its possession or control (or in the possession of control of its agents or bailees other than the Control Agent) as agent or bailee for the ABL Agent (on behalf of itself and the ABL Claimholders) for purposes of perfecting the Lien held by the ABL Agent and (ii) delivering the Control Collateral referred to in clause (i) above as set forth in Section 5.3(e).

 

9.             It is acknowledged and agreed that (a) the ABL Agent has entered into, or may enter into, certain collateral access agreements, landlord lien waivers, landlord consents, consignee notifications, processor notifications and other similar agreements or notices with certain third parties with respect to the security interests granted to the ABL Agent by the Grantors (the “Third Party Agreements”) and (b) the terms of such Third Party Agreements may permit the ABL Agent to notify such third party in writing that the references to the ABL Agent in such Third Party Agreement shall mean a reference to the agent for lenders or a lender providing additional loans or other financial accommodations to the Grantors (the “Additional Lender Notice”).  The ABL Agent agrees to promptly, upon the effectiveness of any such Third Party Agreement, (a) give such Additional Lender Notice to the applicable third party under the applicable Third Party Agreement in accordance with the terms thereof and (b) provide the Term Loan Agent with a copy of such Additional Lender Notice.  The Additional Lender Notice shall indicate that the Term Loan Lenders and the Term Loan Agent have the same rights and benefits of the ABL Agent under such Third Party Agreements.  With respect to (x) any Third Party Agreement that provides for an Additional Lender Notice but which has not yet been provided by the ABL Agent or (y) any Third Party Agreement that does not provide the right for the ABL Agent to provide an Additional Lender Notice, in each case, it is agreed that until such time as the Additional Lender Notice is provided in the case of clause (x) or the Term Loan Agent enters into a similar Third Party Agreement in the case of clause (y), the references to the ABL Agent in such Third Party Agreement shall be deemed to be references to the ABL Agent in its capacity as agent and bailee of the Term Loan Agent, provided, however that the ABL Agent in its capacity as such agent or bailee shall have no liability to the Term Loan Agent or the Term Loan Lenders other than as a result of the gross negligence or willful misconduct of the ABL Agent or their agents, as determined by a final non-appealable judgment of a court of competent jurisdiction.

 

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D.            Access to Real Property Collateral.

 

1.             In the event that either Term Loan Agent shall acquire control or possession of any of the Real Property Collateral or shall, through the exercise of remedies under the Term Loan Credit Documents or otherwise, sell any of the Real Property Collateral to any third party (a “Third Party Purchaser”), the Term Loan Agent shall, to the extent permitted by law, permit the ABL Agent (or shall require as a condition of such sale to the Third Party Purchaser that the Third Party Purchaser agree to permit the ABL Agent), at the ABL Agent’s option (at the sole cost and expense of the ABL Agent and subject to the condition that the Term Loan Claimholders shall have no obligation or duty to take any action or refrain from taking any action that could reasonably be expected to result in the incurrence of liability or damage to the Term Loan Claimholders), during normal business hours on any Business Day and upon reasonable advance notice, subject to any rights of landlords under leases: (i) to enter any of the premises of any Grantor (or Third Party Purchaser) constituting such Real Property Collateral under such control or possession (or sold to a Third Party Purchaser) in order to inspect, remove or take any action with respect to the ABL Priority Collateral or to enforce the ABL Agent’s rights with respect thereto, including, but not limited to, the examination and removal of ABL Priority Collateral and the examination and duplication of any Collateral (to the extent not ABL Priority Collateral) under such control or possession (or sold to a Third Party Purchaser) consisting of books and records of any Grantor related to the ABL Priority Collateral; (ii) to use the Real Property Collateral for the purpose of manufacturing or processing raw materials or work-in-process into finished Inventory; (iii) to use any of the Real Property Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of computers or other data processing equipment related to the storage or processing of records, documents or files pertaining to the ABL Priority Collateral and use any Real Property Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of other equipment to handle, deal with, dispose of (including pursuant to one or more public or private sales or auctions), bill, process and/or collect any ABL Priority Collateral pursuant to the ABL Agent’s rights as set forth in the ABL Credit Documents, the UCC of any applicable jurisdiction and other applicable law, and (iv) to use any of the Term Loan Priority Collateral consisting of Intellectual Property rights owned or controlled by the Term Loan Agent or the other Term Loan Claimholders as is or may be necessary for the ABL Agent to liquidate the ABL Priority Collateral, provided that (A) the ABL Agent’s use of such Intellectual Property rights shall be reasonable and lawful and shall not impair the value of the Intellectual Property being used and (B) such permission to use such Intellectual Property rights is granted on an “AS IS” basis, without any representation or warranty whatsoever.  Such use by ABL Agent of the Real Property Collateral and Term Loan Priority Collateral shall not be on an exclusive basis.  If the ABL Agent conducts a public auction or private sale of the ABL Priority Collateral at any of the Real Property Collateral, the ABL Agent shall provide the Term Loan Agent with reasonable advance notice and use reasonable efforts to hold such auction or sale in a manner that would not unduly disrupt the Term Loan Agent’s use of such Real Property Collateral.

