EX-10.2 3 a15-14899_1ex10d2.htm EX-10.2

Exhibit 10.2

 

EXECUTION COPY

 

AMENDMENT NO. 1 TO SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT

 

AMENDMENT NO. 1 TO SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT, dated as of June 24, 2015 (this “Amendment”), is by and among Wilmington Savings Fund Society, FSB, as agent for the Lenders (as hereinafter defined) pursuant to the DIP Term Loan Agreement as defined below (in such capacity, together with its successors and assigns, and any replacement, in such capacity, “Agent”), the parties to the DIP Term Loan Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”), Colt Defense LLC, a Delaware limited liability company (“Colt Defense”), Colt Finance Corp., a Delaware corporation (“Colt Finance”), New Colt Holding Corp., a Delaware corporation (“New Colt”), Colt’s Manufacturing Company LLC, a Delaware limited liability company (“CMC”), Colt Canada Corporation, a Nova Scotia corporation (“Colt Canada”, and together with Colt Defense, Colt Finance, New Colt, CMC and Colt Canada, each individually, a “Borrower” and collectively, “Borrowers”), CDH II Holdco Inc., a Delaware corporation (“CDH II”), Colt Defense Technical Services LLC, a Delaware limited liability company (“CDTS”), and Colt International Coöperatief U.A., a cooperative organized under the laws of the Netherlands (“Colt Netherlands” and, together with CDH II and CDTS, each individually a “Guarantor” and collectively, “Guarantors”).  All terms used herein that are defined in the DIP Term Loan Agreement and not otherwise defined herein shall have the meanings assigned to them in the DIP Term Loan Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Agent, Lenders, Borrowers and Guarantors are parties to that certain Senior Secured Debtor-In-Possession Term Loan Agreement, dated as of June 16, 2015 (as amended, amended and restated modified or supplemented from time to time, the “DIP Term Loan Agreement”), by and among Agent, Lenders, Borrowers and the Guarantors and the other Loan Documents;

 

WHEREAS, the Borrower also has requested that Agent and Lenders make certain amendments to the DIP Term Loan Agreement and grant certain extensions, each as set forth below.

 

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

 

1.                        Definitions.  Any capitalized term used herein and not defined herein shall have the meaning assigned to such term in the DIP Term Loan Agreement.

 

Amendment No. 1 Effective Date” means the date on which each of the conditions to effectiveness specified this Amendment has been satisfied or waived in accordance with the terms of this Amendment.

 



 

2.                        Amendments to DIP Term Loan Agreement.

 

Subject to the fulfillment of the conditions precedent set forth in Section 4 hereto, effective as of the Amendment No. 1 Effective Date, (a) the DIP Term Loan Agreement is hereby amended in its entirety to read in full as set forth on Annex A hereto (the DIP Term Loan Agreement, as so amended, the “Amended DIP Term Loan Agreement”) and (b) the Schedules to the DIP Term Loan Agreement are hereby amended in their entirety to read in full as set forth on Annex B..

 

3.                        Representations and Warranties.  Each Borrower and Guarantor, jointly and severally, hereby represents and warrants to Lender Group as follows:

 

(a)                       This Amendment and each of the documents, instruments and agreements executed and delivered in connection herewith (collectively, with this Amendment, the “Amendment Documents”) have been duly authorized, executed and delivered by all necessary action of each Loan Party party hereto and thereto and constitutes the legal, valid and binding obligations of each such Loan Party party thereto enforceable against each Loan Party in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, moratorium or similar laws relating to or limiting creditors’ rights generally;

 

(b)                       The execution, delivery, and performance by each Loan Party of this Amendment, the Amended DIP Term Loan Agreement and each other Amendment Document to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect where the failure to obtain the foregoing has or could reasonably be expected to have a Material Adverse Change;

 

(c)                        As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Amendment and the transactions contemplated hereby do not and will not (i) violate any provision of federal, provincial, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, where such violation has or could reasonably be expected to have a Material Adverse Change, (ii) violate any provisions of the Governing Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries where any such conflict, breach or default has or could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (v) require any approval of any holders of Equity Interests of a Loan Party or any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect; and

 

(d)                       No Default or Event of Default has occurred and is continuing.

 

4.                        Conditions Precedent.  This Amendment shall only be effective upon the satisfaction of each of the following conditions precedent in a manner reasonably satisfactory to Agent:

 

2



 

(a)                       Agent shall have received each of the following documents, in form and substance satisfactory to Required Lenders, duly executed by the parties thereto, and each such document shall be in full force and effect:

 

(i)                                     the Amendment;

 

(ii)                                  the DIP ABL Credit Agreement as amended and restated on terms substantially similar to the terms of this Amendment (including Annex A) and otherwise acceptable to the Lenders and such agreement shall be, or contemporaneously with the effectiveness of this Amendment, shall be, in full force and effect;

 

(iii)                               a Reaffirmation of Intercreditor Agreement, signed by the lenders and agent under the DIP ABL Credit Agreement, as amended;

 

(b)                       entry of the Second Interim DIP Order (in form and substance satisfactory to the Required Lenders); and

 

(c)                        the Borrowers shall have paid all fees and expenses of Agent and Lenders then due and payable.

 

5.                        RELEASE.  EACH BORROWER, THE OTHER LOAN PARTIES, AND THEIR AFFILIATES ON BEHALF OF THEMSELVES AND THEIR RELATED PARTIES HEREBY ACKNOWLEDGES AND AGREES THAT IT DOES NOT HAVE ANY DEFENSES, COUNTERCLAIMS, OFFSETS, CROSS-COMPLAINTS, CLAIMS OR DEMANDS OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF THE LIABILITY OF BORROWER TO REPAY LENDERS AS PROVIDED IN THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR ANY LENDER PARTY HERETO.  EACH OF BORROWER, THE OTHER LOAN PARTIES, AND THEIR AFFILIATES ON BEHALF OF THEMSELVES AND THEIR RELATED PARTIES HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT, LENDERS PARTY HERETO AND AGENT’S AND EACH LENDER PARTY HERETO’S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, OR EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS FULLY EXECUTED, WHICH ANY OF BORROWER, THE OTHER LOAN PARTIES, AND THEIR AFFILIATES OR THEIR RELATED PARTIES MAY NOW OR HEREAFTER HAVE AGAINST AGENT OR ANY LENDER PARTY HERETO IN THEIR CAPACITIES AS SUCH, AND AGENT’S OR ANY LENDER PARTY HERETO’S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, IN THEIR CAPACITIES AS SUCH, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE

 

3



 

EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THIS AMENDMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION AND EXECUTION OF THIS AMENDMENT.

 

6.                        General.

 

(a)                       Effect of this Amendment.  Except as expressly provided herein, no other changes or modifications to the Loan Documents are intended or implied, and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof.  On and after the date hereof this Amendment shall for all purposes constitute a Loan Document.

 

(b)                       Governing Law.  THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND AS MAY BE APPLICABLE, THE BANKRUPTCY CODE.

 

(c)                        Binding Effect.  This Amendment and each of the other Amendment Documents, shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties hereto.

 

(d)                       Reference to and Effect on the DIP Term Loan Agreement and the other Loan Documents.  On an after the Amendment No. 1 Effective Date, each reference in the DIP Term Loan Agreement to “this Agreement”, “the Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the DIP Term Loan Agreement, and each reference in the other Loan Documents to the “the Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the DIP Term Loan Agreement shall mean and be a reference to the Amended DIP Term Loan Agreement.  Except as specifically amended by this Amendment or in connection herewith, the DIP Term Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.  The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power, remedy of Agent or any Lender under, the DIP Term Loan Agreement or any of the other Loan Documents.

 

(e)                        Counterparts, etc.  Each Amendment Document may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.  Delivery of an executed counterpart of each Amendment Document by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of such Amendment Document.  Any party delivering an executed counterpart of each Amendment Document by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of such Amendment Document but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of such Amendment Document.

 

4



 

[Signature Pages Follow]

 

5



 

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

 

 

COLT DEFENSE LLC

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

COLT FINANCE CORP.

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

NEW COLT HOLDING CORP.

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

COLT’S MANUFACTURING COMPANY LLC

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

COLT DEFENSE TECHNICAL SERVICES LLC

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

[Signature Page — Amendment No. 1 to DIP Term Loan Agreement]

 



 

 

COLT CANADA CORPORATION

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

COLT INTERNATIONAL COÖPERATIEF U.A.

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

CDH II HOLDCO INC.

 

 

 

 

 

By:

/s/ Dennis Veilleux

 

 

 

Name:

Dennis Veilleux

 

 

 

Title:

President and Chief Executive Officer

 

[Signature Page — Amendment No. 1 to DIP Term Loan Agreement]

 



 

 

AGENT AND LENDERS

 

 

 

WILMINGTON SAVINGS FUND SOCIETY, FSB, as Agent

 

 

 

 

 

By:

/s/ Kristin L. Moore

 

 

 

Name:

Kristin L. Moore

 

 

 

Title:

Vice President

 

[Signature Page — Amendment No. 1 to DIP Term Loan Agreement]

 



 

Annex A

 

Amended DIP Term Loan Agreement

 



 

 

SENIOR SECURED SUPERPRIORITY

 

DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT

 

by and among

 

COLT DEFENSE LLC,

 

COLT FINANCE CORP.,

 

NEW COLT HOLDING CORP.,

 

COLT’S MANUFACTURING COMPANY LLC AND

 

COLT CANADA CORPORATION,

 

as Borrowers,

 

THE SUBSIDIARIES OF COLT DEFENSE LLC

 

NAMED AS GUARANTORS HEREIN,

 

as Guarantors,

 

THE LENDERS THAT ARE PARTIES HERETO,

 

as the Lenders,

 

and

 

WILMINGTON SAVINGS FUND SOCIETY, FSB,

 

as Agent

 

Dated as of June 16, 2015,

 

As amended as of June 24, 2015.

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS AND CONSTRUCTION

4

 

 

 

 

1.1

Definitions

4

 

1.2

Accounting Terms

4

 

1.3

Code

5

 

1.4

Construction

5

 

1.5

Schedules and Exhibits

6

 

 

 

2.

TERM LOAN AND TERMS OF PAYMENT

6

 

 

 

 

2.1

[Reserved]

6

 

2.2

Term Loans

6

 

2.3

Requests for Borrowings

7

 

2.4

Payments; Reductions of Commitments; Prepayments

7

 

2.5

[Reserved]

12

 

2.6

Interest Rate: Rate, Payments, and Calculations

12

 

2.7

Crediting Payments; Clearance Charge

13

 

2.8

Designated Account

14

 

2.9

Maintenance of Loan Account; Statements of Obligations

14

 

2.10

Fees

14

 

2.11

[Reserved]

14

 

2.12

[Reserved]

14

 

2.13

Capital Requirements

14

 

2.14

Joint and Several Liability of Borrowers

16

 

 

 

 

3.

CONDITIONS; TERM OF AGREEMENT

18

 

 

 

 

3.1

Conditions Precedent to the Initial Extension of Credit

18

 

3.2

[Reserved]

19

 

3.3

Conditions Precedent to Each Extension of Credit

19

 

3.4

Maturity

19

 

3.5

Effect of Maturity

19

 

 

 

 

4.

REPRESENTATIONS AND WARRANTIES

19

 

 

 

 

4.1

Due Organization and Qualification; Subsidiaries

19

 

4.2

Due Authorization; No Conflict

20

 

4.3

Governmental Consents

20

 

4.4

Binding Obligations; Perfected Liens

21

 

4.5

Title to Assets; No Encumbrances

21

 

4.6

Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims; Locations of Inventory and Equipment

22

 

i



 

 

4.7

Litigation

22

 

4.8

Compliance with Laws

23

 

4.9

No Material Adverse Change

23

 

4.10

[Reserved]

23

 

4.11

Employee Benefits

23

 

4.12

Environmental Matters

24

 

4.13

Intellectual Property

25

 

4.14

Leases

26

 

4.15

Deposit Accounts and Securities Accounts

26

 

4.16

Complete Disclosure

26

 

4.17

Material Contracts

27

 

4.18

Patriot Act; etc.

27

 

4.19

Indebtedness

27

 

4.20

Payment of Taxes

27

 

4.21

Margin Stock

28

 

4.22

Governmental Regulation

28

 

4.23

OFAC

28

 

4.24

Employee and Labor Matters

28

 

4.25

DIP ABL Loan Documents

29

 

4.26

Use of Proceeds

29

 

4.27

Locations of Inventory and Equipment

29

 

4.28

Inventory Records

29

 

4.29

Common Enterprise

29

 

4.30

Orders

30

 

4.31

[Reserved]

30

 

4.32

Insurance

30

 

4.33

[Reserved]

30

 

4.34

Tax Status

30

 

4.35

Bankruptcy Matters

30

 

 

 

 

5.

AFFIRMATIVE COVENANTS

 

31

 

 

 

 

 

5.1

Financial Statements, Reports, Certificates

31

 

5.2

Collateral Reporting

32

 

5.3

Existence

32

 

5.4

Maintenance of Properties

32

 

5.5

Taxes

32

 

5.6

Insurance

32

 

5.7

Inspection

33

 

5.8

Compliance with Laws

34

 

5.9

Environmental

34

 

5.10

Bank of America Accounts

35

 

5.11

[Reserved]

35

 

5.12

Further Assurances

35

 

5.13

Lender Meetings

36

 

5.14

Material Contracts

36

 

5.15

Locations of Inventory and Equipment

36

 

ii



 

 

5.16

Compliance with ERISA and the IRC

36

 

5.17

Canadian Employee Benefits

37

 

5.18

Chief Restructuring Officer

37

 

5.19

[Reserved]

38

 

5.20

[Reserved]

38

 

5.21

Cash Management Order

38

 

5.22

Milestones

38

 

5.23

Post-Closing Obligations

38

 

 

 

 

6.

NEGATIVE COVENANTS

38

 

 

 

 

6.1

Indebtedness

38

 

6.2

Liens

38

 

6.3

Restrictions on Fundamental Changes

38

 

6.4

Disposal of Assets

39

 

6.5

Change Name

39

 

6.6

Nature of Business

39

 

6.7

Certain Payments of Debt and Amendments

39

 

6.8

Change of Control

40

 

6.9

Restricted Payments

40

 

6.10

Accounting Methods

41

 

6.11

Investments

41

 

6.12

Transactions with Affiliates

41

 

6.13

Use of Proceeds

42

 

6.14

Limitation on Issuance of Equity Interests

43

 

6.15

[Reserved]

43

 

6.16

Specified Canadian Pension Plans

43

 

6.17

Sale Leaseback Transactions

43

 

6.18

Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries

43

 

6.19

Limitations on Negative Pledges

44

 

6.20

Employee Benefits

44

 

6.21

[Reserved]

45

 

6.22

New Holdco Expenses

45

 

6.23

Cash in Deposit Accounts

45

 

6.24

[Reserved]

45

 

6.25

Disclosure re Lenders

45

 

6.26

Chapter 11 Cases and CCAA Recognition Proceedings

46

 

 

 

 

7.

FINANCIAL COVENANTS

46

 

 

 

8.

EVENTS OF DEFAULT

47

 

 

 

9.

RIGHTS AND REMEDIES

55

 

 

 

 

9.1

Rights and Remedies

55

 

9.2

Remedies Cumulative

55

 

9.3

Code and Other Remedies

55

 

iii



 

 

9.4

Accounts and Payments in Respect of General Intangibles

58

 

9.5

Proceeds to be Turned over to and Held by Agent

59

 

9.6

Registration Rights

59

 

9.7

Deficiency

60

 

 

 

 

10.

WAIVERS; INDEMNIFICATION

60

 

 

 

 

10.1

Demand; Protest; etc.

60

 

10.2

The Lender Group’s Liability for Collateral

60

 

10.3

Indemnification

61

 

 

 

 

11.

NOTICES

62

 

 

 

12.

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

63

 

 

 

13.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

65

 

 

 

 

13.1

Assignments and Participations

65

 

13.2

Successors

69

 

 

 

 

14.

AMENDMENTS; WAIVERS

69

 

 

 

 

14.1

Amendments and Waivers

69

 

14.2

Replacement of Certain Lenders

71

 

 

 

 

15.

AGENT; THE LENDER GROUP

72

 

 

 

 

15.1

Appointment and Authorization of Agent

72

 

15.2

Delegation of Duties

73

 

15.3

Liability of Agent

73

 

15.4

Reliance by Agent

74

 

15.5

Notice of Default or Event of Default

74

 

15.6

Credit Decision

74

 

15.7

Costs and Expenses; Indemnification

75

 

15.8

Agent in Individual Capacity

76

 

15.9

Successor Agent

76

 

15.10

Lender in Individual Capacity

77

 

15.11

Collateral Matters

77

 

15.12

Restrictions on Actions by Lenders; Sharing of Payments

79

 

15.13

Agency for Perfection

79

 

15.14

Payments by Agent to the Lenders

80

 

15.15

Concerning the Collateral and Related Loan Documents

80

 

15.16

Collateral Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information

80

 

15.17

[Reserved]

81

 

15.18

Several Obligations; No Liability

81

 

15.19

Appointment for the Province of Québec

82

 

15.20

Dutch Parallel Debts

82

 

iv



 

16.

WITHHOLDING TAXES

83

 

 

 

 

16.1

No Setoff; Payments

83

 

16.2

Exemptions

84

 

16.3

Lender Indemnification

86

 

16.4

Refunds

86

 

 

 

 

17.

GENERAL PROVISIONS

87

 

 

 

 

17.1

Effectiveness

87

 

17.2

Section Headings

87

 

17.3

Interpretation

87

 

17.4

Severability of Provisions

87

 

17.5

Right of Setoff

87

 

17.6

Debtor-Creditor Relationship

88

 

17.7

Counterparts; Electronic Execution

88

 

17.8

[Reserved]

88

 

17.9

Confidentiality

88

 

17.10

Lender Group Expenses

89

 

17.11

Survival

90

 

17.12

Patriot Act

90

 

17.13

Integration

90

 

17.14

Administrative Borrower as Agent for Borrowers

90

 

17.15

Currency Indemnity

91

 

17.16

Anti-Money Laundering Legislation

92

 

17.17

Quebec Interpretation

92

 

v



 

EXHIBITS AND SCHEDULES

 

Exhibit A-1

Form of Assignment and Acceptance

 

 

Exhibit B-1

Form of Term Loan Note

 

 

Exhibit C-1

Form of Tax Compliance Certificate

 

 

Exhibit C-2

Form of Tax Compliance Certificate

 

 

Exhibit C-3

Form of Tax Compliance Certificate

 

 

Exhibit C-4

Form of Tax Compliance Certificate

 

 

Exhibit D-1

Form of Borrowing Request

 

 

Exhibit E-1

Form of First Interim DIP Order

 

 

Exhibit F-1

Form of Initial Recognition Order

 

 

Exhibit G-1

Form of Initial Budget

 

 

Schedule A-1

Agent’s Account

 

 

Schedule A-2

Authorized Persons

 

 

Schedule C-1

Commitments

 

 

Schedule D-1

Designated Account

 

 

Schedule E-1

Disqualified Lenders

 

 

Schedule L-1

Exclusive Intellectual Property and other Intangible Licenses

 

 

Schedule P-2

Permitted Liens

 

 

Schedule P-3

Permitted Holders

 

 

Schedule S

Security Documents

 

 

Schedule 1.1

Definitions

 

 

Schedule 3.1

Conditions Precedent to the Initial Extension of Credit

 

 

Schedule 3.3

Conditions Precedent to Each Extension of Credit

 

1



 

Schedule 4.1(b)

Capitalization of Loan Parties

 

 

Schedule 4.2

Due Authorization; No Conflict

 

 

Schedule 4.6(a)

Jurisdiction of Organization

 

 

Schedule 4.6(b)

Chief Executive Offices

 

 

Schedule 4.6(c)

Organizational Identification Numbers

 

 

Schedule 4.6(d)

Commercial Tort Claims

 

 

Schedule 4.6(e)

Locations of Inventory and Equipment

 

 

Schedule 4.7

Litigation

 

 

Schedule 4.9

GAAP

 

 

Schedule 4.11

Benefit Plans

 

 

Schedule 4.12

Environmental Matters

 

 

Schedule 4.13

Intellectual Property

 

 

Schedule 4.15

Deposit Accounts and Securities Accounts

 

 

Schedule 4.19

Permitted Indebtedness

 

 

Schedule 4.20

New Holdco Expenses

 

 

Schedule 4.24

Employee and Labor Matters

 

 

Schedule 4.32

Insurance

 

 

Schedule 5.1

Financial Statements, Reports, Certificates

 

 

Schedule 5.2

Collateral Reporting

 

 

Schedule 5.16

Compliance with ERISA and the IRC

 

 

Schedule 5.22

Milestones

 

 

Schedule 6.12(d)

Agreements with Affiliates

 

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SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT

 

THIS SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT (this “Agreement”), is entered into as of June 16, 2015, as amended as of June 24, 2015, by and among:

 

(i)                                     the lenders identified on the signature pages hereof (each of such lenders, together with their respective successors and permitted assigns, are referred to hereinafter as a “Lender,” as that term is hereinafter further defined);

 

(ii) WILMINGTON SAVINGS FUND SOCIETY, FSB, as agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”);

 

(iii)                               COLT DEFENSE LLC, a Delaware limited liability company (“Parent”), COLT FINANCE CORP., a Delaware corporation (“Colt Finance”), NEW COLT HOLDING CORP., a Delaware corporation (“New Colt”), COLT’S MANUFACTURING COMPANY LLC, a Delaware limited liability company (“Colt’s Manufacturing”), and COLT CANADA CORPORATION, a Nova Scotia unlimited liability company (“Colt Canada”, and together with Parent, Colt Finance, New Colt and Colt’s Manufacturing, each a debtor and a debtor-in-possession, and each individually, a “Borrower” and, collectively, “Borrowers”); and

 

(iv)                              CDH II HOLDCO INC., a Delaware corporation (“CDH II”), COLT DEFENSE TECHNICAL SERVICES LLC, a Delaware limited liability company (“CDTS”), and COLT INTERNATIONAL COOPERATIEF U.A., a cooperative organized under the laws of the Netherlands registered with the trade register of the Chamber of Commerce in the Netherlands under number 56651317 (“Colt Netherlands” and, together with CDH II and CDTS and any other Guarantor party hereto from time to time, each a debtor and a debtor-in-possession, and each individually a “Guarantor” and, collectively, “Guarantors”).