 

2.             The ABL Agent hereby acknowledges, for itself and on behalf of the other ABL Claimholders that, during the period any ABL Priority Collateral shall be under control or possession of the Term Loan Agent, the Term Loan Agent shall not be obligated to take any action to protect or to procure insurance with respect to such ABL Priority Collateral, it being understood that Term Loan Agent shall have no responsibility for loss or damage to the ABL Priority Collateral (other than as a result of the gross negligence or willful misconduct of the Term Loan Agent or their agents, as determined by a final non-appealable judgment of a court of competent jurisdiction) and that all the risk of loss or damage to the ABL Priority Collateral shall

 

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remain with the ABL Claimholders; provided, that to the extent insurance obtained by the Term Loan Agent provides coverage for risks relating to access to or use of ABL Priority Collateral, the ABL Agent will be made an additional named insured thereunder.

 

3.             The rights of ABL Agent set forth in Section 5.4(a)(i)-(iv) above shall continue until the earlier of (i) 150 days after the date ABL Agent receives written notice from the Term Loan Agent that the Term Loan Agent has control or possession of the Real Property Collateral at issue and (ii) the sale or other disposition of such Real Property Collateral by the Term Loan Agent or the other Term Loan Claimholders (so long as the Term Loan Agent shall require as a condition of such sale to the applicable Third Party Purchaser that such Third Party Purchaser agree to the provisions of this Section 5.4).  Such time period shall be tolled during the pendency of any Insolvency Proceeding of any Grantor or other proceedings pursuant to which both the ABL Claimholders and the Term Loan Claimholders are effectively stayed from enforcing their rights against the ABL Priority Collateral.  In no event shall any Term Loan Claimholder take any action to interfere, limit or restrict the rights of ABL Agent or the exercise of such rights by ABL Agent to have access to or to use any of such Collateral pursuant to Section 5.4(a) prior to the expiration of such period.

 

4.             During the actual occupation by ABL Agent, its agents or representatives, of any real property constituting Real Property Collateral during the access and use period permitted by Section 5.4(a) above, (i) the ABL Claimholders shall be obligated to pay to the Term Loan Claimholders any rent payable to third parties and all utilities, taxes and other maintenance and operating costs of such real property during any such period of actual occupation by ABL Agent, but only to the extent the Term Loan Claimholders are required to pay or are otherwise paying any such rent, utilities, taxes or other maintenance and operating costs during the actual occupation of such real property by ABL Agent, its agents or representatives and (ii) the ABL Agent shall take proper and reasonable care under the circumstances of any Term Loan Priority Collateral that is used by the ABL Agent and the ABL Agent shall comply with all applicable laws in all material respects in connection with its use or occupancy of the Term Loan Priority Collateral.  The ABL Agent and the ABL Claimholders shall be obligated to repair at their expense any physical damage to such Term Loan Priority Collateral resulting from such occupancy, use or control, and to leave such Term Loan Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted.  The ABL Agent and the ABL Claimholders shall indemnify and reimburse the Term Loan Agent and the Term Loan Claimholders for any injury or damage to Persons caused by the acts or omission of the ABL Agent, any ABL Claimholder or Persons under their control and, as a condition to any such occupancy, use or control, the ABL Agent shall provide the Term Loan Agent with evidence of customary liability insurance naming the Term Loan Claimholders as additional insureds.

 

E.             Amendments to ABL Credit Documents and Term Loan Credit Documents.

 

1.             The ABL Credit Documents may be amended, supplemented or otherwise modified in accordance with their terms, the ABL Credit Agreement may be Refinanced and the ABL Obligations may be extended or increased (subject to the limitations set forth herein) in each case without the consent of the Term Loan Agent or the Term Loan Claimholders; provided, however, that the holders of such Refinancing, extended or increased debt bind themselves in writing to the terms of this Agreement and any such amendment, supplement, modification or Refinancing shall not provide for a principal amount of, without duplication, term loans, revolving loan commitments and letters of credit, bonds, debentures, notes or similar instruments

 

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(but excluding Obligations in respect of Bank Products and indemnity and expense reimbursement obligations) in the aggregate in excess of the Maximum ABL Obligations.

 

2.             The Term Loan Credit Documents may be amended, supplemented or otherwise modified in accordance with their terms, the Term Loan Credit Agreement may be Refinanced and the Term Loan Obligations may be extended or increased (subject to the limitations set forth herein) in each case, without the consent of the ABL Agent or the ABL Claimholders; provided, however, that the holders of such Refinancing, extended or increased debt bind themselves in writing to the terms of this Agreement and any such amendment, supplement, modification or Refinancing shall not: (i) provide for a principal amount of, without duplication, term loans and other loans, notes or similar instruments (but excluding Obligations in respect of indemnity and expense reimbursement obligations) in the aggregate in excess of the Maximum Term Loan Obligations; or (ii) change to earlier dates the dates upon which payments of principal or interest on the Term Loan Obligations are due including shortening the scheduled final maturity date of the Term Loan Obligations, to the extent such change results in the scheduled final maturity date of the Term Loan Obligations being earlier than the scheduled final maturity date of the ABL Obligations.

 

SECTION VI

 

INSOLVENCY OR LIQUIDATION PROCEEDINGS

 

A.            Use of Cash Collateral and Financing Issues.  If any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Priority Agent shall desire to permit the use of cash collateral which constitutes such Priority Agent’s Priority Collateral or to permit any Grantor to obtain financing secured by such Priority Agent’s Priority Collateral (and not by any Collateral which does not constitute such Priority Agent’s Priority Collateral), from one or more of the Claimholders for whom such Priority Agent acts as agent, under Section 363 or Section 364 of the Bankruptcy Code or any similar Bankruptcy Law (such financing, a “DIP Financing”),  then each other Agent, on behalf of itself and the other Claimholders for whom it acts as agent, (A) agrees that it will raise no objection to such use of cash collateral or DIP Financing nor support any other Person objecting to, such sale, use, or lease of cash collateral or DIP Financing and will not request any form of adequate protection or any other relief in connection therewith (except as agreed by the Priority Agent or to the extent expressly permitted by Section 6.4) and, to the extent the Liens securing the Obligations of the Priority Claimholders are subordinated to or pari passu with the Liens securing such DIP Financing, the other Agent will subordinate its Liens in the Priority Agent’s Priority Collateral to (x) the Liens securing such DIP Financing (and all Obligations relating thereto), (y) any adequate protection Liens provided to the Priority Claimholders and (z) any “carve-out” for professional or United States Trustee fees agreed to by the Priority Agent; and (B) agrees that notice received two (2) calendar days prior to the entry of an order approving such usage of cash collateral or approving such DIP Financing shall be adequate notice; provided that the foregoing shall not prohibit the other Agent or the other Claimholders from objecting solely to any provisions in any agreement regarding the use of cash collateral or any DIP Financing relating to, describing or requiring any provision or content of a plan of reorganization other than any provisions requiring that the DIP Financing be paid in full in cash.  The Term Loan Agent, on behalf of itself and the Term Loan Claimholders, agrees that no Term Loan Claimholder shall, directly or indirectly, provide or seek to provide DIP Financing secured by Liens equal to or senior in priority to the Liens on the ABL Primary Collateral securing the ABL Obligations, without the prior written consent of the ABL Agent.  The ABL Agent, on behalf of itself and the ABL Claimholders, agrees that no ABL Claimholder shall, directly or indirectly, provide or seek to provide DIP Financing secured by Liens equal

 

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to or senior in priority to the Liens on the Term Loan Primary Collateral securing the Term Loan Obligations, without the prior written consent of the Term Loan Agent.

 

B.            Sale Issues.  Each Agent, on behalf of itself and the Claimholders for whom it acts as agent, agrees that it will raise no objection to or oppose a sale or other disposition (including any objection or opposition in respect of any sale procedures put forth in connection with a sale or other disposition) of any Collateral which does not constitute its Priority Collateral free and clear of its Liens or other claims under Section 363 of the Bankruptcy Code if the Priority Agent has consented to such sale or disposition of such assets so long as the interests of such Agent and the Claimholders for whom it acts as agent attach to the Proceeds thereof, subject to the terms of this Agreement, and so long as the net Proceeds of such sale or other disposition are applied pursuant to Section 4 of this Agreement.  If requested by the Priority Agent in connection therewith, the other Agent shall affirmatively consent to such a sale or disposition.

 

C.            Relief from the Automatic Stay.  Each Agent, on behalf of itself and the Claimholders for whom it acts as agent, agrees that none of them shall (i) seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of any Collateral which does not constitute its Priority Collateral without the prior written consent of the Priority Agent, or (ii) oppose any request by the Priority Agent or any Priority Claimholder to seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of their respective Priority Collateral.

 

D.            Adequate Protection.

 

1.             Each Agent, on behalf of itself and the Claimholders for whom it acts as agent, may seek adequate protection of its interest in its respective Priority Collateral and the other Agent, on behalf of itself and the Claimholders for whom it acts as agent, agrees that none of them shall contest (or support any other person contesting) (i) any such request for adequate protection by the Priority Agent or (ii) any objection by the Priority Agent or the Priority Claimholders to any motion, relief, action or proceeding based on the Priority Agent or the Priority Claimholders claiming a lack of adequate protection of their interests in the Priority Collateral.  Each Priority Agent acknowledges and agrees that any superpriority administrative expense claim granted to such Priority Agent or arising under 11 U.S.C. § 507(b) as adequate protection of its interest in its respective Priority Collateral shall be pari passu with any superpriority administrative expense claim granted to the other Agent as adequate protection of its interest in its respective Priority Collateral.