 

WITNESSETH:

 

WHEREAS, on June 14, 2015 (the “Petition Date”), the Borrowers and the Guarantors (collectively, the “Debtors” and each individually, a “Debtor”) each commenced a case (collectively, the “Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”);

 

WHEREAS, on June 17, 2015, Colt Holding Company LLC as the Foreign Representative on behalf of the Debtors, commenced a recognition proceeding under Part IV of the CCAA in the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court”) to recognize in Canada the Chapter 11 Cases as foreign main or non-main proceedings (the “CCAA Recognition Proceedings”);

 

WHEREAS, prior to the Petition Date, the Prepetition Term Lenders provided financing to the Borrowers pursuant to the Prepetition Term Loan Agreement, among the Borrowers, the Guarantors, Wilmington Savings Fund Society, FSB, as administrative agent (in such capacity, the “Prepetition Term Agent”), and the financial institutions or entities from time to time party thereto (collectively, the “Prepetition Term Lenders”);

 

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WHEREAS, each of the Guarantors guaranteed the Borrowers’ obligations under the Prepetition Term Loan Agreement pursuant to the Security Documents (as defined in the Prepetition Term Loan Agreement); and

 

WHEREAS, the Debtors have requested the Lenders make post-petition loans and advances and provide other financial or credit accommodations to the Debtors, and the Lenders have agreed, subject to the conditions set forth herein, to extend a senior secured term loan facility to the Borrowers, comprised of an up to $33,333,333 delayed-draw term loan facility (the “Facility”).

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1                                                 Definitions.  Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2                                                 Accounting Terms.  Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations hereunder shall be computed unless otherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the financial statements of Parent most recently received by the Lenders prior to the date hereof; provided, however, that (a) upon the adoption by Parent of IFRS as required by Parent’s independent certified public accountants and notification by Administrative Borrower to Agent of such adoption (the “IFRS Adoption”) or (b) if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such the IFRS Adoption or Accounting Change or in the application thereof, then Agent, at the direction of the Required Lenders, and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such IFRS Adoption or Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such IFRS Adoption or Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement, including the covenants, shall be calculated in accordance with GAAP as in effect, and as applied by Parent and its Subsidiaries as if no such IFRS Adoption or Accounting Change had occurred.  In the case of the IFRS Adoption or the Accounting Change until such covenants are amended in a manner satisfactory to Parent, Agent and the Required Lenders (i) all calculations made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence immediately prior to such adoption and (ii) financial statements delivered pursuant to Section 5.1 shall be accompanied by a reconciliation showing the adjustments made to calculate such financial ratios and financial covenants.  Notwithstanding anything to the contrary contained herein, all financial statements delivered

 

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hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof.  Notwithstanding anything to the contrary contained in GAAP or any interpretations or other pronouncements by the Financial Accounting Standards Board or otherwise, the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that does not include any qualification, explanation, supplemental comment or other comment concerning the ability of the applicable person to continue as a going concern or the scope of the audit.  When used herein, the term “financial statements” shall include the notes and schedules thereto.  Whenever the term “Parent” or “Borrowers” is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent or Borrowers and their Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.  For purposes of calculations pursuant to the terms of this Agreement, GAAP will be deemed to treat operating leases in a manner consistent with the current treatment under GAAP as in effect on the Closing Date, notwithstanding any modification or interpretive changes thereto that may occur hereafter.

 

1.3                                                 Code.  Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein and any terms used in this Agreement that are defined in the PPSA and pertaining to Collateral consisting of assets of any Canadian Loan Party shall be construed and defined as set forth in the PPSA unless otherwise defined herein; provided, however, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

 

1.4                                                 Construction.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 14.1 or is

 

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cured if such Event of Default is capable of being cured.  Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations, the Secured Obligations (as defined in the Security Documents) or the Guarantied Obligations (as defined in the applicable Guaranty) shall mean the repayment in full in cash or immediately available funds of all of the Obligations other than unasserted indemnification Obligations.  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 Agent or any Lender, such period shall in any event consist of at least one full day.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise or the Required Lenders otherwise determine, amounts expressed in US Dollars at any time when used with respect to Foreign Subsidiaries or similar matters shall be deemed to mean the US Dollar Equivalent of such amounts at such time.

 

1.5                                                 Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

 

2.                                      TERM LOAN AND TERMS OF PAYMENT.

 

2.1                                                 [Reserved].

 

2.2                                                 Term Loans.

 

(a)                                 Subject to the terms and conditions of this Agreement (including Sections 3.1, 3.2 and 3.3) and the Approved Budget, each Lender with a Term Loan Commitment agrees (severally, not jointly or jointly and severally), solely to the extent requested by the Borrowers pursuant to Section 2.3, to make term loans (collectively, the “Tranche A Term Loans”) to Borrowers in an aggregate amount up to such Lender’s Pro Rata Share of the Term Loan Amount as follows: (i) an initial Tranche A Term Loan to the Borrowers on the Closing Date (the “Initial Tranche A Term Loan”) of such Lender’s Pro Rata Share of $4,000,000 (ii) on or after the date of entry of the Second Interim DIP Order, one additional Tranche A Term Loan to the Borrowers on the date specified in the applicable Borrowing Request (the “Second Tranche A Term Loan”) of such Lender’s Pro Rata Share of an aggregate principal amount equal to $2,666,666, and (iii) on and after entry of the Final DIP Order, (x) one deemed Term Loan (the “Tranche B Term Loan”) to the Borrowers on the date of the Tranche A Term Loan made in accordance with the succeeding clause (y) in an amount equal to $20,000,000 (the “Tranche B Term Loan Amount”), which Tranche B Term Loan shall be deemed made by the Lenders to the Borrowers on such date and shall be deemed to have prepaid $20,000,000 of principal amount of the Prepetition Term Loans, and (y) one additional Tranche A Term Loan to the Borrowers on the date specified in the applicable Borrowing Request of such Lender’s Pro Rata Share of an aggregate principal amount equal to $6,666,667.

 

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(b)                                 Each Term Loan made by each Lender shall be evidenced by this Agreement and, if requested by a Lender, a Term Note payable to such Lender or its registered assigns in the original principal amount of such Term Loan.

 

(c)                                  The outstanding unpaid principal balance of, and all accrued and unpaid interest on, the Term Loans shall be due and payable on the earlier of (i) the Maturity Date and (ii) the date of the acceleration of the Term Loans in accordance with the terms hereof.  Any principal amount of a Term Loan that is repaid or prepaid may not be reborrowed.  All principal of, interest on, and other amounts payable in respect of each Term Loan, including any premiums, fees, expenses or other additional amounts owed, shall constitute Obligations hereunder.

 

2.3                                                 Requests for Borrowings.  Other than in respect of a deemed Tranche B Term Loan, the Administrative Borrower shall give the Agent irrevocable written notice of a request for Borrowing (which notice must be received by the Agent prior to 10:00 a.m., New York City time, 3 Business Days before the proposed date of Borrowing for all notices of a request for Borrowing other than of the Initial Tranche A Term Loan and the Second Tranche A Term Loan) in the form of a Borrowing Request.  Each such Borrowing Request shall specify the following information in compliance with Sections 2.2 and 3.1:

 

(a)                                 the Borrower requesting the Tranche A Term Loan;

 

(b)                                 the aggregate amount of the requested Borrowing, which shall be (i) until entry of the Final DIP Order and Final DIP Recognition Order, in an aggregate amount not exceeding the lesser of the amount permitted to be borrowed pursuant to the First Interim DIP Order (which is to be recognized by the Initial Recognition Order) or the Second Interim DIP Order, as applicable, and up to the amount set forth in the Approved Budget for such period and (ii) following entry of the Final DIP Order and Final DIP Recognition Order, up to the amount set forth in the Approved Budget for such period;

 

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

 

(d)                                 the account to which the proceeds of such Borrowing are to be disbursed.

 

2.4                                                 Payments; Reductions of Commitments; Prepayments.

 

(a)                                 Payments by Borrowers.

 

(i)                               Except as otherwise expressly provided herein, all payments by any Borrower shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (New York time) on the date specified herein.  Any payment received by Agent later than 11:00 a.m. (New York time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

 

(ii)                            Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not

 

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make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the interest rate then applicable to the Term Loans for each day from the date such amount is distributed to such Lender until the date repaid.

 

(b)                                 Apportionment and Application.

 

(i)                               So long as no Application Event has occurred and is continuing and except as otherwise provided herein, including with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) entitled to such payments and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Obligation to which a particular fee or expense relates.  All payments to be made hereunder by Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing, to repay the remaining Term Loans (which payments shall be applied against the Tranche A Term Loans in the inverse order of maturity and then to the Tranche B Term Loan), and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law (subject to Section 2.4(b)(v), Section 2.4(d)(ii) and Section 2.4(e)).

 

(ii)                            At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent in respect of the Obligations and all proceeds of Collateral received by Agent shall be applied as follows:

 

(A)                               first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

 

(B)                               second, to pay any fees then due to Agent under the Loan Documents until paid in full,

 

(C)                               third, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

 

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(D)                               fourth, ratably, to pay any fees (including any fees, premiums and penalties specified in Section 2.10) then due to any of the Lenders under the Loan Documents until paid in full,

 

(E)                                fifth, to pay interest due in respect of the Tranche A Term Loans until paid in full and then Tranche B Term Loans until paid in full,

 

(F)                                 sixth, to pay the principal of the Tranche A Term Loans until paid in full and then the Tranche B Term Loans until paid in full,

 

(G)                               seventh, to pay any other Obligations other than Obligations owed to Defaulting Lenders, until paid in full,

 

(H)                              eighth, ratably to pay any Obligations owed to Defaulting Lenders, and

 

(I)                                   ninth, to Borrowers or such other Person entitled thereto under applicable law.

 

(iii)                         In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment made by any Borrower to Agent and specified by such Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

 

(iv)                        For purposes of Section 2.4(b)(ii), “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

 

(v)                           In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, then the terms and provisions of this Section 2.4 shall control and govern.

 

(c)                                  Reduction of Commitments.

 

(i)                               [Reserved].

 

(ii)                            Termination of the Tranche A Term Loan Commitments.  The Tranche A Term Loan Commitments shall terminate by the amount of each Tranche A Term Loan extended upon the making of such Tranche A Term Loan.

 

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Notwithstanding the foregoing, all of the Tranche A Term Loan Commitments shall automatically terminate at the earlier of (x) 5:00 p.m., New York time, on June 19, 2015 if the Closing Date shall have not occurred by such time and (y) upon the occurrence of a Change of Control.

 

(d)                                 Optional Prepayments.

 

(i)                               [Reserved].

 

(ii)                            Term Loans.  The Term Loans may not be voluntarily prepaid, in whole or in part, by the Borrowers without the written consent of the Required Lenders.

 

(e)                                  Mandatory Prepayments.

 

(i)                               [Reserved].

 

(ii)                            Dispositions.  Within 5 Business Days of the date of receipt by Parent or any of its Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or disposition by Parent or any of its Subsidiaries of assets (including casualty losses or condemnations but excluding (x) sales or dispositions which qualify as Permitted Dispositions under clauses (a),(b), (e), to the extent relating to Restricted Payments made to Loan Parties, (l), to the extent relating to Permitted Investments of the type described under clause (a) of the definition thereof, (m) or (n) of the definition of Permitted Dispositions, Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by such Person in connection with such sales or dispositions.  Nothing contained in this Section 2.4(e)(ii) shall permit Parent or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 6.4.

 

(iii)                         Extraordinary Receipts.  Within 3 Business Days of the date of receipt by Parent or any of its Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of such Extraordinary Receipts, net of any reasonable and documented expenses incurred in collecting such Extraordinary Receipts.

 

(iv)                        Indebtedness and Equity Issuances .  Within 3 Business Days of the date of incurrence or issuance by Parent or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness) or issuance of Equity Interests, Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such incurrence or issuance.  The provisions of this Section 2.4(e)(iv) shall not be deemed to be implied

 

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consent to any such incurrence or issuance otherwise prohibited by the terms of this Agreement.

 

(v)                           Change of Control.  Borrowers shall immediately prepay the outstanding Obligations in the event that a Change of Control shall have occurred.

 

(vi)                        Waivable Mandatory Prepayments.  Anything contained herein to the contrary notwithstanding, in the event Borrowers are required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Term Loan pursuant to this Section 2.4(e), not less than 5 Business Days prior to the date (the “Required Prepayment Date”) on which Borrowers are required to make such Waivable Mandatory Prepayment, Administrative Borrower shall notify Agent of the amount of such prepayment, and Agent will promptly thereafter notify each Lender of the amount of such Lender’s Pro Rata Share of such Waivable Mandatory Prepayment and such Lender’s option to refuse such amount.  Each such Lender may exercise such option by giving written notice to Administrative Borrower and Agent of its election to do so on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Lender that does not notify Administrative Borrower and Agent of its election to exercise such option on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option).  On the Required Prepayment Date, Borrowers shall pay to Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied (A) in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Lenders that have elected not to exercise such option, to prepay the Term Loans of such Lenders (which prepayment shall be applied to prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii)) and (B) to the extent of any excess, to Borrowers for working capital and general corporate purposes.

 

(f)                                   Application of Payments.

 

(i)                               Any prepayments required pursuant to Section 2.4(e) shall be preceded by irrevocable written notice delivered to Agent by 11:00 A.M., New York City time, not less than 3 Business Days prior to the date of such prepayment, specifying the underlying reason for the mandatory prepayment and the amount of the same.

 

(ii)                            Subject to Section 2.4(f)(iii), each prepayment pursuant to Section 2.4(d) or Section 2.4(e) shall (A) so long as no Application Event shall have occurred and be continuing, be applied, to the outstanding principal amount of the remaining Tranche A Term Loans until paid in full and then Tranche B Term Loans until paid in full, and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

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(iii)                         With respect to any mandatory prepayment required by Section 2.4(e)(ii):  (A) if the proceeds are from any sale or disposition of, or insurance or any condemnation, taking or other casualty with respect to, any DIP ABL Priority Collateral, such proceeds shall be applied (x) first, to the DIP ABL Obligations, to the extent required by the ABL Credit Agreement until paid in full, and (y) second, to the principal of the Tranche A Term Loans, until paid in full and then Tranche B Term Loans until paid in full, and (B) if the proceeds are from the sale or disposition of, or insurance or any condemnation, taking or other casualty with respect to, any other assets of the Loan Parties not described in subclause (A), such proceeds shall be applied to the principal of the Tranche A Term Loans, until paid in full and then Tranche B Term Loans until paid in full.

 

2.5                                                 [Reserved].

 

2.6                                                 Interest Rate:  Rate, Payments, and Calculations.

 

(a)                                 Tranche A Term Loans Cash Interest.  Except as provided in Section 2.6(c), all Obligations (other than the principal balance outstanding of Tranche B Term Loans) that have been (or were intended to be) charged to the Loan Account pursuant to the terms hereof shall bear interest at a rate per annum equal to 12.50% (“Cash Interest”).

 

(b)                                 Tranche B Term Loans Interest.  Except as provided in Section 2.6(c), the outstanding principal balance of Tranche B Loans shall bear interest at a rate per annum equal to 10% payable in cash and 4.0% payable in kind by adding such in kind amount to the outstanding balance of Tranche B Term Loans.

 

(c)                                  Default Rate.  Upon the occurrence and during the continuation of an Event of Default, all Obligations shall bear interest at a per annum rate equal to two (2) percentage points above the per annum rates otherwise applicable thereto.

 

(d)                                 Payment.  All interest, and all fees payable hereunder or under any of the other Loan Documents and all costs and expenses payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first day of each month (“Interest Payment Date”) at any time that Obligations are outstanding, except as otherwise provided herein.  The Borrowers shall deliver written notice to the Agent at least 5 Business Days prior to each Interest Payment Date setting forth a calculation of the Cash Interest to be paid on such Interest Payment Date.  The Agent shall have the right to review and adjust any such calculations.  Each Borrower hereby authorizes Agent, from time to time without prior notice to such Borrower, to charge all interest, fees, costs, expenses and other amounts payable hereunder or under any of the other Loan Documents when due and payable to the Loan Account.

 

(e)                                  Computation.  All interest shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed.  For the purposes of the Interest Act (Canada), the yearly rate of interest to which any rate calculated on the basis of a period of time different from the actual number of days in the year (360 days, for example) is equivalent is the stated rate multiplied by the actual number of days in the year (365 or 366 days) and divided by the number of days in the shorter period (360 days, in the example).

 

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(f)                                   Intent to Limit Charges to Maximum Lawful Rate.

 

(i)                               In no event shall the aggregate “interest” (as defined in Section 347 (the “Criminal Code Section”) of the Criminal Code (Canada)), payable to any member of the Lender Group under this Agreement or any other Loan Document exceed the effective annual rate of interest lawfully permitted under the Criminal Code Section on the “credit advanced” (as defined in such section) under this Agreement or any other Loan Document.  Further, if any payment, collection or demand pursuant to this Agreement or any other Loan Document in respect of such “interest” is determined to be contrary to the provisions of the Criminal Code Section, such payment, collection, or demand shall be deemed to have been made by mutual mistake of the affected Borrower and the affected member of the Lender Group and such “interest” shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the Criminal Code Section to result in a receipt by such member of the Lender Group of interest at a rate not in contravention of the Criminal Code Section, such adjustment to be effected, to the extent necessary, as follows:

 

(A)                               firstly, by reducing the amounts or rates of interest required to be paid to that member of the Lender Group; and

 

(B)                               then, by reducing any fees, charges, expenses and other amounts required to be paid to the affected member of the Lender Group which would constitute “interest”.

 

(ii)                            Notwithstanding the above terns of this Section 2.6(f), and after giving effect to all such adjustments, if any member of the Lender Group shall have received an amount in excess of the maximum permitted by the Criminal Code Section, then the affected Borrower shall be entitled to obtain reimbursement from that member of the Lender Group in an amount equal to such excess. For greater certainty, to the extent that any charges, fees or expenses are held to be within such meaning of “interest”, such amounts shall be pro-rated over the period of time to which they relate or otherwise over the period from the date hereof to the date on which all of the Obligations are irrevocably repaid.

 

2.7                                                 Crediting Payments; Clearance Charge.  The receipt of any payment item by Agent shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to Agent’s Account or unless and until such payment item is honored when presented for payment.  Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly.  Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 11:00 a.m. (New York time).  If any payment item is received into Agent’s Account on a non-Business Day or after 11:00 a.m. (New York time) on a Business Day, it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

 

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2.8                                                 Designated Account.  Agent is authorized to make any advance of the Term Loans in accordance with this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d).  Borrowers agree to establish and maintain the Designated Account for the purpose of receiving the proceeds of each Tranche A Term Loan requested by Borrowers and made by the Lenders hereunder.  Unless otherwise agreed by Agent and Borrowers, any Tranche A Term Loan requested by Borrowers and made by the Lenders hereunder shall be made to the Designated Account.

 

2.9                                                 Maintenance of Loan Account; Statements of Obligations.  Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with the Term Loans made by the Lenders to Borrowers or for Borrowers’ account and with all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for Borrowers’ account.  Agent shall make available to Borrowers quarterly statements regarding the Loan Account, including the principal amount of the Term Loan interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after Agent first makes such a statement available to Borrowers, the Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in such statement.  The Borrowers shall continue to have such obligations notwithstanding any failure by the Agent to maintain the Loan Account.

 

2.10                                          Fees.  Borrowers shall pay to Agent for the account of the applicable Person, as and when due and payable under the terms of each Fee Letter, the fees and amounts set forth in the Fee Letters.  Such fees and amounts shall be fully earned when paid and shall not be refundable under any circumstances.

 

2.11                                          [Reserved]

 

2.12                                          [Reserved]

 

2.13                                          Capital Requirements.

 

(a)                                 If, after the date hereof, any Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital or reserve requirements for banks or bank holding companies, or any change in the interpretation, implementation, or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s obligations hereunder to a level below that which such Lender

 

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or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify Administrative Borrower and Agent thereof.  Following receipt of such notice, Borrowers agree to pay such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by such Lender of a statement in the amount and setting forth in reasonable detail such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error).  In determining such amount, such Lender may use any reasonable averaging and attribution methods.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided, that, (A) no Borrower shall be required to compensate a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Lender notifies Administrative Borrower of such law, rule, regulation or guideline giving rise to such reductions and of such Lender’s intention to claim compensation therefor and (B) if such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  For purposes of this Section 2.13(a), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Basel Committee on Banking Supervision (of any successor or similar authority), the Bank for International Settlements and (in each case) all rules, regulations, orders, requests, guidelines or directives in connection therewith are deemed to have been enacted and become effective after the date of this Agreement.

 

(b)                                 If any Lender requests additional or increased costs referred to in Section 2.12 or amounts under Section 2.13(a) or sends a notice under Section 2.12(i) relative to changed circumstances (any such Lender, an “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.12 or Section 2.13(a), as applicable, and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment.  If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.12 or Section 2.13(a), as applicable, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.12 or Section 2.13(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.12 or Section 2.13(a), as applicable, may seek a substitute Lender acceptable to the Required Lenders to purchase the Obligations owed to such Affected Lender and such Affected Lender’s Commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to

 

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the Replacement Lender its Obligations and Commitments, pursuant to an Assignment and Acceptance Agreement, and upon such purchase by the Replacement Lender, such Replacement Lender shall be deemed to be a “Lender” for purposes of this Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement.