 

2.             Each Agent, on behalf of itself and the Claimholders for whom it acts as Agent, may seek adequate protection of its junior interest in the Collateral, subject to the provisions of this Agreement, only if (A) the Priority Agent is granted adequate protection in the form of a replacement Lien on post-petition collateral of the same type as the Priority Collateral, and (B) such additional protection requested by such Agent is in the form of a replacement Lien on such post-petition collateral of the same type as the Priority Collateral, which Lien, if granted, will be subordinated to the adequate protection Liens granted in favor of the Priority Agent on such post-petition collateral and the Liens securing any DIP financing (and all Obligations relating thereto) secured by such Priority Collateral on the same basis as the Liens of the other Agent on such Priority Collateral are subordinated to the Liens of the Priority Agent on the Priority Collateral under this Agreement.  In the event that any Agent, on behalf of itself or any of the Claimholder for whom it acts as agent, seeks or requests (or is otherwise granted) adequate protection of its junior interest in the Collateral in the form of a replacement Lien on additional collateral in any form, then such Agent, on behalf of itself and the Claimholders for whom it acts

 

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as agent, agrees that the Priority Agent shall also be granted a replacement Lien on such additional collateral as adequate protection of its senior interest in the Priority Collateral and that such Agent’s replacement Lien shall be subordinated to the replacement Lien of the Priority Agent.  If any Agent or Claimholder receives as adequate protection a Lien on post-petition assets of the same type as its pre-petition Priority Collateral, then such post-petition assets shall also constitute Priority Collateral of such Person to the extent of any allowed claim secured by such adequate protection Lien.

 

3.             Each Agent on behalf of itself and the Claimholders for whom it acts as agent, may seek and receive additional adequate protection of its junior interest in Collateral, subject to the provisions of this Agreement, in the form of a superpriority administrative expense claim, including a claim arising under 11 U.S.C. § 507(b), which superpriority administrative expense claim shall be junior in all respects to any superpriority administrative expense claim granted to the Priority Claimholders with respect to such Collateral.  In the event an Agent, on behalf of itself and the Claimholders for whom it acts as agent, seeks or receives protection of its junior interest in Collateral and is granted a superpriority administrative expense claim, including a claim arising under 11 U.S.C. § 507(b), then such Agent, on behalf of itself and the Claimholders for whom it acts as agent, agrees that the Priority Claimholders shall receive a superpriority administrative expense claim which shall be senior in all respects to the superpriority administrative expense claim granted to such Agent with respect to such Collateral.

 

E.             Separate Grants of Security and Separate Classification.  Each of the Grantors and each of the Claimholders acknowledges and agrees with respect to each class of Priority Collateral that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Loan Collateral Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the ABL Obligations and the Term Loan Obligations are fundamentally different from one another and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.  To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Claimholders and Term Loan Claimholders in respect of any Priority Collateral, constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Priority Claimholders shall be entitled to receive, in addition to amounts distributed to them from, or in respect of, their Priority Collateral in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees, costs and other charges, irrespective of whether a claim for such amounts is allowed or allowable in such Insolvency or Liquidation Proceeding, before any distribution from, or in respect of, any such Priority Collateral is made in respect of the claims held by the other Claimholders, with the other Claimholders hereby acknowledging and agreeing to turn over to the Priority Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the other Claimholders.

 

F.             Post-Petition Claims.  No Agent, nor any of the Claimholders for which they act as agent, shall oppose or seek to challenge (a) any claim by the Priority Agent or any Priority Claimholder for allowance in any Insolvency or Liquidation Proceeding of Obligations consisting of post-petition interest, fees, costs, charges or expenses to the extent of the value of the lien of the Priority Agent in such Priority Agent’s Priority Collateral, without regard to the existence of the Lien of the other Agent in such Collateral, or (b) any claim by the other Agent or any other Claimholder for allowance in any Insolvency or Liquidation Proceeding of Obligations consisting of post-petition interest, fees, costs, charges or expenses to the extent of the value of the lien of the other Agent in such Collateral.

 

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G.            Avoidance Issues.  If any Priority Claimholder is required in any Insolvency or Liquidation Proceeding, or otherwise, to turn over or otherwise pay to the estate of any Grantor or any Subsidiary of any Grantor any amount in respect of any ABL Obligation or a Term Loan Obligation, as applicable (a “Recovery”), then such Claimholders shall be entitled to a reinstatement of their Obligations with respect to all such recovered amounts.  If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.  Priority Collateral or Proceeds thereof received by the other Agent or any other Claimholder after a Discharge of ABL Obligations or Discharge of Term Loan Obligations, as applicable, and prior to the reinstatement of such Obligations shall be delivered to the Priority Agent upon such reinstatement in accordance with Section 4.2.

 

H.            Expense Claims.  Each Agent, for itself and on behalf of the Claimholders for whom it acts as Agent, agrees that it will not (i) contest the payment of fees, expenses or other amounts to the Priority Agent or any Priority Claimholder under Section 506(b) of the Bankruptcy Code or otherwise to the extent of the value of the lien of the Priority Agent in such Priority Agent’s Priority Collateral and to the extent provided for in the applicable Credit Agreement or (ii) assert or enforce any claim under Section 506(c) of the Bankruptcy Code senior to or on parity with the Lien of the Priority Agent for costs or expenses of preserving or disposing of the other Agent’s Priority Collateral.

 

I.              Effectiveness in Insolvency or Liquidation Proceedings.  This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under Section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency or Liquidation Proceeding.  All references in this Agreement to any Grantor shall include such Person as a debtor-in-possession and any receiver or trustee for such Person in any Insolvency or Liquidation Proceeding.

 

SECTION VII

 

RELIANCE; WAIVERS; ETC.

 

A.            Non-Reliance

 

1.             The consent by the ABL Claimholders to the execution and delivery of the Term Loan Credit Documents and the grant to the Term Loan Agent on behalf of the Term Loan Claimholders of a Lien on the ABL Priority Collateral and all loans and other extensions of credit made or deemed made on and after the date hereof by the ABL Claimholders to the Grantors shall be deemed to have been given and made in reliance upon this Agreement.  The Term Loan Agent, on behalf of itself and the other Term Loan Claimholders, acknowledges that it and the Term Loan Claimholders have, independently and without reliance on the ABL Agent or any other ABL Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Term Loan Credit Agreement, the other Term Loan Credit Documents, this Agreement and the transactions contemplated hereby and thereby and they will continue to make their own credit decision in taking or not taking any action under the Term Loan Credit Agreement, the other Term Loan Credit Documents or this Agreement.

 

2.             The consent by the Term Loan Claimholders to the execution and delivery of the ABL Credit Documents and the grant to the ABL Agent on behalf of the ABL Claimholders of a Lien on the Term Loan Priority Collateral and all loans and other extensions of credit made or

 

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deemed made on and after the date hereof by the Term Loan Claimholders to the Grantors shall be deemed to have been given and made in reliance upon this Agreement.  The ABL Agent, on behalf of itself and the other ABL Claimholders, acknowledges that it and the ABL Claimholders have, independently and without reliance on the Term Loan Agent or any other Term Loan Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the ABL Credit Agreement, the other ABL Credit Documents, this Agreement and the transactions contemplated hereby and thereby and they will continue to make their own credit decision in taking or not taking any action under the ABL Credit Agreement, the other ABL Credit Documents or this Agreement.

 

B.            No Warranties or Liability.  The ABL Agent, on behalf of itself and the ABL Claimholders, acknowledges and agrees that the Term Loan Agent and the Term Loan Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Term Loan Credit Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  The Term Loan Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the Term Loan Credit Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Term Loan Agent, on behalf of itself and the Term Loan Claimholders, acknowledges and agrees that the ABL Agent and the ABL Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the ABL Credit Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  The ABL Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the ABL Credit Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Term Loan Agent and the Term Loan Claimholders shall have no duty to the ABL Agent or any of the ABL Claimholders, and the ABL Agent and the ABL Claimholders shall have no duty to the Term Loan Agent or any of the Term Loan Claimholders, to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with any Grantor (including the ABL Credit Documents and the Term Loan Credit Documents), regardless of any knowledge thereof which they may have or be charged with.

 

C.            No Waiver of Lien Priorities.

 

1.             No right of the ABL Agent and the ABL Claimholders, the Term Loan Agent and the Term Loan Claimholders, the Control Agent or any of them to enforce any provision of this Agreement or their respective Credit Documents shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by such party, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement or their respective Credit Documents, regardless of any knowledge thereof which such party may have or be otherwise charged with.

 

2.             Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Grantors under the applicable Credit Documents), the ABL Agent and the ABL Claimholders, and the Term Loan Agent and the Term Loan Claimholders, and any of them may, at any time and from time to time in accordance with their respective Credit Documents or applicable law, without the consent of, or notice to, the other Claimholders and without incurring any liabilities to the other Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of the other Claimholders is affected, impaired or extinguished thereby) do any one or more of the following:

 

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a.             make loans and advances to any Grantor or issue, guaranty or obtain letters of credit for account of any Grantor or otherwise extend credit to any Grantor, in any amount and on any terms, whether pursuant to a commitment or as a discretionary advance and whether or not any default or event of default or failure of condition is then continuing (subject, in each case, to any limitations expressly set forth in this Agreement);

 

b.             change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of their respective Obligations or guaranty thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of their respective Obligations, without any restriction as to the amount, tenor or terms of any such increase or extension, subject to any limitations expressly set forth in this Agreement) or, subject to the provisions of this Agreement, otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by such Agent or such Claimholders, their respective Obligations or any of their respective Credit Documents; provided, however, the foregoing shall not prohibit the other Agent and the other Claimholders from enforcing, consistent with the other terms of this Agreement, any right arising under their respective Credit Agreement as a result of any Grantor’s violation of the terms hereof;

 

c.             subject to the provisions of this Agreement, sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Collateral or any liability of any Grantor to such Claimholders or such Agent, or any liability incurred directly or indirectly in respect thereof;

 

d.             settle or compromise their respective Obligations or any portion thereof or any other liability of any Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including their respective Obligations) in any manner or order;