 

2.14                        Joint and Several Liability of Borrowers.

 

(a)                                 Each Borrower is accepting joint and several liability for the Obligations hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, 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.

 

(b)                                 Each Borrower, jointly and severally, 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 (including any Obligations arising under this Section 2.14), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.

 

(c)                                  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 until such time as all of the Obligations are paid in full.

 

(d)                                 Subject to the entry of the First Interim DIP Order and, if applicable, the Initial Recognition Order, the Obligations of each Borrower under the provisions of this Section 2.14 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.14(d)) or any other circumstances whatsoever.  Further, each Borrower waives each of the following, to the fullest extent permitted by law, (1) any defence based upon (a) the lack of authority of any Borrower; (b) the unenforceability, invalidity, illegality or extinguishment of all or any part of the Obligations, or any security or other guarantee for the Obligations or any failure of the Agent or any Lender to take proper care or act in a commercially reasonable manner in respect of any security for the Obligations or any collateral subject to the security, including in respect of any disposition of the Collateral or any set-off of any of the Borrowers’ bank deposits against the Obligations; (c) any act or omission of any of the Borrowers or any other person, including the Agent, that directly or indirectly results in the discharge or release of any of the Borrowers or any other Person or any of the Obligations or any security for the Obligations; or (d) the Agent’s present or future method of dealing with any of the Borrowers or any Guarantor or any security (or any collateral subject to the security) or other guarantee for the Obligations, (2) any right (whether now or hereafter existing) to require the Agent or a Lender, as a condition to the enforcement of this Agreement (a) to accelerate the Obligations or proceed and exhaust any recourse against any of the Borrowers or any other Person; (b) to realize on any security that it holds; (c) to marshall the assets of any of the Borrowers or any of the Guarantors;

 

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or (d) to pursue any other remedy that each Borrower or Guarantor may not be able to pursue itself and that might limit or reduce such Borrower or such Guarantor’s burden, (3) presentment, demand, protest and notice of any kind including, without limitation, notices of default, (4) any claims, set-off or other rights that any Borrower or any Guarantor may have against the Agent or any of the Lenders, whether or not related to the transactions contemplated by this Agreement or any of the other Loan Documents, (5) all suretyship defences and rights of every nature otherwise available under any jurisdiction, including the benefit of discussion and of division, and (6) all other rights and defences (legal or equitable) the assertion or exercise of which would in any way diminish the liability of any of the Borrowers under this joint and several liability obligation or otherwise under this Agreement other than the payment in full of the Obligations.

 

(e)                                  Except as otherwise expressly provided in this Agreement, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement).  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 payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by any Borrower to comply with any of its respective Obligations, 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 2.14 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.14, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.14 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Borrower under this Section 2.14 shall not be diminished or rendered unenforceable by any bankruptcy, insolvency, winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or any Agent or Lender.

 

(f)                                   Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such Borrower will continue to keep

 

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informed of Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g)                                  The provisions of this Section 2.14 are made for the benefit of Agent, each member of the Lender Group, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower 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 2.14 shall remain in effect until all of 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 Agent or any Lender in connection with the Chapter 11 Cases, the CCAA Recognition Proceedings, the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.14 will forthwith be reinstated in effect, as though such payment had not been made.

 

(h)                                 Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash.  Any claim which any Borrower may have against any other Borrower with respect to any payments to any Agent or any member of the Lender Group hereunder 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 and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization, winding up, arrangement, or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

 

(i)                                     Each Borrower hereby agrees that after the occurrence and during the continuance of any Default or Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with Section 2.4(b).

 

3.                                      CONDITIONS; TERM OF AGREEMENT.

 

3.1                                                 Conditions Precedent to the Initial Extension of Credit.  The obligation of each Lender to make its Initial Tranche A Term Loan provided for hereunder is subject to

 

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the fulfillment, to the satisfaction of each Lender and Agent of the conditions precedent set forth on Schedule 3.1.

 

3.2                                                 [Reserved].

 

3.3                                                 Conditions Precedent to Each Extension of Credit.  The obligation of each Lender to make each extension of credit provided for hereunder is subject to the fulfillment, to the satisfaction of each Lender and Agent, of the conditions precedent set forth on Schedule 3.3.

 

3.4                                                 Maturity.  This Agreement shall continue in full force and effect for a term ending on the Maturity Date.  The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and upon notice by Agent to Administrative Borrower or any other Loan Party upon the occurrence and during the continuation of an Event of Default.

 

3.5                                                 Effect of Maturity.  On the Maturity Date, all of the Obligations immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations in full.  No termination of the obligations of the Lender Group (other than payment in full of the Obligations) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full.  When all of the Obligations have been paid in full, Agent (upon the direction of the Required Lenders) will, at Borrowers’ sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent and Loan Parties shall execute and deliver to Agent a release of Agent and Lenders in form and substance satisfactory to Agent and the Required Lenders.

 

4.                                      REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Loan Party makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date and on each date on which there is a Borrowing of Term Loans, and such representations and warranties shall survive the execution and delivery of this Agreement.

 

4.1                                                 Due Organization and Qualification; Subsidiaries.

 

(a)                                 Each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any jurisdiction where the failure to be so qualified could reasonably be expected to result in a Material Adverse Change, (iii) upon entry of the Orders, as applicable, has all requisite power

 

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and authority to own and operate its material properties, to carry on its material business as now conducted and as proposed to be conducted and (iv) upon entry of the Orders, as applicable, has all requisite power and authority to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

 

(b)                                 Set forth on Schedule 4.1(b) are the authorized Equity Interests of each Loan Party and each direct Subsidiary of such Loan Party, by class, and a description of the number of shares of each such class that are issued and outstanding, in each case, as of the Closing Date.  Other than as described on Schedule 4.1(b), there are no subscriptions, options, warrants, or calls relating to any shares of any Borrower’s or Subsidiary’s Equity Interests, including any right of conversion or exchange under any outstanding security or other instrument.  No Borrower nor any Subsidiary of Borrowers is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.

 

(c)                                  All of the outstanding Equity Interests of each Subsidiary of a Loan Party have been validly issued and are fully paid and, except with respect to the shares of Colt Canada, non-assessable.

 

(d)                                 Neither Borrowers nor any of their Subsidiaries are subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any Loan Party’s Equity Interests or any security convertible into or exchangeable for any such Equity Interests.

 

4.2                                                 Due Authorization; No Conflict.

 

(a)                                 As to each Loan Party, upon entry of the Orders, as applicable, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.

 

(b)                                 Upon entry of the Orders, as applicable, as to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any provision of any federal, provincial, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) violate any provisions of the Governing Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (v) require any approval of any holders of Equity Interests of a Loan Party or, except as set forth on Schedule 4.2, any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect.

 

4.3                                                 Governmental Consents.  Upon entry of the Orders, as applicable, the execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the

 

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Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date.

 

4.4                                                 Binding Obligations; Perfected Liens.

 

(a)                                 Subject to the entry of the Orders and the terms thereof, each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

(b)                                 Agent’s Liens (created pursuant to the Loan Documents together with the Orders and held for the benefit of the Secured Parties) are validly created Liens.  Agent’s Liens on the Collateral (created pursuant to the Loan Documents together with the Orders and held for the benefit of the Secured Parties) will be legal, valid, enforceable, perfected, first priority Liens, subject as to priority with respect to the ABL Priority Collateral, the terms of the DIP Intercreditor Agreement and Permitted Prior Liens, upon entry of the First Interim DIP Order, Second Interim DIP Order or Final DIP Order, as applicable, and the Canadian Orders. Pursuant to the terms of the First Interim DIP Order, Second Interim DIP Order and/or Final DIP Order, and the Canadian Orders, no filing or other action will be necessary to perfect or protect such Liens and security interests on the Collateral. Pursuant to and to the extent provided in the First Interim DIP Order, Second Interim DIP Order the Final DIP Order and the Canadian Orders, the Obligations of the Loan Parties under this Agreement will: (i) constitute Superpriority Claims and allowed administrative expense claims in the Chapter 11 Cases under section 364(c) of the Bankruptcy Code, having priority over all administrative expense claims and unsecured claims against such Loan Parties now existing or hereafter arising, of any kind whatsoever, including, without limitation, all administrative expense claims of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code and all super-priority administrative expense claims granted to any other Person (including avoidance actions and the proceeds thereof), subject only to the Carve-Out and the terms of the DIP Intercreditor Agreement; and (ii) constitute a first-ranking charge in the CCAA Recognition Proceedings against the property of all Loan Parties in Canada now existing or hereafter arising, of any kind or nature whatsoever.

 

4.5                                                 Title to Assets; No Encumbrances.  Each of the Loan Parties and its Subsidiaries has (a) good and marketable title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets or property necessary to conduct its business or used in the ordinary course of business.  All of such assets are free and clear of Liens except for Permitted Liens.

 

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4.6                                                 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims; Locations of Inventory and Equipment.

 

(a)                                 The name (within the meaning of the Code or PPSA, as applicable) and jurisdiction of organization of each Loan Party and each of its Subsidiaries is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(b)                                 The chief executive offices of each Loan Party and each of its Subsidiaries are located at the addresses indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(c)                                  Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(d)                                 As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any commercial tort claims that exceed $50,000 or more in any one case or $100,000 or more in the aggregate, except as set forth on Schedule 4.6(d).

 

(e)                                  Each Loan Party’s Inventory and Equipment (other than (x) vehicles, Inventory and Equipment out for repair or in-transit, (y) Inventory and Equipment owned by Persons other than Loan Parties or having an aggregate book value of less than $50,000 and (z) Inventory consigned pursuant to the DCAM Consignment described in clause (b) of the definition of Permitted Dispositions) is located only at the locations identified on Schedule 4.6(e).

 

4.7                                                 Litigation.

 

(a)                                 Other than the Chapter 11 Cases and the CCAA Recognition Proceedings, there are no actions, suits, or proceedings pending or, to the knowledge of any Loan Party, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.

 

(b)                                 Other than the Chapter 11 Cases and the CCAA Recognition Proceedings, Schedule 4.7 sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $50,000 that, as of the Closing Date, is pending or, to the knowledge of any Loan Party, after due inquiry, threatened against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the procedural status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties’ and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

 

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4.8                                                 Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable material laws, rules, regulations, executive orders, or codes (including Environmental Laws) in any material respect except as set forth on Schedule 4.11 or (b) is subject to or in default in any material respect with respect to any material final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

 

4.9                                                 No Material Adverse Change.  All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by any Borrower to the Lenders have been prepared in accordance with GAAP (except (x) in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments, (y) as set forth on Schedule 4.9 and (z) as such statements relate to the Bargaining Unit Defined Benefit Plan Calculation Error) and present fairly in all material respects (except as such statements expressly relate to the Bargaining Unit Defined Benefit Plan Calculation Error), the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. Since December 31, 2012, except the filing of the Chapter 11 Cases and the commencement of the CCAA Recognition Proceedings, and, in each case, the imposition of the automatic stay and CCAA stay, as applicable, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Change.

 

4.10                                          [Reserved].

 

4.11                                          Employee Benefits.

 

(a)                                 Except as set forth on Schedule 4.11, no Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Pension Plan.

 

(b)                                 Except as set forth on Schedule 4.11, (i) each Loan Party and each of the ERISA Affiliates has complied in all material respects with the terms of ERISA, the IRC and all other applicable laws regarding each Employee Benefit Plan, (ii) no material liability to the PBGC (other than for the payment of current premiums which are not past due) by any Loan Party or ERISA Affiliate has been incurred or is reasonably expected by any Loan Party or ERISA Affiliate to be incurred with respect to any Pension Plan, (iii) no Loan Party nor any of its Subsidiaries maintains, sponsors, administers, contributes to, participates in or has any material liability in respect of any Specified Canadian Pension Plan, nor has any such Person ever maintained, sponsored, administered, contributed or participated in any Specified Canadian Pension Plan, (iv) the Canadian Pension Plans are duly registered under the Income Tax Act (Canada) and any other applicable laws which require registration have been administered in accordance with the Income Tax Act (Canada) and such other applicable law and no event has occurred which could reasonably be expected to cause the loss of such registered status, (v) all obligations of the Loan Parties and their Subsidiaries (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Specified Canadian Pension Plans and the funding agreements therefor have been performed on a timely basis, and (vi) all contributions or premiums required to be made or paid by the Loan Parties and

 

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their Subsidiaries to the Specified Canadian Pension Plans have been made on a timely basis in accordance with the terms of such plans and all applicable

 

(c)                                  Each Employee Benefit Plan that is intended to qualify under Section 401(a) of the IRC has received a favorable determination letter from the Internal Revenue Service or an application for such letter is currently being processed by the Internal Revenue Service. To the best knowledge of each Loan Party and the ERISA Affiliates after due inquiry, except as set forth on Schedule 4.11, nothing has occurred which would reasonably be expected to prevent, or cause the loss of, such qualification.

 

(d)                                 Except as set forth on Schedule 4.11, no Notification Event which could reasonably be expected to result in any material liability to any Loan Party or ERISA Affiliate exists or has occurred in the past six (6) years.

 

4.12                                          Environmental Matters.  Except as set forth on Schedule 4.12:

 

(a)                                 The operation of the business of, and each of the properties owned or operated by, each Loan Party are in compliance with all Environmental Laws and each Loan Party holds and is in compliance with all Environmental Permits required under Environmental Law, except where any such non-compliance with Environmental Law or failure to hold or comply with such Environmental Permits individually or in the aggregate could not reasonably be expected to result in a Material Adverse Change.

 

(b)                                 No Environmental Action is pending, or to each Loan Party’s knowledge is threatened, against a Loan Party, any predecessor in interest or any facilities that may have received Hazardous Materials generated by any Loan Party or any predecessor in interest.

 

(c)                                  No Environmental Action has been asserted, or to each Loan Party’s knowledge is threatened, against a Loan Party, any predecessor in interest or any facilities that may have received Hazardous Materials generated by any Loan Party or any predecessor in interest.

 

(d)                                 There has been no Release of Hazardous Materials and there are no Hazardous Materials present in violation of Environmental Law at any properties currently, or to the knowledge of any Loan Party, formerly owned or operated by any Loan Party or any predecessor in interest, or at any disposal or treatment facility that received Hazardous Materials generated by any Loan Party or a predecessor in interest, which individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.

 

(e)                                  No property now, or to the knowledge of any Loan Party, formerly owned or operated by a Loan Party has been used as treatment or disposal site for any Hazardous Material.

 

(f)                                   No Loan Party has received written notice that an Environmental Lien has attached to any revenues or to any assets or to any property owned or operated by a Loan Party.

 

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(g)                                  No Environmental Law regulates, or requires notification to a Governmental Authority of the Closing Date Transactions

 

(h)                                 To the knowledge of each Loan Party, there are no facts, conditions or circumstances, including any contractual obligations, that could reasonably be expected to result in an Environmental Action or Environmental Liabilities asserted against a Loan Party or which would require a Loan Party to perform a Remedial Action, which individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.

 

(i)                                     The Loan Parties have made available to Lenders true and complete copies of all material environmental reports, audits, and investigations in any Loan Party’s possession or under its reasonable control related to each Real Property and the operations of business of the Loan Parties.

 

4.13                                          Intellectual Property.

 

(a)                                 Each Loan Party owns, licenses or otherwise has the right to use all Intellectual Property that is necessary for the operation of its business as conducted prior to the Petition Date, without infringement upon, misappropriation of, dilution of, or conflict with the rights of any other Person or other Loan Party and attached hereto as Schedule 4.13 is a true, correct, and complete listing of material Intellectual Property.

 

(b)                                 To the knowledge of the Loan Parties, no Loan Party nor any of its agents or representatives has engaged in any conduct, or omitted to perform any necessary act, the result of which would invalidate any material Intellectual Property of a Loan Party or hinder its enforcement.  To the knowledge of the Loan Parties, no other Person has infringed or is infringing any material Intellectual Property of a Loan Party.  For the avoidance of doubt, all registered trademarks or service marks of a Loan Party shall be deemed material Intellectual Property.

 

(c)                                  None of the Loan Parties’ registered Intellectual Property that is material to the operation of a Loan Party’s business is currently involved in any reexamination, reissue, interference, invalidity, opposition or cancellation proceeding before any patent office or patent authority, including the United States Patent and Trademark Office and the Canadian Intellectual Property Office, or any similar proceeding, and no such proceedings are pending.

 

(d)                                 All of the Loan Parties’ Intellectual Property identified in the Perfection Certificate is subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and, to the knowledge of the Loan Parties, is valid and enforceable.

 

(e)                                  Other than Permitted Liens, all rights with respect to the Intellectual Property owned by each Loan Party are free of all Liens and are fully assignable by the Loan Parties to any Person, without payment, consent of any Person or other condition or restriction.

 

(f)                                   (i) No claim has been asserted in writing and is pending by any Person challenging or questioning the use of any of the Loan Parties’ Intellectual Property, or the validity or effectiveness of any such Intellectual Property, and (ii) no claim has been asserted in

 

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writing and is pending by any Person challenging or questioning the use of any material Intellectual Property owned by any of the Loan Parties, or the validity or effectiveness of any such material Intellectual Property.  Each Loan Party has made or performed all filings, recordings and other acts and has paid all maintenance fees, annuities and any other required fees and taxes, as deemed necessary by such Loan Party in its reasonable business judgment, to maintain and protect its interest in all Intellectual Property owned by such Loan Party in full force and effect.

 

(g)                                  To the knowledge of the Loan Parties, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon, misappropriates, dilutes or conflicts with, any rights owned by any other Person.  No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Loan Parties, threatened.

 

4.14                                          Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and except, to the extent constituting a default, as a result of the commencement of the Chapter 11 Cases and the commencement of the CCAA Recognition Proceedings, all of such material leases are valid and subsisting and no material default beyond any applicable cure period by the applicable Loan Party or its Subsidiaries exists under any of them.

 

4.15                                          Deposit Accounts and Securities Accounts.  Set forth on Schedule 4.15 is a listing of all of the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.

 

4.16                                          Complete Disclosure.  All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry and historical information related to the Bargaining Unit Defined Benefit Plan Calculation Error provided prior to February 9, 2015) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections delivered to the Lenders on the date hereof represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future

 

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performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to the Lenders.

 

4.17                                          Material Contracts.  Except as set forth on Schedule 4.11, each Material Contract is not in default due to the action or inaction of the applicable Loan Party or any of its Subsidiaries other than as a result of the commencement of the Chapter 11 Cases or CCAA Recognition Proceedings.

 

4.18                                          Patriot Act; etc.  To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001) (the “Patriot Act”), and (c) the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the regulations promulgated thereunder.  No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

4.19                                          Indebtedness.  Set forth on Schedule 4.19 is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date (other than unsecured Indebtedness outstanding immediately prior to the Closing Date with respect to any one transaction or a series of related transactions in an amount not to exceed $50,000, provided, that all such Indebtedness, in the aggregate, shall not exceed $250,000) that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

 

4.20                                          Payment of Taxes.  All tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all Taxes shown on such tax returns to be due and payable and all governmental assessments, fees and other charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable, except (a) to the extent the validity of such Taxes shall be the subject of a Permitted Protest or (b) for failures which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change. No Loan Party knows of any proposed tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; provided, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. Set forth on Schedule 4.20 is a summary list of legal, accounting and other out-of-pocket costs and expenses incurred or reimbursed by the Loan Parties on or prior to February 9, 2015 in connection with, related to, or arising from any evaluation or analysis related to (i) any

 

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discharge of indebtedness income arising from any exchange offer in respect of the Senior Notes and (ii) the formation of New Holdco, the merger described in Section 6.3(a)(v) and the effectuation of the contemplated structure associated therewith (such type of costs and expenses referred to herein, the “New Holdco Expenses”).

 

4.21                                          Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the Term Loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve.

 

4.22                                          Governmental Regulation.  No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal, state or foreign statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.23                                          OFAC.  No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

4.24                                          Employee and Labor Matters.  Except as set forth on Schedule 4.24, there is (a) no unfair labor practice complaint pending or, to the knowledge of Borrowers, threatened against Parent or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or, to the knowledge of Borrowers, threatened against Parent or its Subsidiaries which arises out of or under any collective bargaining agreement, (b) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against Parent or its Subsidiaries, (c) to the knowledge of Borrowers, after due inquiry, no union representation question existing with respect to the employees of Parent or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of Parent or its Subsidiaries, or (d) any liability or obligation incurred by Parent or any of its Subsidiaries under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied.  The hours worked and payments made to employees of Parent or its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.  All material payments due from Parent or its Subsidiaries on account of wages and employee health and welfare insurance and

 

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other benefits have been paid or accrued as a liability on the books of Parent, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

4.25                                          DIP ABL Loan Documents.  Borrowers have delivered or made available to the Lenders true and correct copies of the DIP ABL Loan Documents. The transactions contemplated by the DIP ABL Loan Documents will be, contemporaneously with the Closing Date, consummated in accordance with their respective terms and all of the representations and warranties of Parent or its Subsidiaries in the DIP ABL Loan Documents are true and correct in all material respects as of the Closing Date or, to the extent that any such representation or warranty relates solely to an earlier date, as of such earlier date.

 

4.26                                          Use of Proceeds. Borrowers have at all times used the proceeds of the Loans and all other cash on hand in accordance with Section 6.13.

 

4.27                                          Locations of Inventory and Equipment.  The Inventory and Equipment (other than (x) vehicles, Inventory and Equipment out for repair or in-transit, (y) Inventory and Equipment owned by Persons other than Loan Parties or having an aggregate book value of less than $25,000 and (z) Inventory consigned pursuant to the DCAM Consignment described in clause (b) of the definition of Permitted Disposition) of the Loan Parties and their Subsidiaries are not stored with a bailee, warehouseman, or similar party and are located only at, or in-transit between or to, the locations identified on Schedule 4.6(e).

 

4.28                                          Inventory Records.  Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book value thereof.

 

4.29                                          Common Enterprise.  The Loan Parties make up a related organization of various entities constituting a single economic and business enterprise so that the Loan Parties share an identity of interests such that any benefit received by any one of them benefits the others.  The Loan Parties render services to or for the benefit of certain of the other Loan Parties and purchase or sell and supply goods to or from or for the benefit of certain of the others.  Certain of the Loan Parties have the same chief executive office, certain common officers and directors and generally do not provide consolidating financial statements to creditors.  The successful operation and condition of each of the Loan Parties is dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party.  Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies.  Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party (and the entering into of joint and several obligations and the giving of any guarantee or Lien to Agent for the benefit of the Secured Parties in connection therewith) is within its

 

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purpose, in furtherance of its direct and/or indirect business interests, will be of direct and/or indirect benefit to such Loan Party, and is in its best interest.

 

4.30                                          Orders.  Each of the First Interim DIP Order and, upon entry of the Initial Recognition Order, the Initial Recognition Order, the Second Interim DIP Order, or the Final DIP Order and Final DIP Recognition Order (from after the date the Final DIP Order and Final DIP Recognition Order, as applicable, are entered) are in full force and effect and have not been vacated, reversed or rescinded or, without the prior written consent of the Required Lenders, in its sole discretion, amended or modified and no appeal or leave to appeal of such order has been timely filed or, if timely filed, no stay pending such appeal or leave to appeal is currently effective.

 

4.31                                          [Reserved].

 

4.32                                          Insurance.  The Loan Parties keep their respective properties adequately insured and maintain (a) insurance to such extent and against such risks, including fire, as is customary with companies in the same or similar businesses, (b) workmen’s compensation insurance in the amount required by applicable law, (c) public liability insurance, which shall include product liability insurance, in the amount customary with companies in the same or similar business against claims for personal injury or death on properties owned, occupied or controlled by it, and (d) such other insurance as may be required by law (including, without limitation, against larceny, embezzlement or other criminal misappropriation).  Schedule 4.32 sets forth a list of all insurance maintained by the Loan Parties on the Closing Date.

 

4.33                                          [Reserved].

 

4.34                                          Tax Status.  No notice under Section 36 of the Tax Collection Act (Invorderingswet 1990) has been given by any Dutch Loan Party.

 

4.35                                          Bankruptcy Matters.

 

(a)                                 The Chapter 11 Cases were commenced on the Petition Date and the CCAA Recognition Proceedings were or will be commenced upon entry of the Initial Recognition Order, respectively, in accordance with applicable law and proper notice thereof under the circumstances, and proper notice of (x) the motion or application (as applicable) seeking approval of the Loan Documents and entry of the Orders, as applicable and (y) the hearings for the approval of the First Interim DIP Order and the Second Interim DIP Order have been held by the Bankruptcy Court.

 

(b)                                 After the entry of the Orders, as applicable, and pursuant to and to the extent permitted in the Orders, as applicable, the Obligations will (i) constitute allowed superpriority administrative expense claims in the Chapter 11 Cases having priority over all administrative expense claims and unsecured claims against the Borrowers and other Loan Parties now existing or hereafter arising, of any kind whatsoever, including, without limitation, all administrative expense claims of the kind specified in sections 326, 330, 331, 503(b), 506(c) (upon entry of the Final DIP Order), 507(a), 507(b), 726, or any other provision of the

 

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Bankruptcy Code or otherwise, as provided under section 364(c)(l) of the Bankruptcy Code, subject, in all respects, to the Carve-Out and, to the extent contemplated by the Orders, as applicable, and the DIP Intercreditor Agreement, the Obligations (as defined in the DIP ABL Credit Agreement) under the DIP ABL Credit Agreement; and (ii) constitute a first-ranking charge in the CCAA Recognition Proceedings against all property of all Loan Parties in Canada now existing or hereafter arising, of any kind or nature whatsoever.

 

(c)                                  After the entry of the Orders, as applicable, and pursuant to and to the extent provided in the Orders, as applicable, the Obligations will be secured by a valid and perfected first priority Lien on all of the Debtors’ pre-Petition Date and post-Petition Date assets, subject, in all respects, to the Carve-Out and to Liens in favor of the DIP ABL Agent, to the extent contemplated by the Orders, as applicable, the Permitted Prior Liens, and the DIP Intercreditor Agreement.

 

(d)                                 After the entry of each Order, such Order is in full force and effect, is not subject to appeal, leave to appeal or reconsideration process (as applicable) and has not been reversed, stayed, modified or amended in any manner without the Lenders’ consent.

 

(e)                                  Each Approved Budget and all projected consolidated balance sheets, income statements and cash flow statements of Parent and its Subsidiaries delivered to the Agent and the Lenders were prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed in good faith by Parent to be fair in light of the conditions existing at the time of delivery of such report or projection (it being understood that any projections or estimates made in the items described in this subsection (e) are not to be viewed as facts and are subject to significant uncertainties and contingencies, that no assurance can be given that any such projections or estimates will be realized, that actual results may differ from projected results and such differences may be material).

 

5.                                      AFFIRMATIVE COVENANTS.

 

Each Loan Party covenants and agrees that, until payment in full of the Obligations, the Loan Parties shall and shall cause each of their Subsidiaries to comply with each of the following:

 

5.1                                                 Financial Statements, Reports, Certificates.

 

(a)                                 Deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 no later than the times specified therein. Parent agrees that it shall (i) not change its fiscal year and (ii) maintain a system of accounting that enables Parent to produce financial statements in accordance with GAAP.

 

(b)                                 Not later than 1:00 p.m. on the last Business Day of each calendar week, the Borrowers shall deliver to Agent and each Lender a report (each, a “Weekly Report”) setting forth the actual cash flows for the immediately preceding calendar week with respect to each line item in the Approved Budget; provided, that each Weekly Report delivered during the week after a Test Date shall also set forth such cash flows for the Test Period most recently ended, together

 

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with the percentage, if any, by which such actual cash flows for each line item exceeded or were less than the cash flows set forth in the Approved Budget for such Test Period.

 

(c)                                  As soon as available and in any event not later than the last Business Day of each calendar week, an update to the Approved Budget then in effect, in form and substance satisfactory to the Required Lenders, for the subsequent 13-week period following such Business Day (it being understood that such update to the Approved Budget then in effect shall contain no differences to the subsequent 12-week period from the Approved Budget then in effect); provided, however, that commencing with the last Business Day of the fourth full calendar week after the Closing Date and on every the last Business Day of the fourth calendar week thereafter, the Borrower may provide an update to the Approved Budget then in effect which reforecasts the subsequent 13-week period), which proposed updated reforecasted budget (once approved by the Required Lenders) shall be deemed the Approved Budget then in effect; provided, that no approval of the Required Lenders shall be required with respect to any proposed update to the Approved Budget to the extent the previously approved line items therein remain unchanged for the same period set forth in the Approved Budget then in effect.

 

5.2                                                 Collateral Reporting.  Provide Agent (and if so requested by Agent or the Required Lenders, with copies for each Lender) with each of the reports set forth on Schedule 5.2 at the times specified therein.

 

5.3                                                 Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4, at all times maintain and preserve in full force and effect (a) its existence, (b) all rights and franchises, licenses and permits related to any Intellectual Property that are necessary or otherwise material to the conduct of its business as currently conducted, unless otherwise consented to by the Required Lenders, and (c) all other rights and franchises, licenses and permits that are necessary or otherwise material to the conduct of the business of Parent and its Subsidiaries; provided, however, that no Loan Party or any of its Subsidiaries shall be required to preserve any such right or franchise, licenses or permits under clause (c) if such Person’s board of directors (or similar governing body) shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person.

 

5.4                                                 Maintenance of Properties.  Maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, except for ordinary wear, tear, and casualty and Permitted Dispositions.

 

5.5                                                 Taxes.  Cause all Taxes imposed, levied, or assessed against any Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full when due (taking into account any valid and effective extension for payment thereof), except (a)  to the extent that the validity of such Tax shall be the subject of a Permitted Protest, (b) delinquent Taxes outstanding in an aggregate amount not to exceed $100,000 at any one time or (c) to the extent such payment is stayed by the Chapter 11 Cases or CCAA Recognition Proceedings, as applicable.

 

5.6                                                 Insurance.  Each Loan Party shall, at such Loan Party’s expense, (a) maintain insurance respecting each Loan Party’s assets wherever located, covering liabilities, losses or damages as are customarily are insured against by other Persons engaged in same

 

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or similar businesses and similarly situated and located. All such policies of insurance shall be with financially sound and reputable insurance companies reasonably acceptable to the Required Lenders (it being agreed that, as of the Closing Date, the insurance companies identified on Schedule 4.32 are acceptable to the Required Lenders) and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably satisfactory to the Required Lenders (it being agreed that the amount, adequacy, and scope of the policies of insurance of the Loan Parties in effect as of the Closing Date are acceptable to the Required Lenders and it being further agreed and understood that with respect to insurance in respect of director and officer liability, the amount, adequacy and scope of the policies of such insurance shall be determined in the sole discretion of Parent). All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard noncontributory “lender” or “secured party” clause and are to contain such other provisions as Agent or the Required Lenders may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies (and any payments received by Agent shall be applied by Agent or otherwise returned to Borrowers in accordance with the provisions set forth in this Agreement). All certificates of property and general liability insurance are to be delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements (other than directors and officers policies and workers compensation) in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation. If any Loan Party fails to maintain such insurance, Agent (upon the direction of the Required Lenders) shall arrange for such insurance, but at such Loan Party’s expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrowers shall give Agent prompt notice of any loss exceeding $50,000 covered by any Loan Party’s casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent (upon the direction of the Required Lenders) shall have the sole right to file claims under any property and general liability insurance policies (and not under business interruption policies) in respect of the Collateral (other than any ABL Priority Collateral), to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. The Loan Parties shall give prior written notice to the Required Lenders prior to any change (outside of the ordinary course consistent with past practice) to any insurance policy listed on Schedule 4.32 related to executive risk or directors and officers insurance (including any change to coverage, amount insured or deductible).

 

5.7                                                 Inspection.  Permit Agent and the Lenders and each of their duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to conduct appraisals and valuations, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times (during

 

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normal business hours) and intervals as Agent (upon the direction of the Required Lenders) shall designate and, so long as no Default or Event of Default exists and is continuing, with reasonable prior notice to Administrative Borrower all at such times and intervals as Agent (upon the direction of the Required Lenders) shall request, all at Borrower’s expense; provided, that, as to such examinations and appraisals of Intellectual Property of the Loan Parties, unless an Event of Default exists or has occurred and is continuing, no more than one (1) examination and one (1) appraisal of Intellectual Property in any 12 month period (commencing as of the Closing Date) shall be at the expense of Borrowers.

 

5.8                                                 Compliance with Laws.  Except as set forth on Schedule 4.11, comply with the requirements of all applicable material laws, rules, regulations, and orders of any Governmental Authority in all material respects.

 

5.9                                                 Environmental.

 

(a)                                 To the extent applicable, comply with all requirements pursuant to and within the timeframes set forth in Connecticut’s Transfer Act (Conn. Gen. Stat. §22a-134, et seq.) as a result of any prior transactions and the Closing Date Transactions, including but not limited to retaining a Licensed Environmental Professional and completing all required filings, authorizations, approvals, notifications, site investigations, and remediation.  The Loan Parties shall provide Agent with copies of all material documents filed with, and material responses from, the Connecticut Department of Environmental Protection, with respect to Connecticut’s Transfer Act.

 

(b)                                 Keep any property either owned or operated by any Loan Party free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens.

 

(c)                                  Comply, and use reasonable efforts to cause all tenants and other Persons who may come upon any property owned, leased or operated by a Loan Party to comply, with all Environmental Laws in all material respects and provide to Agent documentation of such compliance which Agent reasonably requests.

 

(d)                                 Maintain and comply in all material respects with all Environmental Permits required under applicable Environmental Laws.

 

(e)                                  Take all commercially reasonable steps to prevent any Release of Hazardous Materials in violation of Environmental Law at, on or migrating from the any property owned, leased or operated by the Loan Parties.

 

(f)                                   Undertake or cause to be undertaken any and all Remedial Actions in response to any Environmental Claim, Release of Hazardous Materials in violation of Environmental Law or violation of Environmental Law, to the extent required by Environmental Law or any Governmental Authority and to repair or remedy any environmental condition or impairment to the Real Property consistent with its current use and, upon request of Agent or the Required Lenders, provide Agent with copies of all data, information and reports generated in connection therewith as Agent or the Required Lenders may request.

 

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(g)                                  Promptly, but in any event within 5 Business Days of its receipt thereof, (i) provide Agent with written notice of any of the following:  (A) any Release of which any Loan Party has knowledge of a Hazardous Material in any reportable quantity from or onto property owned or operated by any Loan Party; (B) written notice that an Environmental Lien has been filed against any of the real or personal property of any Loan Party, (C) commencement of any Environmental Action or written notice that an Environmental Action will be filed against any Loan Party that such Loan Party reasonably estimates liability in excess of $50,000; (D) material violation of Environmental Laws in, at, on, under or from any part of the Real Property or any improvements constructed thereon; and (E) discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Real Property that could reasonably be expected to cause such Real Property or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws; and (ii) provide such other documents and information as reasonably requested by Agent in relation to any matter pursuant to this Section 5.9(g);

 

(h)                                 At the request of the Required Lenders or Agent (at the direction of the Required Lenders) upon the Required Lenders’ sole determination that a Release of Hazardous Materials in excess of a reportable quantity or a violation of Environmental Law may have occurred at, onto or from the Real Property, or upon an Event of Default, the Loan Parties shall provide to Agent and the Lenders, within thirty (30) calendar days after such request, at the sole expense of the Loan Parties, a Phase I Report for any of the Real Property prepared by an environmental consulting firm acceptable to the Required Lenders and, if recommended by the Phase I Report, a Phase II environmental site assessment report .  Without limiting the generality of the foregoing, if the Required Lenders determine at any time that a risk exists that any requested Phase I Report and Phase II report will not be provided within the time referred to above, Agent and/or the Required Lenders may retain an environmental consulting firm to prepare such reports at the sole expense of the Loan Parties, and the Loan Parties shall provide reasonable access to Agent and/or the Required Lenders, such firm and any agents or representatives to their respective properties to undertake such Phase I or Phase II environmental site assessment.

 

5.10                                          Bank of America Accounts. With respect to any and all deposit or other accounts maintained with Bank of America, N.A. (the “Bank of America Accounts”), cause there to be at all times a standing instruction and direction requiring Bank of America, N.A. to transfer all amounts and funds deposited in the Bank of America Accounts on a daily basis to a deposit account subject to a Control Agreement, in each case, in a manner reasonably satisfactory to the Required Lenders.

 

5.11                                          [Reserved].

 

5.12                                          Further Assurances.  At any time upon the reasonable request of the Required Lenders execute and/or deliver to Agent and the Required Lenders any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel and all other documents (the “Additional Documents”) that are required by applicable law, or that Agent or the Required Lenders may reasonably request, in form and substance reasonably satisfactory to Agent and the Required Lenders, (i) to create, perfect, and maintain Agent’s

 

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Liens in all of the assets of Parent and its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), (ii) to create and perfect Liens in favor of Agent in any Real Property acquired by Parent or its Subsidiaries after the Closing Date, (iii) in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents and (iv) to create and perfect Liens in favor of Agent in the Equity Interests of Parent owned by CDH II; provided, that, no other pledge shall be required if the costs to the Loan Parties of providing such documents are unreasonably excessive (as determined by the Required Lenders in consultation with Borrowers) in relation to the benefits of Agent and the Lenders of the benefits afforded thereby.  To the maximum extent permitted by applicable law, if any Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, such Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s name, as applicable, and authorizes Agent to file such executed Additional Documents in any appropriate filing office.  In furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as Agent or the Required Lenders may reasonably request from time to time (a) in connection with any merger, amalgamation, consolidation, or reorganization permitted under Section 6.3, delivery to Agent of the agreements and documentation set forth in Section 5.11 above, or (b) to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of the Loan Parties (subject to exceptions and limitations contained in the Loan Documents).

 

5.13                                          Lender Meetings.  On a weekly basis (or less frequently as the Required Lenders shall agree), hold a meeting (at a mutually agreeable location and time or, at the option of the Required Lenders, by conference call) with all Lenders (and any financial advisor retained by the Agent or any Lender) who choose to attend such meeting at which meeting shall be reviewed, among other things, the financial results of Parent and the financial condition of Parent and its Subsidiaries and actual results versus projections in the Approved Budget; provided, however, that following the occurrence of a Default or an Event of Default, such meetings shall be held as often as the Required Lenders shall request.

 

5.14                                          Material Contracts.  Upon Agent’s request provide Agent with copies of each (a) Material Contract entered into since February 9, 2015, and (b) each material amendment or modification of any Material Contract entered into since February 9, 2015.

 

5.15                                          Locations of Inventory and Equipment.  Keep each Loan Parties’ Inventory and Equipment (other than (x) vehicles, Inventory and Equipment out for repair or in-transit, (y) Inventory and Equipment owned by Persons other than Loan Parties or having an aggregate book value of less than $10,000 and (z) Inventory consigned pursuant to the DCAM Consignment described in clause (b) of the definition of Permitted Dispositions) only at the locations identified on Schedule 4.6(b) or Schedule 4.6(e); provided, that, any Borrower may amend Schedule 4.6(e) or Schedule 4.6(e) so long as such amendment occurs by written notice to Agent not less than 10 days after the date on which such Inventory or Equipment is moved to such new location.

 

5.16                                          Compliance with ERISA and the IRC.  In addition to and without limiting the generality of Section 5.8, (a) comply in all material respects with applicable

 

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provisions of ERISA and the IRC with respect to all Employee Benefit Plans, (b) except in connection with a Bargaining Unit Defined Benefit Plan Calculation Error to the extent it does not result in a Bargaining Unit Defined Benefit Plan Calculation Error Event, without the prior written consent of the Required Lenders, not take any action or fail to take action the result of which could reasonably be expected to result in a Loan Party or ERISA Affiliate incurring a material liability to the PBGC or to a Multiemployer Plan (other than to pay contributions or premiums payable in the ordinary course), (c) not participate in any prohibited transaction that could reasonably be expected to result in a material civil penalty, excise tax, fiduciary liability or correction obligation under ERISA or the IRC, and (d) furnish to Agent upon the Required Lenders’ written request such additional information about any Employee Benefit Plan for which any Loan Party or ERISA Affiliate could reasonably expect to incur any material liability. With respect to each Pension Plan (other than a Multiemployer Plan) except as could not reasonably be expected to result in material liability to the Loan Parties and except in connection with a Bargaining Unit Defined Benefit Plan Calculation Error to the extent it does not result in a Bargaining Unit Defined Benefit Plan Calculation Error Event, the Loan Parties and the ERISA Affiliates shall (i) satisfy in full and in a timely manner, without incurring any late payment or underpayment charge or penalty and without giving rise to any Lien, all of the contribution and funding requirements of the IRC and of ERISA, and (ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty, all premiums required pursuant to ERISA. In addition to and without limiting the foregoing take all actions required under Schedule 5.16 in the manner and on the time frames set forth therein.

 

5.17                                          Canadian Employee Benefits.

 

(a)                                 Cause the Canadian Pension Plans to be duly registered under the Income Tax Act (Canada) and any other applicable laws which require registration and cause such Canadian Pension Plans to be administered in accordance with the Income Tax Act (Canada) and such other applicable law and maintain such registered status.

 

(b)                                 To the extent authorized by the Chapter 11 Cases or the CCAA Recognition Proceedings, cause each Loan Party and its Subsidiaries to perform its obligations (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and cause the funding agreements therefor to be performed on a timely basis.

 

(c)                                  Cause all contributions or premiums required to be made or paid by the Loan Parties and their Subsidiaries to the Canadian Pension Plans to be made or paid on a timely basis in accordance with the terms of such plans and all applicable laws.

 

5.18                                          Chief Restructuring Officer.  Maintain at all times (other than as a result of not being approved by the Bankruptcy Court), a chief restructuring officer acceptable to the Required Lenders (it being understood that Keith Maib of Mackinac Partners is acceptable to Required Lenders) with responsibilities reasonably satisfactory to the Required Lenders.

 

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5.19                                          [Reserved].

 

5.20                                          [Reserved].

 

5.21                                          Cash Management Order.  Keep the Cash Management Order in effect at all times on and after the Closing Date and such orders of the Canadian Court recognizing the Cash Management Order, in effect at all times following their entry.

 

5.22                                          Milestones.  Comply with the milestones set forth on Schedule 5.22:

 

5.23                                          Post-Closing Obligations.  On or before the date that is thirty (30) days after the Closing Date (or such later date as permitted by the Required Lenders), the Loan Parties shall satisfy each of the following post-closing covenants to the satisfaction of the Required Lenders, subject to waiver in accordance with Section 10.5:

 

(a)                                 Control Agreements. The Borrowers and the other Loan Parties shall cause to be executed and delivered to the Agent and the Lenders executed copy of the Control Agreements, in form and substance to the Required Lenders, with respect to such accounts as reasonably determined by the Required Lenders.