 

e.             subject to the restrictions set forth in this Agreement, exercise or delay in or refrain from exercising any right or remedy against any security or any Grantor or any other Person, elect any remedy and otherwise deal freely with any Grantor or any Collateral and any security and any guarantor or any liability of any Grantor to such Claimholders or any liability incurred directly or indirectly in respect thereof;

 

f.              take or fail to take any Lien securing their respective Obligations or any other collateral security for such Obligations or take or fail to take any action which may be necessary or appropriate to ensure that any Lien securing such Obligations or any other Lien upon any property is duly enforceable or perfected or entitled to priority as against any other Lien, provided that Liens taken in violation of Section 2.5 shall be subject to the provisions of Section 2.5; or

 

g.             otherwise release, discharge or permit the lapse of any or all Liens securing their respective Obligations or any other Liens upon any property at any time securing any such Obligations.

 

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3.             Each Agent, on behalf of itself and the Claimholders for which it acts as agent, also agrees that the Priority Agent and the Priority Claimholders shall have no liability to such Agent or the Claimholders for which it acts as agent, and such Agent on behalf of itself and the Claimholders for which it acts as agent, hereby waives all claims against the Priority Agent and the Priority Claimholders, arising out of any and all actions which the Priority Agent or the Priority Claimholders may take or permit or omit to take with respect to their Priority Collateral.  Each Agent, on behalf of itself and the Claimholders for which it acts as agent, agrees that the Priority Agent and Priority Claimholders shall have no duty to them in respect of the maintenance or preservation of the Priority Agent’s Priority Collateral.

 

4.             Each Agent, on behalf of itself and the Claimholders for whom it acts as Agent, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to Collateral that does not constitute its Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

D.            Obligations Unconditional.  All rights, interests, agreements and obligations of the ABL Agent and the ABL Claimholders and the Term Loan Agent and the Term Loan Claimholders, respectively, hereunder shall remain in full force and effect irrespective of:

 

1.             any lack of validity or enforceability of any ABL Credit Documents or any Term Loan Credit Documents or any setting aside or avoidance of any Lien;

 

2.             except as otherwise set forth in the Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the ABL Obligations or Term Loan Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any ABL Credit Document or any Term Loan Credit Document;

 

3.             any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the ABL Obligations or Term Loan Obligations or any guarantee thereof;

 

4.             the commencement of any Insolvency or Liquidation Proceeding in respect of any Grantor; or

 

5.             any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Grantor in respect of the ABL Obligations or the Term Loan Obligations.

 

E.             Certain Notices.

 

1.             Promptly upon Discharge of ABL Obligations, the ABL Agent shall deliver written notice confirming same to the Term Loan Agent; provided that the failure to give any such notice shall not result in any liability of the ABL Agent or the other ABL Claimholders hereunder or in the modification, alteration, impairment, or waiver of the rights of any party hereunder.  Promptly upon Discharge of Term Loan Obligations, the Term Loan Agent shall deliver written notice confirming same to the ABL Agent; provided that the failure to give any such notice shall not result in any liability of the Term Loan Agent or the other Term Loan 

 

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Claimholders hereunder or in the modification, alteration, impairment, or waiver of the rights of any party hereunder.

 

2.             (I) No later than five (5) days prior to the commencement by such Priority Agent of any Enforcement Action or the exercise of any remedy with respect to its Priority Collateral (including by way of a public or private sale of such Priority Collateral), such Priority Agent shall notify the other Agent of such intended action and (II) concurrently with the giving thereof to any Grantor, each Agent shall give the other Agent a copy of any written notice by such Agent of an Event of Default (as defined in and under the applicable Credit Document) or written notice of demand for payment from any Grantor; provided that the failure to give any such notice shall not result in any liability of such Priority Agent or the other Priority Claimholders hereunder or in the modification, alteration, impairment, or waiver of the rights of any party hereunder.

 

SECTION VIII

 

MISCELLANEOUS

 

A.            Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of the Term Loan Credit Documents or the ABL Credit Documents, the provisions of this Agreement shall govern and control.  The parties hereto acknowledge that the terms of this Agreement are not intended to negate any specific rights granted to any Grantor in the Term Loan Credit Documents or the ABL Credit Documents.

 

B.            Effectiveness; Continuing Nature of this Agreement; Severability.  This Agreement shall become effective when executed and delivered by the parties hereto.  This is a continuing agreement of lien subordination and the ABL Claimholders and Term Loan Claimholders may each continue, at any time and without notice to the other Claimholders, to extend credit and other financial accommodations and lend monies to or for the benefit of any Grantor constituting ABL Obligations or Term Loan Obligations, as applicable in reliance hereof.  The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  All references to any Grantor shall include such Grantor as debtor and debtor-in-possession and any receiver or trustee for any Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no further force and effect upon the earliest to occur of the Discharge of ABL Obligations (in accordance with the provisions hereof) or the Discharge of Term Loan Obligations (in accordance with the provisions hereof).