 

6.                                      NEGATIVE COVENANTS.

 

Each Loan Party covenants and agrees that, until payment in full of the Obligations, the Loan Parties will not and will not permit any of their Subsidiaries to do any of the following:

 

6.1                                                 Indebtedness.  Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

 

6.2                                                 Liens.  Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

 

6.3                                                 Restrictions on Fundamental Changes.

 

(a)                                 Enter into any merger, amalgamation, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests except for mergers, consolidations and amalgamations (i) between US Loan Parties, (ii) between Canadian Loan Parties, (iii) between Dutch Loan Parties, provided that, a Borrower is the surviving entity of such merger, amalgamation or consolidation and (iv) between Subsidiaries of Parent which are not Loan Parties.

 

(b)                                 Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution).

 

(c)                                  Suspend or terminate all or a substantial portion of its or their business.

 

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(d)                                 Notwithstanding the foregoing, Section 6.5 or any other provision of the Loan Documents to the contrary, Parent shall not change its legal form to a C corporation or otherwise change its classification to that of a corporation for federal income tax purposes (such changes, a “Conversion”).

 

6.4                                                 Disposal of Assets.  Convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any assets or Equity Interests of Parent or its Subsidiaries, except for Permitted Dispositions.

 

6.5                                                 Change Name.  Change the name, organizational identification number, jurisdiction of organization or organizational identity of any Loan Party; provided, that, any Loan Party may change its name so long as such Loan Party gives 30 days prior written notice to Agent of such change.

 

6.6                                                 Nature of Business.  Make any change in the nature of its or their business as presently conducted on the Closing Date or acquire any properties or assets that are not reasonably related to the conduct of such business activities.

 

6.7                                                 Certain Payments of Debt and Amendments.

 

(a)                                 Make any payment, prepayment, redemption, retirement, defeasance, purchase or sinking fund payment or other acquisition for value of any of its Indebtedness or make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Indebtedness as a result of any asset sale, change of control issuance and sale of debt and equity securities or similar event, or giving notice of any notice with respect to any of the foregoing, other than the Indebtedness hereunder, under the other Loan Documents, or under the DIP ABL Loan Documents or the Prepetition ABL Loan Documents (solely to the extent of a Permitted ABL Roll-Up) (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:

 

(i)                               [Reserved].

 

(ii)                            Loan Parties may make regularly scheduled payments of interest in respect of Indebtedness permitted under clauses (w), (x), and (y) of the definition of “Permitted Indebtedness” as and when due in respect of such Indebtedness in accordance with the terms of the Prepetition Term Loan Documents, the DIP ABL Loan Documents and, until the Permitted ABL Roll-Up, the Prepetition ABL Loan Documents in effect as of the Closing Date;

 

(iii)                         [Reserved];

 

(iv)                        Loan Parties may make payments expressly set forth in the Approved Budget;

 

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(v)                           [Reserved];

 

(vi)                        [Reserved]; and

 

(vii)                     [Reserved].

 

(b)                                 Borrowers shall not, and shall not permit any of their Subsidiaries, directly or indirectly, to amend, modify, or change (or permit the amendment, modification or other change in any manner of) any of the terms or provisions of:

 

(i)                               (x) any agreements, documents or instruments in respect of any subordinated indebtedness and (y) Indebtedness permitted pursuant to clause (w);

 

(ii)                            the certificate of incorporation, memorandum and articles of association, certificate of formation, limited liability agreement, limited partnership agreement or other organizational documents of any Loan Party;

 

(iii)                         the Prepetition Term Loan Documents, the DIP ABL Loan Documents and the Prepetition ABL Loan Documents, except in accordance with the terms of the DIP Intercreditor Agreement;

 

(iv)                        the Management Agreement, the Consulting Agreement or any other agreement listed on Schedule 6.12(d) except with the prior written consent of the Required Lenders.

 

6.8                                                 Change of Control.  Cause, permit, or suffer, directly or indirectly, any Change of Control.

 

6.9                                                 Restricted Payments.  Declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:

 

(a)                                 Parent and each Subsidiary may declare and make dividend payments or other distributions payable in the Equity Interests of such Person (other than Disqualified Equity Interests);

 

(b)                                 [reserved];

 

(c)                                  [reserved];

 

(d)                                 [reserved];

 

(e)                                  [reserved];

 

(f)                                   [reserved].

 

(g)                                  to the extent New Holdco, directly or indirectly through its ownership of CDH II, owns a majority of the Equity Interests in Parent, Parent may make distributions to New Holdco and/or CDH II, as applicable, to fund any accounting or tax-related expenses and

 

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corporate maintenance expenses (such as filing fees) incurred in the ordinary course of business; provided, that, (x) it is understood and agreed by the Loan Parties that such distributions shall in no event be permitted hereunder or made if such expenses are with respect to tax planning, New Holdco Expenses, sales taxes or income taxes and (y) the aggregate amount of any such expenses shall not exceed $25,000 for the period commencing on the Closing Date through the Maturity Date;

 

(h)                                 Parent may make distributions to fund (i) ordinary course reimbursement of reasonable and customary out of pocket expenses paid to non-insiders and (ii) indemnities provided on behalf of the directors of New Holdco and CDH II in an amount not to exceed $50,000; and

 

(i)                                     any Subsidiary of Parent may pay dividends or other distributions to a Loan Party (including, without limitation, distributions to a Loan Party upon the reduction of capital (by whatsoever name called, including paid in capital, paid up capital or stated capital) of such Subsidiary).

 

6.10                                          Accounting Methods.  Modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP or as permitted under Section 1.2).

 

6.11                                          Investments.  Directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment, except for Permitted Investments.

 

6.12                                          Transactions with Affiliates.  Directly or indirectly, enter into or permit to exist any transaction or agreement with any Affiliate (including without limitation; any transaction to purchase, acquire or lease any property from, or sell, transfer or lease any property to, any officer, director or other Affiliates of Parent or any of its Subsidiaries), except for:

 

(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 Parent or such Subsidiary, provided, that, such transactions are not otherwise prohibited by this Agreement;

 

(b)                                 transactions exclusively between the Loan Parties, provided, that, such transactions are not otherwise prohibited by this Agreement;

 

(c)                                  transactions permitted under Section 6.3, or 6.9 hereof;

 

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(d)                                 any agreement as in effect as of the Closing Date and listed on Schedule 6.12(d), as each such agreement may be amended, modified, supplemented, extended or renewed from time to time with the prior written consent of the Required Lenders;

 

(e)                                  the reimbursement by Parent of Sciens Management LLC and Sciens Institutional Services LLC of reasonable and customary out-of-pocket expenses of Sciens Management LLC and Sciens Institutional Services LLC incurred in the ordinary course of business in connection with the businesses of Parent and its Subsidiaries, solely to the extent required by terms of the Management Agreement and the Consulting Agreement, in an aggregate amount not to exceed $75,000 in the aggregate in any fiscal year of Parent; provided, that, as of the date of any such payment and after giving effect thereto, no Default or Event of Default, in each case, pursuant to Section 8.1, shall exist or have occurred and be continuing provided, further, that for the fiscal year 2015 of Parent, any such payments under this clause shall have been for expenses incurred following the Closing Date and shall not exceed $30,000 in the aggregate.

 

(f)                                   the payment of reasonable and customary (i) fees and reasonable out of pocket expenses paid to non-insider directors and (ii) indemnities provided on behalf of, the directors of Parent or any Subsidiary; provided, that no more than $50,000 of the proceeds of the Term Loans may be used for such indemnities; and

 

(g)                                  transactions with customers, clients, suppliers, joint venture partners (other than joint ventures with Sponsor or any of its Affiliates), or purchasers of, or sellers of goods or services to, a Loan Party, in each case, that are Affiliates of the Loan Parties; provided, that (i) any such transaction is made in the ordinary course of business of the Loan Parties and is in compliance with the terms of this Agreement and (ii) any such transaction is on terms that are no less favorable to Parent or the relevant Subsidiary than those that could have been obtained at the time of such transactions in a comparable transaction by Parent or such Subsidiary with an unrelated person.

 

Notwithstanding anything to the contrary in this Agreement, other than as expressly permitted under Section 6.22, no payments may be made (or deemed to be made) by the Loan Parties to Sponsor or its Affiliates (other than Parent and its Subsidiaries) except in the Loan Parties’ ordinary course of business consistent with past practice.

 

6.13                                          Use of Proceeds.  Except as otherwise provided herein or approved by Required Lenders, use any cash or the proceeds of any Loans in a manner or for a purpose inconsistent with this Agreement, the Orders and the Approved Budget (subject to the Permitted Variances); provided, that no cash or the proceeds of any Loans may be used by the Loan Parties in connection with: (i) the payment of any principal of the Prepetition ABL Loan Debt (other than the Permitted ABL Roll-Up) or Prepetition Term Loan Debt (other than the refinancing of a portion thereof with the proceeds of the Tranche B Term Loan), and (ii) investigating (including discovery proceedings), initiating, asserting, joining, commencing, supporting or prosecuting any claims, causes of action, adversary proceedings or other litigation against the Lenders, the Agent, the Prepetition Term Agent or the Prepetition Term Lenders, and each of their respective officers, directors, employees, agents, attorneys, affiliates, assigns, or successors, with respect to any transaction, occurrence,

 

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omission, action or other matter (including formal discovery proceedings in anticipation thereof), including, without limitation; (1) any claims or causes of action arising under chapter 5 of the Bankruptcy Code or under Canadian Insolvency Law; (2) any so-called “lender liability” claims and causes of action; (3) any action with respect to the validity, enforceability, priority and extent of the Prepetition Term Loan Debt, the Prepetition ABL Loan Debt or the Term Loans; (4) any action seeking to invalidate, set aside, avoid or subordinate, in whole or in part, the Prepetition ABL Loan Debt, the Prepetition Term Loan Debt or the Term Loans; or (5) any action seeking to modify any of the rights, remedies, priorities, privileges, protections and benefits granted to any or all of the Secured Parties hereunder or under the Loan Documents, or for any purpose that is prohibited under the Bankruptcy Code, in each case, other than an aggregate amount not to exceed $10,000 that may be used by, or to reimburse, the fees, costs or expenses of, the Committee in connection with the investigation of the prepetition claims of the holders of the Prepetition Term Loan Debt and the Prepetition ABL Loan Debt; provided, that during the Remedies Notice Period, nothing herein or in the Orders, as applicable, shall limit the ability of the Loan Parties to seek to challenge an Event of Default.

 

6.14                                          Limitation on Issuance of Equity Interests.  Except for the issuances or sales of Equity Interests by a Loan Party to another Loan Party, issue or sell or enter into any agreement or arrangement for the issuance or sale of any of its Equity Interests.

 

6.15                                          [Reserved].

 

6.16                                          Specified Canadian Pension Plans.  (i) Maintain, sponsor, administer, contribute to, participate in or assume or incur any liability in respect of any Specified Canadian Pension Plan, or (ii) acquire an interest in any Person if such Person sponsors, administers, contributes to, participates in or has any liability in respect of, any Specified Canadian Pension Plan, unless the obligation to pay any deficit under any such Specified Canadian Pension Plan would not have priority under applicable law over any Liens created by the Security Documents.

 

6.17                                          Sale Leaseback Transactions.  Create, incur or suffer to exist, or permit any of its Subsidiaries to create, incur or suffer to exist, any obligations as lessee for the payment of rent for any real or personal property in connection with any sale and leaseback transaction.

 

6.18                                          Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries.  Create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of any Loan Party (a) to pay dividends or to make any other distribution on any shares of Equity Interests of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (b) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries, (c) to make loans or advances to any Loan Party or any of its Subsidiaries or (d) to transfer any of its property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing; provided, however, that nothing in any of clauses (a) through (d) of this Section 6.18 shall prohibit or restrict compliance with:

 

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(a)                                 this Agreement and the other Loan Documents;

 

(b)                                 the DIP ABL Credit Agreement, the other DIP ABL Loan Documents, the Prepetition Term Loan Agreement, the other Prepetition Term Loan Documents, the Prepetition ABL Credit Agreement or the other Prepetition ABL Loan Documents;

 

(c)                                  the Senior Note Indenture;

 

(d)                                 any applicable law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances);

 

(e)                                  in the case of clause (d), customary restrictions on the subletting, assignment or transfer of any specified property or asset set forth in a lease, license, asset sale agreement or similar contract for the conveyance of such property or asset; or

 

(f)                                   in the case of clause (d), any agreement, instrument or other document evidencing a Permitted Lien (or the Indebtedness secured thereby) from restricting on customary terms the transfer of any property or assets subject thereto.

 

6.19                                          Limitations on Negative Pledges.  Enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Loan Party or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following:  (a) this Agreement and the other Loan Documents, (b) the DIP ABL Credit Agreement and the other DIP ABL Loan Documents, (c) the Prepetition Term Loan Agreement and the other Prepetition Term Loan Documents, (d) the Prepetition ABL Credit Agreement and the other Prepetition ABL Loan Documents, (e) the Senior Note Indenture and any related security documents, (f) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by Section 6.1 of this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (g) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder and (h) customary provisions in leases restricting the assignment or sublet thereof.  Notwithstanding the foregoing, the limitations set forth in this Section 6.19 shall not be any more restrictive than permitted pursuant to Sections 6.19 of the DIP ABL Credit Agreement.

 

6.20                                          Employee Benefits.

 

(a)                                 Terminate, or permit any ERISA Affiliate to terminate, any Pension Plan in a manner, or take any other action with respect to any Pension Plan, which could reasonably be expected to result in any material liability of any Loan Party or ERISA Affiliate to the PBGC.

 

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(b)                                 Fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Pension Plan, agreement relating thereto or applicable Law, any Loan Party or ERISA Affiliate is required to pay if such failure could reasonably be expected to result in a Material Adverse Change.

 

(c)                                  Permit to occur, or allow any ERISA Affiliate to permit to occur, any failure to satisfy the minimum funding standards under section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan which exceeds $1,000,000 with respect to all Pension Plans in the aggregate.

 

(d)                                 Except as could not reasonably be expected to have a material liability, acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to a Loan Party or with respect to any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Pension or (ii) any Multiemployer Plan.

 

(e)                                  Contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any Multiemployer Plan not set forth on Schedule 4.11.

 

(f)                                   Amend, or permit any ERISA Affiliate to amend, a Pension Plan resulting in a material increase in current liability such that a Loan Party or ERISA Affiliate is required to provide security to such Plan under the IRC.

 

6.21                                          [Reserved].

 

6.22                                          New Holdco Expenses.  After the Closing Date, incur or pay any New Holdco Expenses.  At the request of the Required Lenders from time to time, the Loan Parties shall provide a summary list of New Holdco Expenses incurred by the Loan Parties after February 9, 2015.

 

6.23                                          Cash in Deposit Accounts.  Subject to the satisfaction of the obligations set forth in Section 5.23(a), permit any Cash to be held in any account other than a Deposit Account (or, to the extent permitted under the Security Agreement, the Excluded Accounts (as defined in the Security Agreement)) subject to a Control Agreement in favor of the Agent.

 

6.24                                          [Reserved].

 

6.25                                          Disclosure re Lenders.  At any time during the period from and including the Closing Date to and including the Maturity Date, issue or make any press release or other publication, make any disclosure in any public filing, or disclose to any Person (other than any other Loan Party or their Affiliates) any document, terms or agreement, in each case, relating in any way to this Agreement or any other Loan Document, any amendment, waiver or modification thereof, any Lender, any other actual or potential transaction or agreement (relating to a restructuring of the Loan Parties or otherwise) with any Lender (or

 

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any proposal thereof), or any discussions with respect to any of the foregoing, in each case, except (x) with the prior written consent of Required Lenders or (y) as required by applicable law.

 

6.26                                          Chapter 11 Cases and CCAA Recognition Proceedings.

 

(a)                                 Other than the claims and Liens of the DIP ABL Agent arising from the DIP ABL Credit Agreement and subject to the DIP Intercreditor Agreement, and other than the adequate protection claims of (i) the Prepetition ABL Agent arising from the Prepetition ABL Credit Agreement and (ii) the Prepetition Term Agent arising from the Prepetition Term Loan Agreement, in each case to the extent set forth in the Orders, as applicable, and except for the Carve-Out and in respect of Permitted Prior Liens, incur, create, assume, suffer to exist or permit, or file any motion seeking, any other Superpriority Claim which is pari passu with, or senior to the claims and Liens of, the Agent and Lenders.

 

(b)                                 Make or permit to be made any change to the Orders, as applicable, without the consent of the Required Lenders.

 

(c)                                  Commence any adversary proceeding, contested matter or other action asserting any claims or defenses or otherwise against Agent, any Lender, the Prepetition Term Agent or any Prepetition Term Lender with respect to this Agreement, the other Loan Documents, the transactions contemplated hereby or thereby, the Prepetition Term Loan Agreement, the other documents or agreements executed or delivered in connection therewith or the transactions contemplated thereby; provided, that during the Remedies Notice Period, nothing herein or in the Orders, as applicable, shall limit the ability of the Loan Parties to seek to challenge an Event of Default.

 

(d)                                 Make (i) any prepetition “critical vendor” payments or other payments on account of any creditor’s prepetition unsecured claim, (ii) payments on account of claims or expenses arising under section 503(b)(9) of the Bankruptcy Code or (iii) payments under any management incentive plan or on account of claims or expenses arising under section 503(c) of the Bankruptcy Code, except in amounts and on terms and conditions that (a) are approved by order of the Bankruptcy Court after notice and a hearing and (b) are expressly permitted by the terms of the Loan Documents and within the limits, including any allowed variance, of the Approved Budget or otherwise with the consent of the Required Lenders.

 

(e)                                  File any motion or application with the Bankruptcy Court or the Canadian Court, as applicable, with regard to actions taken outside the ordinary course of business of the Debtors without consulting with the Lenders and providing the Lenders prior (in any case, not less than 2 Business Days’ (or such lesser time as may be acceptable to Required Lenders in their sole discretion)) notice and the opportunity to review and comment on each such motion.

 

7.                                      FINANCIAL COVENANTS.

 

Each Loan Party covenants and agrees that, until payment in full of the Obligations:

 

(a)                                 [Reserved].

 

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(b)                                 [Reserved].

 

(c)                                  [Reserved].

 

(d)                                 Total Expenditures; Total Receipts.  With respect to the Test Period ending on each Test Date, the Loan Parties shall not, and shall cause each other Loan Party to not, (i) make disbursements that would be included in the line-item “WH Total Cash Outflows” (the “Total Operating Disbursement Line”) in the Approved Budget during such Test Period in an aggregate amount which would exceed by more than ten percent (10.0%) the aggregate amount of disbursements budgeted in the Total Operating Disbursements Line in the Approved Budget for such Test Period, but without regard to such expenditures for the payment or reimbursement of Lender Group Expenses (and such similar expenses paid pursuant to the DIP ABL Credit Agreement) (the “Total Operating Disbursement Variance”); provided, that to the extent actual disbursements are less than the budgeted WH Total Cash Outflows during such Test Period, such difference shall be carried forward to succeeding Test Periods until such difference is reduced to zero dollars ($0); (ii) make disbursements that would be included in the line-item “Non Operating Cash Outflows” in the Approved Budget (the “Total Non-Operating Disbursements Line”) during such Test Period in an aggregate amount which would exceed by more than ten percent (10.0%) the aggregate amount of disbursements budgeted in the Total Non-Operating Disbursements Line in the Approved Budget for such Test Period (the “Total Non-Operating Disbursement Variance”); provided, that to the extent actual disbursements are less than the budgeted Non Operating Cash Outflows during such Test Period, such difference shall be carried forward to succeeding Test Periods until such difference is reduced to zero dollars ($0); and (iii) permit receipts that would be included in the line-item “Total Cash Inflows” in the Approved Budget (the “Total Receipts Line”) during such Test Period to be in an aggregate amount less than ninety percent (90.0%) of receipts budgeted in the Total Receipts Line in the Approved Budget for such Test Period (the “Total Receipts Variance” and together with the Total Operating Disbursement Variance and the Total Non-Operating Disbursement Variance, the “Permitted Variances”); provided that (A) to the extent actual receipts are greater than the budgeted Total Cash Inflows during such Test Period, such excess shall be carried forward to succeeding Test Periods until such excess is reduced to zero dollars ($0), and (B) if actual receipts are less than ninety percent (90.0%) of receipts budgeted in the Total Receipts Line for such Test Period solely as a result of a delay in receipt of one or more foreign government receivables(s) backed by a letter-of-credit (which are identified in writing to the Required Lenders) that were projected to be received during such Test Period in the Approved Budget, so long as such receivable(s) are received not more than five (5) calendar days after the end of such Test Period, such receivable(s) shall be treated as having being received during such Test Period (and not the Test Period when actually received).

 

(e)                                  Capital Expenditures.  Make or commit to make Capital Expenditures during the term of this Agreement in an aggregate amount in excess of $1,000,000.

 

8.                                      EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

 

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8.1                                                 If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations, and such failure continues for a period of 1 Business Day, or (b) all or any portion of the principal of the Obligations;

 

8.2                                                 If any Loan Party or any of its Subsidiaries:

 

(a)                                 fails to perform or observe any covenant or other agreement contained in any of (i) Sections 5.1, 5.2, 5.3 (solely if any Borrower or any other Loan Party is not in good standing in its jurisdiction of organization), 5.7 , 5.10, 5.16, 5.18, 5.20 or 5.21 (solely if any Borrower or other Loan Party refuses to allow Agent, the Required Lenders or their respective representatives or agents to visit such Loan Party’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss such Loan Party’s affairs, finances, and accounts with officers and employees of such Borrower), 5.6, 5.13, or 5.16 of this Agreement; (ii) Articles VI or VII of this Agreement; or (iii) Section 6 of the Security Agreement or Canadian Security Agreement;

 

(b)                                 fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to a Responsible Officer of any Loan Party or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

 

(c)                                  fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to a Responsible Officer of any Loan Party or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

 

8.3                                                 If one or more post-Petition Date judgments, orders, or awards for the payment of money involving an aggregate amount of $500,000, or more (except to the extent fully covered by cash escrowed to satisfy such judgment, order or award or (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

 

8.4                                                 [Reserved];

 

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8.5                                                 [Reserved];

 

8.6                                                 If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Parent and its Subsidiaries, taken as a whole;

 

8.7                                                 If there is (a) a default in respect of the DIP ABL Credit Agreement or one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ post-Petition Date Indebtedness involving an aggregate amount of $1,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, (b) a default in respect of one or more Material Contracts or (c) a default in respect of or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate amount of $1,000,000 or more;

 

8.8                                                 If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

 

8.9                                                 If (i) the obligation of any Guarantor under the applicable Guaranty ceases to be in full force and effect or (ii) the Obligations cease to be Superpriority Claims;

 

8.10                                          (a) If the Security Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected Liens on Collateral with the priority set forth in the Orders, except as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement;

 

(b)                                 The validity or enforceability of any Loan Document or the Obligations shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, or a Committee, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document.

 

8.11                                          (a) The occurrence of any damage to, or loss, theft or destruction of, any Collateral having an aggregate book value in excess of $175,000 (exclusive of any damage to Collateral covered by insurance pursuant to which the insurer has not denied coverage) if (i) the proceeds of such insurance are not received by the Loan Parties within 10 days of such occurrence and (ii) such Collateral is not repaired and/or replaced within 10 days of such occurrence or (b) any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than 15 consecutive days,

 

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the cessation or substantial curtailment of material revenue producing activities of the Loan Parties, taken as a whole;

 

8.12                                          The loss, suspension or revocation of, or failure to renew, any material license or permit now held or hereafter acquired by any Loan Parties;

 

8.13                                          (a) The indictment (or an indictment threatened in writing) of any Loan Party (or any executive officer thereof acting in such capacity as an executive officer and not in his or her personal capacity) under any criminal statute, or (b) commencement of, or commencement threatened in writing of, criminal or civil proceedings against any Loan Party (or any executive officer thereof acting in such capacity as an executive officer and not in his or her personal capacity), solely to the extent that pursuant to such indictment, statute or proceedings, the penalties or remedies sought or available in connection therewith include forfeiture to any Governmental Authority of any material portion of the property of the Loan Parties, taken as a whole;

 

8.14                                          The validity or enforceability of any Loan Document or the Obligations shall at any time for any reason  (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries or a Committee, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

 

8.15                                          If any Loan Party ceases to have the right to use, or the Loan Parties are not in possession and control of, a material amount of the Specified Government Property;

 

8.16                                          (a) The occurrence of an event or condition which could 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, which could reasonably be expected to result in liability in excess of $500,000; (b) the imposition of any liability in excess of $500,000 under Title I or Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any of its ERISA Affiliates, (c) the occurrence of a nonexempt prohibited transaction under Section 406 or 407 of ERISA for which any Loan Party may be directly or indirectly liable and which is reasonably expected to result in a liability to any Loan Party in excess of $500,000, (d) receipt from the Internal Revenue Service of notice of the failure of any Employee Benefit Plan to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Employee Plan to fail to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code or (e) the imposition of any lien on any of the rights, properties or assets of any Loan Party or any of its ERISA Affiliates, in either case pursuant to Title IV of ERISA, and which lien secures a liability in excess of $500,000; provided that any of the foregoing (other than with respect to clauses (a) and (c)) that occurs in connection with a Bargaining Unit Defined Benefit Plan Calculation Error Event shall not constitute a Default or Event of Default hereunder or under any of the other Loan Documents

 

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8.17                                          An event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries;

 

8.18                                          A Dutch Loan Party gives notice under Section 36(2) of the 1990 Tax Collection Act (Invorderingswet 1990);

 

8.19                                          A Change of Control shall occur;

 

8.20                                          [Reserved].

 

8.21                                          [Reserved].

 

8.22                                          There shall have occurred any of the following in the Chapter 11 Cases or the CCAA Recognition Proceedings:

 

(a)                                 the bringing of a motion or application or taking of any action in each case by any Loan Party in the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, or the entry of any order by the Bankruptcy Court in the Chapter 11 Cases or the Canadian Court in the CCAA Recognition Proceedings, as applicable: (i) to obtain additional financing under section 364(c) or (d) of the Bankruptcy Code not otherwise permitted pursuant to this Agreement or that does not provide for the repayment of all Obligations under this Agreement in full in cash; (ii) to grant any Lien or charge other than Liens or charges expressly permitted under this Agreement upon or affecting any Collateral; (iii) except as provided in this Agreement or the Orders, as the case may be, to use cash collateral of the Agent under section 363(c) of the Bankruptcy Code without the prior written consent of the Agent and the Lenders; or (iv) that (in the case of any Loan Party) requests or seeks authority for or that (in the case of an order entered by the Bankruptcy Court on account of a request by any Loan Party) approves or provides authority to take any other action or actions adverse to the rights and remedies of the Agent and the Lenders hereunder or their interest in the Collateral;

 

(b)                                 the filing of any plan of reorganization or disclosure statement attendant thereto, or any direct or indirect amendment to such plan or disclosure statement, by any Loan Party which does not provide for either (x) the repayment of all Obligations under this Agreement in full in cash on the “Effective Date” of such plan or (y) such other treatment of the Obligations in a manner acceptable to the Required Lenders;

 

(c)                                  the entry of an order in any of the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, confirming a plan or plans of reorganization that does not (i)(a) contain a provision for repayment in full in cash of all of the Obligations under this Agreement on or before the effective date of such plan or plans and (b) provide for the continuation of the Liens and security interests granted to the Agent for the benefit of the Lenders and priority until the Obligations have been paid in full or (ii) provide for such other treatment of the Obligations in a manner acceptable to the Required Lenders;

 

(d)                                 the entry of an order in the Chapter 11 Cases or the CCAA Recognition Proceedings amending, supplementing, staying, vacating or otherwise modifying any Loan

 

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Document or the Orders, as applicable, in any case without the prior written consent of the Required Lenders;

 

(e)                                  the Final DIP Order is not entered within twenty-five (25) days (or such other period as the Lenders may agree to in writing) following the date of the Interim Hearing or the Final DIP Order does not permit the Borrowers to incur the Tranche B Term Loan;

 

(f)                                   the Final DIP Recognition Order is not granted by the Canadian Court on or prior to the date that is five (5) days (or such later date as the Required Lenders may agree to in writing) after the date of entry of the Final DIP Order;

 

(g)                                  the payment of, or application by any Loan Party for authority to pay, any prepetition claim without the Lenders’ prior written consent other than (i) as provided in any “first day order” in form and substance reasonably acceptable to the Lenders or on account of the Permitted ABL Roll-Up, (ii) as set forth in the Approved Budget (subject to the Permitted Variances) or (iii) unless otherwise expressly permitted under this Agreement;

 

(h)                                 the entry of an order by the Bankruptcy Court or the Canadian Court appointing, or the filing of an application by any Loan Party, for an order seeking the appointment of, in either case without the consent of the Lenders, an interim or permanent trustee in the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, or the appointment of a receiver or an examiner under section 1104 of the Bankruptcy Code or under Canadian Insolvency Law in the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, with expanded powers (beyond those set forth in sections 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code) to operate or manage the financial affairs, the business, or reorganization of the Borrower or with the power to conduct an investigation of (or compel discovery from) the Agent or the Lenders or against the Prepetition ABL Agent or Prepetition ABL Lenders under the Prepetition ABL Loan Documents, the Prepetition Term Agent or Prepetition Term Lenders under the Prepetition Term Loan Documents, or the DIP ABL Agent or DIP ABL Lenders under the DIP ABL Loan Documents; or the sale without the Agent’s and the Lenders’ consent, of all or substantially all of any Borrower’s assets either through a sale under section 363 of the Bankruptcy Code, through a confirmed plan of reorganization in the Chapter 11 Cases or in the CCAA Recognition Proceedings, as applicable, or otherwise that does not provide for payment in full in cash of the Obligations;

 

(i)                                     the dismissal of the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, which does not contain a provision for payment in full in cash of all noncontingent monetary Obligations of the Borrowers hereunder, or if any Loan Party shall file a motion or other pleading seeking the dismissal of the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, which does not contain a provision for payment in full in cash of all noncontingent monetary Obligations of the Borrowers hereunder;

 

(j)                                    the conversion of the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, from one under chapter 11 to one under chapter 7 of the Bankruptcy Code or to a transition to a bankruptcy or receivership under applicable Canadian Insolvency Law, or any Loan Party shall file a motion or other pleading seeking the conversion of the

 

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Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, under section 1112 of the Bankruptcy Code or otherwise;

 

(k)                                 the entry of an order by the Bankruptcy Court or the Canadian Court, as applicable, granting relief from or modifying the automatic stay of section 362 of the Bankruptcy Code or the stay granted in the CCAA Recognition Proceedings, as applicable, (x) to allow any creditor to execute upon or enforce a Lien on any Collateral, or (y) with respect to any Lien of or the granting of any Lien on any Collateral to any state, provincial or local environmental or regulatory agency or authority having priority over the Lien in favor of the Agent and the Prepetition Term Agent;

 

(l)                                     the entry of an order in the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, avoiding or requiring repayment of any portion of the payments made on account of the Obligations owing under this Agreement or the other Loan Documents;

 

(m)                             the failure of any Loan Party to perform any of its obligations under the First Interim DIP Order, the Second Interim DIP Order or the Final DIP Order or any of the Canadian Orders or any violation of any of the terms of the First Interim DIP Order, the Second Interim DIP Order or the Final DIP Order or any Canadian Orders, subject to any applicable grace or cure periods;

 

(n)                                 the challenge by any Loan Party to the validity, extent, perfection or priority of any obligations or liens granted under the Prepetition Term Loan Documents, the Prepetition ABL Loan Documents or the DIP ABL Loan Documents;

 

(o)                                 the remittance, use or application of cash collateral of the Loan Parties other than in accordance with any cash management procedures and agreements approved by the Bankruptcy Court and the Orders;

 

(p)                                 the entry of an order in any of the Chapter 11 Cases or the CCAA Recognition Proceedings, as applicable, granting any other super priority administrative claim, Lien or charge equal or superior to that granted to the Agent, on behalf of itself and the Lenders without the consent in writing of the Required Lenders, or as otherwise expressly permitted in this Agreement;

 

(q)                                 the filing of a motion by any Loan Party requesting, or the entry of any order granting, any super-priority claim which is senior or pari passu with the Lenders’ claims or with the claims of the Prepetition ABL Lenders under the Prepetition ABL Loan Documents, the Prepetition Term Lenders under the Prepetition Term Loan Documents, or the DIP ABL Lenders under the DIP ABL Loan Documents, except (i) in connection with the Permitted Prior Liens, (ii) in respect of the Carve-Out, (iii) under the Adequate Protection Provisions, (iv) to the extent the claim relates to new financing that provides for the repayment of all Obligations under this Agreement irrevocably in full in cash on the closing of such new financing, or (v) as provided in the DIP Intercreditor Agreement;

 

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(r)                                    the entry of an order precluding the Agent or the Prepetition Term Agent from having the right to or being permitted to “credit bid” with respect to the assets of the Loan Parties;

 

(s)                                   any attempt by any Loan Party to reduce (other than a reduction in accordance with the terms of this Agreement) avoid, set off or subordinate the Obligations or the Liens securing such Obligations to any other debt;

 

(t)                                    the reversal, vacation or stay of the effectiveness of any of the First Interim DIP Order, the Second Interim DIP Order, the Final DIP Order, Initial Recognition Order or Final DIP Recognition Order or any provision thereof without the consent of the Required Lenders;

 

(u)                                 the payment of or granting adequate protection (except pursuant to the Adequate Protection Provisions) with respect to any Prepetition Term Loan Debt and Prepetition ABL Loan Debt (other than the Permitted ABL Roll-Up or with respect to payment permitted under any “first day order” in form and substance satisfactory to the Lenders or as set forth in the First Interim DIP Order, Second Interim DIP Order or the Final DIP Order or any of the Canadian Orders);

 

(v)                                 an application for any of the orders described in this Section 8.22 including, without limitation, clauses (a), (c), (d), (h), (i), (j), (k) or (o) shall be made by a Person other than the Agent or the Lenders and such application is not, to the extent requested by the Required Lenders, contested by any Loan Party in good faith and the relief requested is granted in an order that is not stayed pending appeal;

 

(w)                               the cessation of Liens or super-priority claims granted with respect to this Agreement to be valid, perfected and enforceable in all respects;

 

(x)                                 the entry of any order of the Canadian Court that is not in recognition of an existing order of the Bankruptcy Court that is in form and substance reasonably acceptable to the Lenders, without the consent of the Lenders;

 

(y)                                 the Bankruptcy Court or the Canadian Court, as applicable, shall cease to have exclusive jurisdiction with respect to all matters relating to the exercise of rights and remedies under the Loan Documents, the Orders, the DIP Liens and the Collateral;

 

(z)                                  the CCAA Recognition Proceedings are dismissed or converted to full plenary proceedings under the CCAA or any Loan Party shall file an application, motion or other pleading or shall consent to an application, motion or other pleading filed by any person seeking any of the foregoing with consent of the Lenders thereof; or

 

(aa)                          the filing of any application, motion, pleading or report in the CCAA Recognition Proceeding by the Foreign Representative that is not in form and substance acceptable to the Lenders other than with respect to the report of an independent information officer, if appointed, and provided to the Lenders at least two (2) Business Days prior to the filing.

 

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9.                                      RIGHTS AND REMEDIES.

 

9.1                                                 Rights and Remedies.  Upon the occurrence and during the continuation of an Event of Default, Agent, upon the written instruction of the Required Lenders, shall (in each case under clause (a) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

 

(a)                                 subject to the Remedies Notice Period, declare the Obligations, whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower;

 

(b)                                 deliver written notice to the Bankruptcy Court or the Canadian Court, as applicable, that, pursuant to the Orders, as applicable, the automatic stay provisions of section 362 of the Bankruptcy Code or any stay operating under Canadian Insolvency Law have been vacated and modified to the extent necessary to permit the Agent and the Lenders to exercise all rights and remedies provided for in the Loan Documents upon the expiration of the Remedies Notice Period; and

 

(c)                                  subject to the Remedies Notice Period, exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents (including without limitation, Section 9.3 hereof), the Orders or applicable law, subject to the Orders, as applicable.

 

The Loan Parties shall cooperate fully with the Agent and the Lenders in their exercise of rights and remedies, whether against the Collateral or otherwise.

 

9.2                                                 Remedies Cumulative.  The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, the PPSA, by law, or in equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

9.3                                                 Code and Other Remedies.

 

(a)                                 Code Remedies. During the continuance of an Event of Default, subject to the Remedies Notice Period, the Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement (including, without limitation, Section 9.1) and in any other instrument or agreement securing, evidencing or relating to any Obligation, all rights and remedies of a secured party under the Code or any other applicable law.

 

(b)                                 Disposition of Collateral. Without limiting the generality of the foregoing, the Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by the First Interim DIP Order,

 

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the Second Interim DIP Order or the Final DIP Order or any of the Canadian Orders and any notice required by law referred to below, including compliance with the Remedies Notice Period) to or upon any Loan Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived (except as required by the First Interim DIP Order, the Second Interim DIP Order or the Final DIP Order or any of the Canadian Orders)), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self- help, without judicial process, without first obtaining a final judgment or giving any Loan Party or any other Person notice or opportunity for a hearing on the Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral, (iii) Sell, grant option or options to purchase and deliver any Collateral (enter into contractual obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk, (iv) withdraw all cash and Cash Equivalents in any Deposit Account or Securities Account of a Loan Party and apply such cash and Cash Equivalents and other cash, if any, then held by it as Collateral in satisfaction of the Obligations, and (v) give notice and take sole possession and control of all amounts on deposit in or credited to any Deposit Account or Securities Account pursuant to the related Control Agreement.  The Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the Code and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold (and, in lieu of actual payment of the purchase price, may “credit bid” or otherwise set off the amount of such price against the Obligations), free of any right or equity of redemption of any Loan Party, which right or equity is hereby waived and released.

 

(c)                                  Management of the Collateral. Each Loan Party further agrees, that, during the continuance of any Event of Default, subject to the Remedies Notice Period, (i) at the Agent’s request, it shall assemble the Collateral and make it available to the Agent at places that the Agent shall reasonably select, whether at such Loan Party’s premises or elsewhere, (ii) without limiting the foregoing, the Agent also has the right to require that each Loan Party store and keep any Collateral pending further action by the Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Agent is able to Sell any Collateral, the Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Agent and (iv) the Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Agent’s remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Agent shall not have any obligation to any Loan Party to maintain or preserve the rights of any Loan Party as against third parties with respect to any Collateral while such Collateral is in the possession of the Agent.

 

(d)                                 Direct Obligation. Neither the Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Loan Party, any other Loan Party or any other Person with respect to the payment of the Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or

 

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indirect guaranty thereof. All of the rights and remedies of the Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Loan Party absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Agent or any Lender, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

 

(e)                                  Commercially Reasonable. To the extent that applicable Requirements of Law impose duties on the Agent to exercise remedies in a commercially reasonable manner, each Loan Party acknowledges and agrees that it is not commercially unreasonable for the Agent to do any of the following:

 

(i)                               fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;

 

(ii)                            fail to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;

 

(iii)                         fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;

 

(iv)                        advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Loan Party, for expressions of interest in acquiring any such Collateral;

 

(v)                           exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;

 

(vi)                        dispose of assets in wholesale rather than retail markets;

 

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(vii)                     disclaim disposition warranties, such as title, possession or quiet enjoyment; or

 

(viii)                  purchase insurance or credit enhancements to insure the Agent against risks of loss, collection or disposition of any Collateral or to provide to the Agent a guaranteed return from the collection or disposition of any Collateral.

 

(f)                                   Each Loan Party acknowledges that the purpose of this Section 9.3 is to provide a non- exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 9.3. Without limitation upon the foregoing, nothing contained in this Section 9.3 shall be construed to grant any rights to any Loan Party or to impose any duties on the Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 9.3.The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, the PPSA, by law, or in equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

9.4                                                 Accounts and Payments in Respect of General Intangibles.

 

(a)                                 In addition to, and not in substitution for, any other provision in this Agreement, if required by the Agent at any time during the continuance of an Event of Default, subject to the Remedies Notice Period, on and after the date on which at least one Deposit Account or Securities Account has been established, any payment of accounts or payment in respect of general intangibles, when collected by any Loan Party, shall be promptly (and, in any event, within 2 Business Days) deposited by such Loan Party in the exact form received, duly indorsed by such Loan Party to the Agent, in such account, subject to withdrawal by the Agent as provided in Section 9.5. Until so turned over, such payment shall be held by such Loan Party in trust for the Agent, segregated from other funds of such Loan Party. Each such deposit of proceeds of accounts and payments in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(b)                                 At any time during the continuance of an Event of Default, subject to the Remedies Notice Period:

 

(i)                               each Loan Party shall, upon the Agent’s request, deliver to the Agent all original and other documents evidencing, and relating to, the contractual obligations and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invokes and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to the Agent and that payments in respect thereof shall be made directly to the Agent;

 

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(ii)                            the Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Loan Party to collect its accounts or amounts due under general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Agent’s reasonable satisfaction the existence, amount and terms of any account or amounts due under any general intangible. In addition, the Agent may at any lime enforce such Loan Party’s rights against such account debtors and obligors of general intangibles; and

 

(iii)                         each Loan Party shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Agent to ensure any Internet domain name is registered.

 

(c)                                  Anything herein to the contrary notwithstanding, each Loan Party shall remain liable under each account and each payment in respect of general intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Loan Party under or pursuant to any agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.

 

9.5                                                 Proceeds to be Turned over to and Held by Agent.  Unless otherwise expressly provided in this Agreement, upon the occurrence and during the continuance of an Event of Default, subject to the Remedies Notice Period, all proceeds of any Collateral received by any Loan Party hereunder in cash or Cash Equivalents shall be held by such Loan Party in trust for the Agent and the other Secured Parties, segregated from other funds of such Loan Party, and shall, promptly upon receipt by any Loan Party, be turned over to the Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by the Agent in cash or Cash Equivalents shall be held by the Agent in a Deposit Account or Securities Account. All proceeds being held by the Agent in a Deposit Account or Securities Account (or by such Loan Party in trust for the Agent) shall continue to be held as collateral security for the Obligations and shall not constitute payment thereof until applied as provided in this Agreement.

 

9.6                                                 Registration Rights.

 

(a)                                 Each Loan Party recognizes that the Agent may be unable to effect a public sale of any pledged Collateral by reason of certain prohibitions contained in the Securities Act, and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort

 

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to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Loan Party acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Agent shall be under no obligation to delay a sale of any pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act, or under applicable state or foreign securities laws even if such issuer would agree to do so.

 

(b)                                 Upon the occurrence and during the continuance of an Event of Default, each Loan Party agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the pledged Collateral pursuant to this Section 9.6, valid and binding and in compliance with all applicable Requirements of Law provided that no Loan Party shall have any obligation to publicly register any securities. Each Loan Party further agrees that a breach of any covenant contained in this Section 9.6 will cause irreparable injury to the Agent and other Secured Parties, that the Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 9.6 shall be specifically enforceable against such Loan Party, and such Loan Party hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under this Agreement.

 

9.7                                                 Deficiency.  Each Loan Party shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorney employed by the Agent or any other Secured Party to collect such deficiency.

 

10.                               WAIVERS; INDEMNIFICATION.

 

10.1                                          Demand; Protest; etc.  Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which such Borrower may in any way be liable.