 

C.            Amendments; Waivers.  No amendment, modification or waiver of any of the provisions of this Agreement by the ABL Agent or the Term Loan Agent shall be deemed to be made unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time.  Notwithstanding the foregoing, the Grantors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights are decreased or its obligations are increased thereby.  For the avoidance of doubt, the joinder of a Term Agent or an ABL Agent as a party to this Agreement in connection with the Refinancing, extension or increase (subject to the provisions of this Agreement) of the Term Loan 

 

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Obligations or the ABL Obligations, as the case may be, shall require the consent of the other Agents then party to this Agreement and the Grantors.

 

D.            Information Concerning Financial Condition of Grantors and their Subsidiaries.

 

1.             The Term Loan Agent and the Term Loan Claimholders, on the one hand, and the ABL Agent and the ABL Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (i) the financial condition of the Grantors and their Subsidiaries and all endorsers or guarantors of the Term Loan Obligations or the ABL Obligations and (ii) all other circumstances bearing upon the risk of nonpayment of the Term Loan Obligations or the ABL Obligations.  The Term Loan Agent and the Term Loan Claimholders shall have no duty to advise the ABL Agent or any ABL Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise, and the ABL Agent and the ABL Claimholders shall have no duty to advise the Term Loan Agent or any Term Loan Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event either Term Loan Agent or any of the Term Loan Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to the ABL Agent or any ABL Claimholder, or the ABL Agent or any of the ABL Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to the Term Loan Agent or any Term Loan Claimholder, it or they shall be under no obligation (w) to make, and such party shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information which, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

 

2.             The Grantors agree that any information provided to the Control Agent, any Term Loan Claimholder or any ABL Claimholder may be shared by such Person with the Control Agent, any Term Loan Claimholder and any ABL Claimholder notwithstanding any request or demand by such Grantor that such information be kept confidential; provided, that such information shall otherwise be subject to the respective confidentiality provisions in the ABL Credit Agreement and the Term Loan Credit Agreement, as applicable.

 

E.             Subrogation.  Each Agent, for itself and on behalf of the Claimholders for whom it act as agent, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of ABL Obligations or the Discharge of Term Loan Obligations, as applicable, has occurred.

 

F.             Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

 

1.             The validity, interpretation and enforcement of this Agreement and the other Credit Documents (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York, but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than New York.

 

2.             The parties hereto irrevocably consent and submit to the exclusive jurisdiction of the courts of the State of New York sitting in New York County, New York and the United States 

 

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District Court of the Southern District of New York, and any appellate court from any thereof, whichever the Agents may elect, and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Credit Document or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the other Credit Documents or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters shall be heard only in the courts described above (except that the Agents and the Claimholders shall have the right to bring any action or proceeding against any Grantor or its or their property in the courts of any other jurisdiction which such Agent or Claimholder deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against any Grantor or its or their property).

 

3.             Each party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at the serving party’s option, by service upon any such party in any other manner provided under the rules of any such courts.

 

4.             EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

5.             The Agents and Claimholders shall not have any liability to any Grantor (whether in tort, contract, equity or otherwise) for losses suffered by such Grantor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order binding on the Agents and the Claimholders that the losses were the result of acts or omissions constituting gross negligence or willful misconduct.  Each Grantor: (i) certifies that neither the Agents, the Claimholders nor any representative, agent or attorney acting for or on behalf of the Agents or the Claimholders has represented, expressly or otherwise, that the Agents and the Claimholders would not, in the event of litigation, seek to enforce any of the waivers provided for in this Agreement or any of the other Credit Documents and (ii) acknowledges that in entering into this Agreement and the other Credit Documents, the Agents and the Claimholders are relying upon, among other things, the waivers and certifications set forth in this Section 8.6 and elsewhere herein and therein.

 

G.            Notices.  All notices to the Control Agent, the Term Loan Claimholders and the ABL Claimholders required under this Agreement shall also be sent to the ABL Agent and the Term Loan 

 

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Agent, respectively.  Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, electronically mailed or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of electronic mail or four Business Days after deposit in the U.S. mail (registered or certified, with postage prepaid and properly addressed).  For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party’s name on Schedule I attached hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

 

H.            Further Assurances.  The ABL Agent, on behalf of itself and the ABL Claimholders, the Term Loan Agent, on behalf of itself and the Term Loan Claimholders, and the Grantors, agree that each of them shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the ABL Agent or the Term Loan Agent may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement.

 

I.              Binding on Successors and Assigns.  This Agreement shall be binding upon the ABL Agent, the other ABL Claimholders, the Term Loan Agent, the other Term Loan Claimholders, the Control Agent and their respective successors and assigns.

 

J.             Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

 

K.            Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

 

L.            Authorization.  By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.

 

M.           No Third Party Beneficiaries.  This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the ABL Agent, the other ABL Claimholders, the Term Loan Agent, the other Term Loan Claimholders, the Control Agent and the Grantors.  No other Person shall have or be entitled to assert rights or benefits hereunder.

 

N.            Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the ABL Claimholders on the one hand and the Term Loan Claimholders on the other hand.  Nothing in this Agreement is intended to or shall impair the rights of any Grantor, or the obligations of any Grantor, which are absolute and unconditional, to pay the ABL Obligations and the Term Loan Obligations as and when the same shall become due and payable in accordance with their terms.