 

10.2                                          The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees that:  (a) so long as Agent complies with its obligations, if any, under the Code and the PPSA, the Lender Group shall not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers, other than any such loss or damage resulting from the gross negligence, willful misconduct or bad faith of the Agent or any member of the Lender Group, as finally determined by a court of competent jurisdiction.

 

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10.3                                          Indemnification.  Borrowers shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys (limited to one U.S. counsel to Agent-Related Persons and one U.S. counsel to Lender-Related Persons, one Canadian counsel to Agent-Related Persons and one Canadian counsel to Lender-Related Persons, one Dutch counsel to Agent-Related Persons and one Dutch counsel to Lender-Related Persons and any local or regulatory counsel to Agent-Related Persons and Lender-Related Persons reasonably selected by Agent, one additional counsel for the Lenders (taken as a whole) if an Event of Default has occurred and is continuing and, if the interests of any Agent-Related Person or Lender-Related Person are distinctly and disproportionately affected, one additional counsel for such affected Person), experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (promptly upon demand of Agent but in any event not later than 5 days of demand therefor by Agent irrespective of (1) the provisions of Section 17.10 hereof and (2) whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Parent’s and its Subsidiaries’ compliance with the terms of the Loan Documents (provided, however, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders or (ii) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent (in its capacity as such) on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any Environmental Liabilities, Environmental Action or Remedial Action, including any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by Parent or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”); provided, that, no Borrower shall be obligated to indemnify any Indemnified Person under this Section 10.3 for any Taxes (except Taxes that represent claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, disbursements, etc., arising solely from any non-Tax claim), which shall be governed solely by Section 16.  The foregoing to the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence, willful misconduct or bad faith of such Indemnified Person or its officers, directors, employees, attorneys, or agents.  This provision shall survive the termination of this Agreement and the repayment of the Obligations.  If any Indemnified Person makes any payment to any other

 

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Indemnified Person with respect to an Indemnified Liability as to which any Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto.  To the fullest extent permitted by Requirements of Law, the Loan Parties shall not assert, and hereby waive, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

 

11.                               NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile.  In the case of notices or demands to Loan Parties or Agent, as the case may be, they shall be sent to the respective address set forth below:

 

If to Loan Parties:

Colt Defense LLC

 

547 New Park Avenue

 

West Hartford, CT 06110

 

Attn: John Coghlin

 

Fax No. (860) 244-1442

 

Phone: (860) 232-4489

 

Email: jcoghlin@colt.com

 

 

with copies to:

O’Melveny & Myers LLP

 

7 Times Square

 

New York, New York 10036

 

Attn: Sung Pak, Esq.

 

Fax No.: (212) 326-2061

 

 

If to Agent:

Wilmington Savings Fund Society, FSB

 

500 Delaware Avenue, 11th Floor

 

Wilmington, Delaware 19801

 

Attn: Kristin Moore

 

Fax No.: (302) 421-9137

 

Phone: (302) 573-3239

 

Email: kmoore@wsfsbank.com

 

 

with copies to:

Pryor Cashman LLP

 

7 Times Square

 

New York, New York 10036

 

Attn: Eric M. Hellige, Esq.

 

Fax No.: (212) 798-6380

 

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Phone: (212) 326-0846

 

Email: ehellige@pryorcashman.com

 

 

If to a Lender:

to the address of such Lender specified on Schedule C-1

 

 

with copies to:

Willkie Farr & Gallagher LLP

 

787 Seventh Avenue

 

New York, New York 10019

 

Attn: Leonard Klingbaum, Esq.

 

Fax No. (212) 728-9290

 

Phone: (212) 728-8290

 

Email: lklingbaum@willkie.com

 

Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party.  All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

 

12.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)                                 THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND AS MAY BE APPLICABLE THE BANKRUPTCY CODE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES

 

(b)                                 THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE OF NEW YORK AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT

 

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AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH LOAN PARTY AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b) BANKRUPTCY COURT.

 

(c)                                  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH LOAN PARTY AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH LOAN PARTY AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(d)                                 SUBJECT TO THE LAST SENTENCE OF THIS SECTION (D) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, OF ANY NEW YORK STATE COURT OR FEDERAL COURT LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(e)                                  NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 12, (I) THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY ACTION OR DISPUTE INVOLVING, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS AND (II) THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY ACTION OR DISPUTE INVOLVING, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS; PROVIDED, THAT

 

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NOTHING IN THIS SECTION 12 SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY OR ANY COLLATERAL IN ANY OTHER JURISDICTION.

 

13.                               ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1                                          Assignments and Participations.

 

(a)                                 Any Lender may at any time assign to one or more other Lenders or other entities (each, an “Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of the Obligations at the time owing to it), provided, that, any such assignment shall be subject to the following conditions:

 

(i)                               The aggregate amount of the principal outstanding balance of the Obligations of the assigning Lender subject to such assignment shall be not less than $1,000,000, unless the Required Lenders otherwise consent, except that such minimum amount shall not apply to (A) an assignment or delegation by any Lender to any other Lender, an Affiliate of any Lender or a Related Fund or (B) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $1,000,000 or (C) in the case of an assignment of the entire remaining amount of the assigning Lender’s Obligations at the time owing to it;

 

(ii)                            Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

 

(iii)                         The consent of the Agent shall be required for any assignment, other than any assignment to a Lender, an Affiliate of a Lender or a Related Fund;

 

(iv)                        The consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) a Default or Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or a Related Fund; provided, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within ten (10) Business Days after having received notice thereof;

 

(v)                           The parties to each assignment shall execute and deliver to the Agent an Assignment and Acceptance (substantially in the form of Exhibit A-1), together with a processing fee of $3,500, provided, that Agent may, in its discretion, elect to reduce or waive such processing fee in the case of any assignment (and shall waive such fee if the assignment is from a Lender to an

 

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Affiliate of a Lender), and the assignee, if it is not a Lender, shall deliver to the Agent an administrative questionnaire in a form satisfactory to Agent;

 

(vi)                        No such assignment shall be made to (A) a Loan Party or an Affiliate of any Loan Party, (B) any Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or one of its Subsidiaries, (C) a natural Person or (D) any Disqualified Lender;

 

(vii)                     Borrowers and Agent may continue to deal solely and directly with a Lender in connection with the interest so assigned to an Assignee until (A) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee, (B) such Lender and its Assignee have delivered to Administrative Borrower and Agent an Assignment and Acceptance and Agent has notified the assigning Lender of its receipt thereof in accordance with this Section 13.1(a) and the satisfaction of the other conditions herein.

 

(b)                                 From and after the date that Agent has recorded the assignment in the Register and Agent notifies the assigning Lender (with a copy to Administrative Borrower) that it has received an executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

 

(c)                                  By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the 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, such 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 the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and

 

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decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender 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 this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to 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 all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

(d)                                 Immediately upon Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee.

 

(e)                                  Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, and (v) all amounts payable (other than with respect to Section 16) by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement.  The rights of any Participant only shall be derivative

 

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through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Loan Parties, the Collections of Loan Parties, the Collateral, or otherwise in respect of the Obligations.  For the avoidance of doubt, a Participant shall be entitled to the benefits of Section 16 (subject to the requirements and limitations therein, including the requirements under Section 16.2 and the provisions of Section 14.2) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 13.1.  No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

 

(f)                                   In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to Parent and its Subsidiaries and their respective businesses.

 

(g)                                  Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

 

(h)                                 Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause to be maintained, a register (the “Register”) on which it enters the name and address of each Lender as the registered owner of the Term Loans (and the principal amount thereof and stated interest thereon) held by such Lender (each, a “Registered Loan”).  A Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).  Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrowers shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary.

 

(i)                                     In the event that a Lender sells participations in the Registered Loan, such Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the “Participant Register”).  A Registered Loan (and

 

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the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide).  Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register.

 

(j)                                    Agent shall make a copy of the Register (and each Lender shall make a copy of its Participant Register in the extent it has one) available for review by Borrowers from time to time as Borrowers may reasonably request.

 

(k)                                 In order to comply with the Dutch Financial Supervision Act (Wet op het financieel toezicht), the amount transferred under this Section 13.1 shall include an outstanding portion of at least EUR 100,000 (or its equivalent in other currencies) per Lender or such other amount as may be required from time to time by the Dutch Financial Supervision Act (or implementing legislation) or if less, the new Lender shall confirm in writing to Borrower that it is a professional market party within the meaning of the Dutch Financial Supervision Act.

 

13.2                                          Successors.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and notice thereof to Agent and any prohibited assignment shall be absolutely void ab initio.  No consent to assignment by the Lenders shall release any Borrower from its Obligations.  A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and no consent or approval by any Borrower is required in connection with any such assignment.

 

14.                               AMENDMENTS; WAIVERS.

 

14.1                                          Amendments and Waivers.

 

(a)                                 No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

 

(i)                               increase the amount of or extend the expiration date of any Commitment of any Lender,

 

(ii)                            postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

 

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(iii)                         reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except (y) in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders), and (z) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),

 

(iv)                        amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

 

(v)                           amend, modify, or eliminate Section 15.11,

 

(vi)                        release Agent’s Lien in and to any of the Collateral, except as permitted by Section 15.11,

 

(vii)                     amend, modify, or eliminate the definition of “Required Lenders” or “Pro Rata Share,”

 

(viii)                  contractually subordinate any of Agent’s Liens, except as permitted by Section 15.11,

 

(ix)                        release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents, except in connection with a merger, wind up, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents,

 

(x)                           amend, modify, or eliminate any of the provisions of Section 2.4(b)(i) or (ii) or Section 2.4(f),

 

(xi)                        amend, modify, or eliminate the definition of Term Loan Amount, or

 

(xii)                     amend, modify, or eliminate any of the provisions of Section 13.1(a) to permit a Loan Party or an Affiliate of a Loan Party to be permitted to become an Assignee.

 

(b)                                 No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive (i) any of the terms or provisions of Section 2.10, without the written consent of the Required Lenders and Borrowers, and (ii) any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers and the Required Lenders.  Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the consent

 

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of Loan Parties and Lenders shall not be required for the exercise by Agent of any of its rights under this Agreement in accordance with the terms of this Agreement.

 

(c)                                  Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of any Loan Party, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by Section 14.1(a)(ii) and (iii).

 

14.2                                          Replacement of Certain Lenders.

 

(a)                                 If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 16 and such Lender has declined to designate a different lending office, then Borrowers or Agent, upon at least 5 Business Days’ prior irrevocable notice, may permanently replace any Lender that failed to give its consent, authorization, or agreement (a “Holdout Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Holdout Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder.  Such notice to replace the Holdout Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

 

(b)                                 Prior to the effective date of such replacement, the Holdout Lender or Tax Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender or Tax Lender, as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including all interest, fees and other amounts that may be due in payable in respect thereof and its existing rights to payment pursuant to Section 16).  If the Holdout Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Holdout Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Holdout Lender or Tax Lender, as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Holdout Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section 13.1.  Until such time as one or more Replacement Lenders shall have acquired all of the Obligations and the other rights and obligations of the Holdout Lender or Tax Lender, as applicable, hereunder and under the other Loan Documents, the Holdout Lender or Tax Lender, as applicable, shall remain obligated to make the Holdout Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Term Loan.

 

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(c)                                  No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by each Loan Party of any provision of this Agreement.  Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

 

15.                               AGENT; THE LENDER GROUP.

 

15.1                                          Appointment and Authorization of Agent.  Each Lender hereby designates and appoints Wilmington Savings Fund Society, FSB as its agent under this Agreement, the other Loan Documents and the DIP Intercreditor Agreement and each Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan Documents and the DIP Intercreditor Agreement on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and the DIP Intercreditor Agreement and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document and the DIP Intercreditor Agreement, together with such powers as are reasonably incidental thereto.  Agent agrees to act as agent for and on behalf of the Lenders on the conditions contained in this Section 15.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document or the DIP Intercreditor Agreement notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents or the DIP Intercreditor Agreement, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or the DIP Intercreditor Agreement or otherwise exist against Agent.  Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents or the DIP Intercreditor Agreement with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties.  Each Lender hereby further authorizes Agent to act as the secured party under each of the Loan Documents or the DIP Intercreditor Agreement that create a Lien on any item of Collateral.  Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents or the DIP Intercreditor Agreement.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents or the DIP Intercreditor Agreement that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral,

 

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the Collections of Parent and its Subsidiaries, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents or the DIP Intercreditor Agreement, (c) exclusively receive, apply, and distribute the Collections of Parent and its Subsidiaries as provided in the Loan Documents or the DIP Intercreditor Agreement, (d) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral and the Collections of Parent and its Subsidiaries, (e) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Parent or its Subsidiaries, the Obligations, the Collateral, the Collections of Parent and its Subsidiaries, or otherwise related to any of same as provided in the Loan Documents or the DIP Intercreditor Agreement, and (f) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents or the DIP Intercreditor Agreement.

 

15.2                                          Delegation of Duties.  Agent may execute any of its duties under this Agreement or any other Loan Document or the DIP Intercreditor Agreement by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.

 

15.3                                          Liability of Agent.  None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the DIP Intercreditor Agreement or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by Parent or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document or the DIP Intercreditor Agreement, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document or the DIP Intercreditor Agreement, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Parent or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lenders to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of Parent or its Subsidiaries. Notwithstanding the terms and provisions of the DIP Intercreditor Agreement or any reference to the DIP Intercreditor Agreement or the DIP ABL Loan Documents herein, none of the Agent-Related Persons shall be liable for any action taken or omitted to be taken by any of them under the DIP Intercreditor Agreement or under this Agreement relating to the DIP Intercreditor Agreement or the DIP ABL Loan Documents unless directed in writing by the Required Lenders to take or to omit to take any such action,

 

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which direction shall, in the case of a payment required to be made to the DIP ABL Agent, specify the amount of such payment.

 

15.4                                          Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and other experts selected by Agent.  Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable.  If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take or refraining from taking any such action.  Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

 

15.5                                          Notice of Default or Event of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.”  Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge.  If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default.  Each Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, however, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

 

15.6                                          Credit Decision.  Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Parent and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender.  Each Lender represents to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of, and investigation into, the business, prospects, operations, property, financial and other

 

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condition and creditworthiness of Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of any Borrower or any other Person party to a Loan Document.  Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.  Each Lender acknowledges that Agent does not have any duty or responsibility, either initially or on a continuing basis to provide such Lender with any credit or other information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement.

 

15.7                                          Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents or the DIP Intercreditor Agreement, including court costs, attorneys’ fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is authorized and directed to deduct and retain sufficient amounts from the Collections of Parent and its Subsidiaries received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders.  In the event Agent is not reimbursed for such costs and expenses by Parent or its Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s ratable share thereof.  Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so) from and against any and all Indemnified Liabilities; provided, that, no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an extension of credit hereunder.  Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s ratable share of any costs or out-of-pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection

 

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with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document or the DIP Intercreditor Agreement to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section shall survive the payment of all Obligations hereunder, the termination of this Agreement and the resignation or replacement of Agent.

 

15.8                                          Agent in Individual Capacity.  Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide bank products to, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though Agent were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group acknowledge that, pursuant to such activities, Agent or its Affiliates may receive information regarding Borrowers or their Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrowers or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them.  The terms “Lender” and “Lenders” may include Agent in its individual capacity.

 

15.9                                          Successor Agent.  Agent may resign as Agent upon 30 days (10 days if an Event of Default has occurred and is continuing) prior written notice to the Lenders (unless such notice period is waived by the Required Lenders) and Administrative Borrower (unless such notice is waived by Administrative Borrower).  If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders.  If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with Administrative Borrower and with the consent of the Required Lenders, a successor Agent.  In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

 

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15.10                                   Lender in Individual Capacity.  Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide bank products to, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group acknowledge that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

 

15.11                                   Collateral Matters.

 

(a)                                 The Lenders hereby irrevocably authorize Agent, upon the written direction of the Required Lenders, to release, or subordinate, any Lien on any of the Collateral (i) upon payment and satisfaction of all of the Obligations, or (ii) constituting property being sold or disposed of if Administrative Borrower or any Loan Party certifies to Agent and the Required Lenders that the sale or disposition is made in compliance with Section 6.4 (and Agent and the Required Lenders may rely conclusively on any such certificate, without further inquiry), or (iii) constituting property in which any Loan Party did not own an interest at the time the security interest, mortgage or lien was granted or at any time thereafter, or (iv) having a value in the aggregate in any twelve (12) month period of less than $2,500,000, and to the extent Agent (at the direction of the Required Lenders) may release its Lien on any such Collateral pursuant to the sale or other disposition thereof, such sale or other disposition shall be deemed consented to by the Lenders, or (v) if required or permitted under the terms of any of the other Loan Documents, including any intercreditor agreement, or (vi) constituting property leased to a Loan Party under a lease that has expired or is terminated, or (vii) subject to Section 14.1, the Canadian Security Documents and the Security Documents, if the release is approved, authorized or ratified in writing by the Required Lenders.  Upon request by Agent or any Borrower at any time, the Lenders will confirm in writing Agent’s authority to release or subordinate any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, that, (1) Agent shall not be required to execute any document necessary to evidence such release or subordination on terms that, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release or subordination shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released or subordinated) upon (or obligations of Borrower in respect of) all interests retained by any Loan Party, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  The Lenders further hereby irrevocably authorize Agent, upon the direction of the Required Lenders, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures Permitted Purchase Money Indebtedness.

 

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(b)                                 The Loan Parties and the Lenders hereby irrevocably authorize Agent, upon the written instruction of the Required Lenders, to (A) consent to, credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code or other bankruptcy laws, including under Section 363 of the Bankruptcy Code, (B) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Code or the PPSA, including pursuant to Sections 9-610 or 9-620 of the Code, or (C) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by Agent (whether by judicial action or otherwise) in accordance with applicable law.  In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Lenders whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the asset or assets so purchased (or in the Equity Interests of the acquisition vehicle or vehicles that are used to consummate such purchase) and (ii) the Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by such acquisition vehicle or vehicles and in connection therewith the Agent may reduce the Obligations owed to the Lenders (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration.

 

(c)                                  Agent shall have no obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by a Loan Party or is cared for, protected, or insured or has been encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or that any particular items of Collateral meet the eligibility criteria applicable in respect thereof or whether to impose, maintain, reduce, or eliminate any particular reserve hereunder or whether the amount of any such reserve is appropriate or not, 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 Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion, regardless of whether Agent shall obtain its own interest in the Collateral in its capacity as one of the Lenders, and that Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise provided herein.

 

(d)                                 In no event shall the Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Agent has been advised of the likelihood of such loss or damage and

 

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regardless of the form of action. Notwithstanding any provision of this Agreement, the Agent shall not have any duties or responsibilities except those expressly set forth herein and the permissive provisions with respect to the Agent set forth herein shall not be deemed to be duties. Notwithstanding anything to the contrary contained herein, the Agent shall have no responsibility for the preparing, recording, filing, re-recording, or re-filing of any financing statement, continuation statement or other instrument in any public office. In no event shall the Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

15.12                                   Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                 Each of the Lenders agrees that it shall not, without the express written consent of the Required Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of the Required Lenders, set off against the Obligations, any amounts owing by such Lender to Parent or its Subsidiaries or any deposit accounts of Parent or its Subsidiaries now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by the Required Lenders, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

 

(b)                                 If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

15.13                                   Agency for Perfection.  Agent hereby appoints each other Lender as its agent (and each Lender hereby accepts such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of

 

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the Code or in accordance with the PPSA or the Securities Transfer Act of any applicable jurisdictions in Canada can be perfected by possession or control.  Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent and the Required Lenders thereof, and, promptly upon Agent’s request (upon the direction of the Required Lenders) therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

 

15.14                                   Payments by Agent to the Lenders.  All payments to be made by Agent to the Lenders shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent.  Concurrently with, or promptly following each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

 

15.15                                   Concerning the Collateral and Related Loan Documents.  Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents and the DIP Intercreditor Agreement.  Each member of the Lender Group agrees that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

 

15.16                                   Collateral Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.

 

(a)                                 By becoming a party to this Agreement, each Lender:

 

(i)                               is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each collateral report respecting Parent or its Subsidiaries (each, a “Report”) delivered in accordance with Section 5.2, and Agent shall so furnish each Lender with such Reports,

 

(ii)                            expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

 

(iii)                         expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Parent and its Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’ books and records, as well as on representations of each Borrower’s personnel,

 

(iv)                        agrees to keep all Reports and other material, non-public information regarding Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

 

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(v)                           without limiting the generality of any other indemnification provision contained in this Agreement, agrees:  (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

 

(b)                                 In addition to the foregoing: (i) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Parent or any Subsidiary of Parent to Agent that has not been contemporaneously provided by Parent or its Subsidiaries to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (ii) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Parent or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of such Borrower the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Parent or its Subsidiaries, Agent promptly shall provide a copy of same to such Lender and (iii) any time that Agent renders to any Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

 

15.17                                   [Reserved].

 

15.18                                   Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder, shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis in accordance with such Lender’s percentage of the Term Loan outstanding.  Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender.  Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to Borrower or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for such Lender or on its behalf, nor to take any other

 

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action on behalf of such Lender hereunder or in connection with the financing contemplated herein.