 

O.            Additional Grantors.  Parent shall cause each Grantor that was not in existence on the date hereof or that is acquired after the date hereof to acknowledge and agree to this Agreement upon becoming a Grantor.  Upon execution and delivery by such Grantor of an instrument in the form of 

 

38

 

Exhibit A hereto, such Grantor shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  Notwithstanding anything to the contrary contained herein, the execution and delivery of any such instrument shall not require the consent of any other party hereunder.  The rights and obligations of each party hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

 

[Signature Pages Follow]

 

39

 

IN WITNESS WHEREOF, the parties hereto have executed this ABL/Term Loan Intercreditor Agreement as of the date first written above.

 

	
 
    	
WELLS FARGO CAPITAL   FINANCE, LLC,
    
	
 
    	
as ABL Agent,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

ABL/Term Loan Intercreditor Agreement

 

 

	
 
    	
CREDIT SUISSE AG,   CAYMAN ISLANDS BRANCH,
    
	
 
    	
as Term Loan Agent,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

ABL/Term Loan Intercreditor Agreement

 

 

	
 
    	
CREDIT SUISSE AG,   CAYMAN ISLANDS BRANCH,
    
	
 
    	
as Control Agent,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

ABL/Term Loan Intercreditor Agreement

 

 

	
 
    	
CPG INTERNATIONAL I   INC.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SCRANTON   PRODUCTS, INC.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AZEK BUILDING   PRODUCTS, INC.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PROCELL DECKING   INC.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CPG INTERNATIONAL   INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

ABL/Term Loan Intercreditor Agreement

 

 

	
 
    	
SANTANA PRODUCTS   INC.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CPG SUB I   CORPORATION,
    
	
 
    	
a Delaware   Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
VYCOM CORP.,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SANATEC SUB I   CORPORATION,
    
	
 
    	
a Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

ABL/Term Loan Intercreditor Agreement

 

 

SCHEDULE I - NOTICES

 

WELLS FARGO CAPITAL FINANCE, LLC,
  as ABL Agent

 

12 East 49th Street
 New York, New York 10017
 Attention:  Tom Martin, Portfolio Management — CPG International
 Telephone No.:  (212) 454-4367
 Telecopy No.:  (212) 545-4283

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
  as Term Loan Agent

 

Eleven Madison Avenue
 New York, New York 10010  
 Attention: Sean Portrait
 Telephone No.:  (919) 994-6369
 Telecopy No.:  (212) 332-2291
 Email: agency.loanops@credit-suisse.com

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
  as Control Agent

 

Eleven Madison Avenue
 New York, New York 10010  
 Attention: Sean Portrait
 Telephone No.:  (919) 994-6369
 Telecopy No.:  (212) 332-2291
 Email: agency.loanops@credit-suisse.com

 

GUARANTORS

 

CPG International Inc.
 801 Corey Street
 Scranton, Pennsylvania  18505
 Attention:  Scott Harrison
 Telephone No.:  (570) 558-8000
 Telecopy No.  (570) 558-8201

 

ABL/Term Loan Intercreditor Agreement

 

 

EXHIBIT A

 

ABL/TERM LOAN INTERCREDITOR AGREEMENT SUPPLEMENT

 

This Supplement, dated as of                           , 20    , is delivered pursuant to Section 8.15 of the Intercreditor Agreement referred to below.  The undersigned hereby agrees that this ABL/Term Loan Intercreditor Agreement Supplement may be attached to the ABL/Term Loan Intercreditor Agreement dated as of February 18, 2011 (as amended, restated, amended and restated, modified, renewed, supplemented or extended from time to time, the “Intercreditor Agreement”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Intercreditor Agreement.

 

The undersigned hereby agrees to be added as a party to the Intercreditor Agreement and to be to be bound by all of the terms and conditions of the Intercreditor Agreement in all respects as if the undersigned were an original signatory thereto.  The undersigned hereby further agrees that this ABL/Term Loan Intercreditor Agreement Supplement may be appended to the Intercreditor Agreement.

 

This Intercreditor Agreement Supplement shall be governed by and construed in accordance with the internal laws of the State New York, but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than New York.

 

	
 
    	
Additional Grantor:
    
	
 
    	
 
    
	
 
    	
[NAME OF ADDITIONAL   GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

SCHEDULE 1.76
 TO
 LOAN AND SECURITY AGREEMENT

 

Existing Letters of Credit

 

	
Issuing Bank
    	
 
    	
Beneficiary
    	
 
    	
Applicant
    	
 
    	
Letter of Credit
   Number
    	
 
    	
Expiration
   Date
    	
 
    	
Amount
    	
 
    
	
Wells Fargo Bank,   National Association, successor by merger to Wachovia Bank, National   Association
    	
 
    	
The Travelers   Indemnity Company
    	
 
    	
CPG International   Inc.
    	
 
    	
WSM210245A
    	
 
    	
10/1/2015
    	
 
    	
$
    	
1,430,000.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]