 

15.19                                   Appointment for the Province of Québec.  Without prejudice to Section 15.1 above, each member of the Lender Group hereby appoints Agent as the person holding the power of attorney (fondé pouvoir) of the Lender Group as contemplated under Article 2692 of the Civil Code of Québec, to enter into, to take and to hold on their behalf, and for their benefit, any deed of hypothec (“Deed of Hypothec”) to be executed by any of the Borrowers or Guarantors granting a hypothec pursuant to the laws of the Province of Québec (Canada) and to exercise such powers and duties which are conferred thereupon under such deed.  All of the Lender Group hereby additionally appoints Agent as agent, mandatary, custodian and depositary for and on behalf of the Lender Group (a) to hold and to be the sole registered holder of any bond (“Bond”) issued under the Deed of Hypothec, the whole notwithstanding any other applicable law, and (b) to enter into, to take and to hold on their behalf, and for their benefit, a bond pledge agreement (“Pledge”) to be executed by such Borrower or such Guarantor pursuant to the laws of the Province of Québec and creating a pledge of the Bond as security for the payment and performance of, inter alia, the Obligations.  In this respect, (i) Agent as agent, mandatary, custodian and depositary for and on behalf of the Lender Group, shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by the Pledge, owing to each of the members of the Lender Group for and on behalf of whom the Bond is so held from time to time, and (ii) each of the members of the Lender Group will be entitled to the benefits of any property or assets charged under the Deed of Hypothec and the Pledge and will participate in the proceeds of realization of any such property or assets.  Agent, in such aforesaid capacities shall (A) upon the direction of the Required Lenders have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to Agent with respect to the property or assets charged under the Deed of Hypothec and Pledge, any other applicable law or otherwise, and (B) benefit from and be subject to all provisions hereof with respect to the Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lender Group, the Borrowers or the Guarantors.  The execution prior to the date hereof by Agent of any Deed of Hypothec, Pledge or other security documents made pursuant to the laws of the Province of Québec (Canada) is hereby ratified and confirmed.  The constitution of Agent as the Person holding the power of attorney (fondé de pouvoir), and of Agent, as agent, mandatary, custodian and depositary with respect to any bond that may be issued and pledged from time to time to Agent for the benefit of the Lender Group, shall be deemed to have been ratified and confirmed by each Person accepting an assignment of, a participation in or an arrangement in respect of, all or any portion of any of the Lender Group’s rights and obligations under this Agreement by the execution of an assignment, including an Assignment and Acceptance Agreement or other agreement pursuant to which it becomes such assignee or participant, and by each successor Agent by the execution of an assignment agreement or other agreement, or by the compliance with other formalities, as the case may be, pursuant to which it becomes a successor Agent hereunder.

 

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15.20                                   Dutch Parallel Debts.

 

(a)                                 In this clause:

 

Dutch Parallel Debt” means any amount which a Loan Party owes to the Agent under this Clause.

 

Underlying Debt” means at any given time, each Obligation (whether present or future, actual or contingent) owing by a Loan Party to a Finance Party under the Loan Documents (including, for the avoidance of doubt, any change or increase in those obligations pursuant to or in connection with any amendment or supplement or restatement or novation of any Loan Document, in each case whether or not anticipated as of the date of this Agreement, for the avoidance of doubt, excluding that Loan Party’s Dutch Parallel Debt.

 

(b)                                 Each Loan Party irrevocably and unconditionally undertakes to pay to the Agent amounts equal to, and in the currency or currencies of, its Underlying Debt.

 

(c)                                  The Dutch Parallel Debt of each Loan Party: (i) shall become due and payable at the same time as its Underlying Debt and (b)is independent and separate from, and without prejudice to, its Underlying Debt.

 

(d)                                 For purposes of this Clause, the Agent: (a) is the independent and separate creditor of each Dutch Parallel Debt, (b) acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Dutch Parallel Debt shall not be held on trust, and (c) shall have the independent and separate right to demand payment of each Dutch Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

 

(e)                                  The Dutch Parallel Debt of a Loan Party shall be (a) decreased to the extent that its Underlying Debt has been irrevocably and unconditionally paid or discharged, and (b) increased to the extent to that its Underlying Debt has increased, and the Underlying Debt of a Loan Party shall be (x) decreased to the extent that its Dutch Parallel Debt has been irrevocably and unconditionally paid or discharged, and (y) increased to the extent that its Dutch Parallel Debt has increased, in each case provided that the Dutch Parallel Debt of a Loan Party shall never exceed its Underlying Debt.

 

(f)                                   All amounts received or recovered by the Agent in connection with this Clause, to the extent permitted by applicable law, shall be applied in accordance with Section 5 (Application of Proceeds) of the Intercreditor Agreement.

 

This Clause applies for the purpose of determining the secured obligations in the Security Documents governed by Dutch law.

 

16.                               WITHHOLDING TAXES.

 

16.1                                          No Setoff; Payments.

 

(a)                                 All payments made by any Loan Party under any Loan Document will be made without setoff, counterclaim or other defense.  In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes unless

 

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deduction or withholding of any Taxes is required under applicable law.  If any deduction or withholding of any Tax is required by law, the applicable withholding agent shall make such deduction or withholding and shall timely pay to the relevant Governmental Authority such amounts in accordance with applicable law.  To the extent such Tax is an Indemnified Tax, the applicable Loan Party shall pay such additional amounts as may be necessary so that, after such required deduction or withholding of Indemnified Tax (including any Indemnified Tax on the additional amounts payable under this Section 16.1), the amount payable to the affected Agent or Lender (as applicable) by any Loan Party is equal to same amount that would have been so payable had no such deduction or withholding of Indemnified Tax been required under applicable law.

 

(b)                                 The Loan Parties shall indemnify each Agent or Lender (as applicable), within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes on the additional amounts payable under this Section 16.1) payable or paid by such Agent or Lender or required to be withheld or deducted from a payment to such Agent or Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Administrative Borrower by a Lender (with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(c)                                  Administrative Borrower will furnish to Agent as promptly as possible after payment by any Loan Party of any Tax in respect of any payment made by any Loan Party under any Loan Document is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by Loan Parties or other evidence reasonably satisfactory to the Required Lenders.

 

(d)                                 The Loan Parties agree to pay any present or future stamp, value added or documentary Taxes, intangible, recording or any other similar property Taxes that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document (collectively, “Other Taxes”).

 

(e)                                  The Loan Parties shall jointly and severally indemnify each recipient of amounts payable under this Section 16.1, within 10 Business Days after demand therefor, for the full amount of any Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such recipient or required to be withheld or deducted from a payment to such recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability, which also describes in reasonable detail the basis for such payment or liability, delivered to a Loan Party by a Lender (with a copy to the Agent), shall be conclusive absent manifest error.

 

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16.2                                          Exemptions.

 

(a)                                 If a Lender is entitled to claim an exemption or reduction from U.S. withholding tax, such Lender agrees with and in favor of Agent, to deliver to Administrative Borrower and Agent one of the following before receiving its first payment under the Loan Documents:

 

(i)                               In the case of a Lender claiming an exemption from U.S. withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender, substantially in the form of Exhibit D-1, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of the IRC (a “U.S. Tax Compliance Certificate”), and (B) an original, properly completed and executed IRS Form W-8BEN;

 

(ii)                            in the case of a Lender claiming an exemption from, or reduction of, U.S. federal withholding tax under a U.S. tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii)                         an original, properly completed and executed copy of IRS Form W-8ECI;

 

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

 

(v)                           a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, U.S. withholding or backup withholding tax; or

 

(vi)                        if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by the Administrative Borrower or Agent as may be necessary for Administrative Borrower and Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under Section 1471 through 1474 of the IRC or to

 

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determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (vi), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(b)                                 Each Lender shall provide new forms (or successor forms) upon the expiration, invalidity or obsolescence of any previously delivered forms and shall promptly notify Administrative Borrower and Agent in writing of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(c)                                  If a Lender is entitled to claim an exemption from, or reduction of, withholding or backup withholding tax in a jurisdiction other than the United States, such Lender agrees with and in favor of Agent and Administrative Borrower to deliver to Administrative Borrower and Agent at the times reasonably requested by Agent or Administrative Borrower such forms or other information reasonably requested by Administrative Borrower or Agent as will permit exemption from, or reduction of, withholding or backup withholding tax, but only if such Lender or such Participant (i) is legally eligible to deliver such forms and (ii) in such Lender’s reasonable judgment delivery of such forms or other information does not subject such Lender to any material unreimbursed cost or expense or does not materially prejudice the legal or commercial position of such Lender.  Each Lender shall provide new forms (or successor forms) or information upon the expiration, invalidity or obsolescence of any previously delivered forms or information and to promptly notify Administrative Borrower and Agent in writing of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(d)                                 Each Borrower agrees that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 (including the requirements under this Section 16.2) subject to the provisions of Section 14.2, in each case, with respect thereto as if it were a Lender.

 

16.3                                          Lender Indemnification.  Each Lender shall severally indemnify the Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so in accordance with Section 16.1), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 13.1(i) relating to the maintenance of a Participant Register and (iii) any non-Indemnified Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this Section 16.3.

 

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16.4                                          Refunds.

 

If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 16, it shall pay over such refund to Borrowers (but only to the extent of payments made, or additional amounts paid, by any Loan Party under this Section 16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such a refund); provided, that the Loan Parties, upon the request of Agent or such Lender, agree to repay the amount paid over to the Loan Parties (plus any penalties, interest or other charges, imposed by the relevant Governmental Authority in respect thereof) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 16.4, in no event will Agent or a Lender be required to pay any amount to the Loan Parties pursuant to this Section 16.4 the payment of which would place Agent or such Lender in a less favorable net after-tax position than Agent or such Lender would have been in if the tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such tax had never been paid. Notwithstanding anything in this Agreement to the contrary, this Section 16.4 shall not be construed to require Agent or any Lender to make available its tax returns (or any other confidential information which it in good faith deems confidential) to any Borrower or any other Person.

 

17.                               GENERAL PROVISIONS.

 

17.1                                          Effectiveness.  This Agreement shall be binding and deemed effective when executed by each Loan Party, Agent, and each Lender whose signature is provided for on the signature pages hereof.

 

17.2                                          Section Headings.  Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

 

17.3                                          Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or any Loan Party, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

 

17.4                                          Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

17.5                                          Right of Setoff.  If an Event of Default shall have occurred and be continuing, any Lender and any Affiliate of any Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate of a Lender to or for the credit or the account of any Loan Party against any of and all the Obligations held by such Lender or

 

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Affiliate of a Lender, irrespective of whether or not such Lender or Affiliate of a Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender or Affiliate of a Lender shall notify the Borrower and the Agent of such set-off or application; provided, that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Lender or Affiliate of a Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender or Affiliate of a Lender may have.

 

17.6                                          Debtor-Creditor Relationship.  The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

 

17.7                                          Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.

 

17.8                                          [Reserved].

 

17.9                                          Confidentiality.

 

(a)                                 Agent and Lenders each individually (and not jointly or jointly and severally) agree that non-public information regarding Parent and its Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group, provided, that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required

 

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by statute, decision, or judicial or administrative order, rule, or regulation; provided, that (x) prior to any disclosure under clause (iii) or (iv), the disclosing party agrees to provide Administrative Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Administrative Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under clause (iii) or (iv) shall be limited to the portion of the Confidential Information as may be required by such regulatory authority, statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Administrative Borrower pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement, provided, that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than any Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

 

(b)                                 Anything in this Agreement to the contrary notwithstanding, Agent (upon the direction of the Required Lenders) may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or for its marketing materials, with such information to consist of deal terms and other information customarily found in such publications or marketing materials and may otherwise use the name, logos, and other insignia of Borrowers and the Loan Parties and the Commitments provided hereunder in any “tombstone,” press releases, or other advertisements, on its website or in other marketing materials of Agent.

 

17.10                                   Lender Group Expenses.  Borrowers agree to pay any and all Lender Group Expenses promptly upon demand therefor by Agent.  Borrowers agree that their respective obligations contained in this Section 17.10 shall survive payment or satisfaction in full of all other Obligations and the termination of this Agreement.

 

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17.11                                   Survival.  All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any loan or any fee or any other amount payable under this Agreement is outstanding.  All indemnity obligations of the Loan Parties in the Loan Documents shall survive the repayment in full of the Obligations and the termination of the Loan Documents.

 

17.12                                   Patriot Act.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrowers that, pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act.  In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual background checks for the Loan Parties’ senior management and key principals, and each Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Group Expenses hereunder and be for the account of such Borrower.

 

17.13                                   Integration.  This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

 

17.14                                   Administrative Borrower as Agent for Borrowers.

 

(a)                                 Each Borrower hereby irrevocably appoints and constitutes Parent (“Administrative Borrower”) as its agent and attorney-in-fact to request and receive Term Loans pursuant to this Agreement and the other Loan Documents from any Lender in the name or on behalf of such Borrower.  Agent and Lenders may disburse the Term Loans to such bank account of Administrative Borrower or a Borrower or otherwise make such Term Loans to a Borrower as Administrative Borrower may designate or direct, without notice to any other Borrower or Guarantor.  Notwithstanding anything to the contrary contained herein, Agent (upon the direction of the Required Lenders) may at any time and from time to time require that Term Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.

 

(b)                                 Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 17.14.  Administrative Borrower shall ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the account of Parent shall be paid to or for the account of such Borrower.

 

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

 

(d)                                 Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any other Borrower or any Guarantor by Administrative Borrower 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 resignation or termination of the appointment of Administrative Borrower as agent as aforesaid shall be effective, except after ten (10) Business Days’ prior written notice to Agent.  If the Administrative Borrower resigns under this Agreement, Borrowers shall be entitled to appoint a successor Administrative Borrower (which shall be a Borrower) by written notice to Agent.  Upon delivery to Agent of the written acceptance of its appointment as successor Administrative Borrower hereunder, such successor Administrative Borrower shall succeed to all the rights, powers and duties of the retiring Administrative Borrower and the term “Administrative Borrower” shall mean such successor Administrative Borrower and the retiring or terminated Administrative Borrower’s appointment, powers and duties as Administrative Borrower shall be terminated.

 

17.15                                   Currency Indemnity.  If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement or any of the other Loan Documents, it becomes necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or under any of the other Loan Documents in any currency other than the Judgment Currency (the “Currency Due”), then conversion shall be made at the exchange rate at which Agent is able, on the relevant date, to purchase the Currency Due with the Judgment Currency prevailing on the Business Day before the day on which judgment is given.  In the event that there is a change in the rate of exchange rate prevailing between the Business Day before the day on which the judgment is given and the date of receipt by Agent of the amount due, Borrowers will, on the date of receipt by Agent, pay such additional amounts, if any, as may be necessary to ensure that the amount received by Agent on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on the date of receipt by Agent is the amount then due under this Agreement or such other of the Loan Documents in the Currency Due.  If the amount of the Currency Due which Agent is able to purchase is less than the amount of the Currency Due originally due to it, Borrowers and Guarantors shall indemnify and save Agent harmless from and against loss or damage arising as a result of such deficiency.  If the amount of the Judgment Currency which Agent is able to purchase is greater than the amount of the Judgment Currency original due it, Agent agrees, so long as no Event of Default has occurred and is continuing, to return the amount of any excess to Borrowers (or to any other Person who may be entitled thereto under applicable law).  The indemnity contained herein shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Loan Documents, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence

 

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granted by any Agent from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due under this Agreement or any of the other Loan Documents or under any judgment or order.

 

17.16                                   Anti-Money Laundering Legislation.

 

(a)                                 Each Loan Party acknowledges that, pursuant to the Proceeds of Crime Money Laundering) and Terrorist Financing Act (Canada) and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws, under the laws of Canada (collectively, including any guidelines or orders thereunder, “AML Legislation”), Agent and Lenders may be required to obtain, verify and record information regarding each Loan Party, its respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of such Loan Party, and the transactions contemplated hereby.  Administrative Borrower shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or Agent, or any prospective assign or participant of a Lender or Agent, necessary in order to comply with any applicable AML Legislation, whether now or hereafter in existence.

 

(b)                                 If Agent has ascertained the identity of any Loan Party or any authorized signatories of any Loan Party for the purposes of applicable AML Legislation, then the Agent:

 

(i)                               shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and the Agent within the meaning of applicable AML Legislation; and

 

(ii)                            shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.

 

(c)                                  Notwithstanding the provisions of this Section and except as may otherwise be agreed in writing, each Lender agrees that Agent has no obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from the Loan Parties or any such authorized signatory in doing so.

 

17.17                                   Quebec Interpretation.  For all purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall include “movable property,” (b) “real property” shall include “immovable property,” (c) “tangible property” shall include “corporeal property,” (d) “intangible property” shall include “incorporeal property,” (e) “security interest,” “mortgage” and “lien” shall include a “hypothec,” “prior claim” and a “resolutory clause,” (f) all references to filing, registering or recording under the Code or PPSA shall include publication under the Civil Code of Quebec, (g) all references to “perfection” of or “perfected” liens or security interest shall include a reference to an “opposable” or “set up” lien or security interest as against third parties, (h) any “right of offset,” “right of setoff” or

 

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similar expression shall include a “right of compensation,” (i) “goods” shall include corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall include a “mandatary,” (k) “construction liens” shall include “legal hypothecs,” (l) “joint and several” shall include solidary, (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault,” (n) “beneficial ownership” shall include “ownership on behalf of another as mandatary,” (o) “easement” shall include “servitude,” (p) “priority” shall include “prior claim,” (q) “survey” shall include “certificate of location and plan,” and (r) “fee simple title” shall include “absolute ownership”.

 

[Signature pages to follow.]

 

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Annex B

 

Amended Schedules to DIP Term Loan Agreement

 

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Schedule 1.1

 

Definitions

 

As used in the Agreement, the following terms shall have the following definitions:

 

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

 

Account” means an account (as that term is defined in the Code).

 

Account Debtor” means any Person who is obligated on an Account, chattel paper, or a general intangible.

 

Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

 

Acquisition” means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, consolidation, amalgamation or otherwise) by a Person or its Subsidiaries of at least a majority of the Equity Interests of any other Person having ordinary voting power for the election of directors or other members of the governing body of such other Person.

 

Adequate Protection Provisions” means the provisions in paragraph 13 and 14 of the First Interim DIP Order, the Second Interim DIP Order or the Final DIP Order, as applicable, or any similar provisions therein or in another order entered by the Bankruptcy Court, providing for adequate protection to the Prepetition Senior Loan Debt and Prepetition Term Loan Debt.

 

Additional Documents” has the meaning specified therefor in Section 5.12 of the Agreement.

 

Administrative Borrower” has the meaning specified therefor in Section 17.14 of the Agreement.

 

Affected Lender” has the meaning specified therefor in Section 2.13(b) of the Agreement.

 

Affiliate” means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Equity Interests of such Person, by contract, or otherwise; provided, however, that, for purposes of Section 6.12 of the Agreement: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests of such Person having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other

 

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ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each current and former (within the five-year period prior to the Closing Date) officer and/or director (or comparable manager) of a Loan Party or Sponsor shall be deemed to be an Affiliate of such a Loan Party, (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person and (d) any Person that is a current or former (within the five-year period prior to the Closing Date) partner, member or principal (or any employee acting in any such capacity) of any Loan Party or a consultant (other than any consultants, financial advisors and/or other third party service providers of nationally recognized standing) of Sponsor shall be deemed to be an Affiliate of a Loan Party.

 

Agent” has the meaning specified therefor in the preamble to the Agreement.

 

Agent DIP Fee Letter” means that certain letter agreement of even date herewith among the Borrowers and the Agent.

 

Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1 as the Agent’s Account.

 

Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent under the Loan Documents.

 

Agent-Related Persons” means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

 

Agreement” means the Term Loan Agreement to which this Schedule 1.1 is attached.

 

Amendment No. 1” means that certain Amendment No. 1 to the Senior Secured Superpriority Term Loan Agreement dated as of June 24, 2015, by and among the Loan Parties, the Lenders and the Agent.

 

Amendment No. 1 Effective Date” means the date on which each of the conditions to effectiveness specified in Amendment No. 1 has been satisfied or waived in accordance with the terms of such amendment.

 

AML Legislation” has the meaning specified therefor in Section 17.16 of the Agreement.

 

Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent (at the written direction of the Required Lenders) to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the Agreement.

 

Approved Budget” means (i) the Initial Budget, as updated pursuant to Section 5.1(c) during the continuance of the Chapter 11 Cases and CCAA Recognition Proceedings to the extent such update is in form and substance satisfactory to the Lenders, and (ii) a monthly budget for the four months following the Petition Date, provided, however, that Lenders may not require the removal of line items contained in a prior Approved Budget.

 

Assignee” has the meaning specified therefor in Section 13.1(a) of the Agreement.

 

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Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1.

 

Auction” has the meaning specified therefor in Schedule 5.22 of the Agreement.

 

Authorized Person” means any one of the individuals identified on Schedule A-2, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

 

Bank of America Accounts” has the meaning specified therefor in Section 5.10 of the Agreement.

 

Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

 

Bankruptcy Court” has the meaning specified therefor in the recitals to the Agreement.

 

Bargaining Unit Defined Benefit Plan Calculation Error” has the meaning specified therefor on Schedule 4.11 to the Agreement.

 

Bargaining Unit Defined Benefit Plan Calculation Error Event” means any event or series of events related to or arising from the Bargaining Unit Defined Benefit Plan Calculation Error which individually or in the aggregate for all such events do not result in liability to Parent and its Subsidiaries of more than $5,000,000.

 

BIA” means the Bankruptcy and Insolvency Act (Canada), R.S.C. 1985, c. B-3, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all official rules, regulations and interpretations thereunder or related thereto.

 

Bidding Procedures” has the meaning specified therefor in Schedule 5.22 of the Agreement.

 

Board of Directors” means, as to any Person, the board of directors (or comparable managers) of such Person or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

 

Borrower” and “Borrowers” shall have the meanings assigned to such terms in the Recitals of this Agreement.

 

Borrowing” shall mean a Term Loan made on a single date.

 

Borrowing Request” shall mean a request by the Administrative Borrower in accordance with the terms of Section 2.3, substantially in the form of Exhibit D-1.

 

Business Day” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the state of New York.

 

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Canadian Court” has the meaning specified therefor in the recitals to the Agreement.

 

Canadian Insolvency Law” shall mean any of the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), and the Winding-up and Restructuring Act (Canada), each as now and hereafter in effect, and any successors to such statutes and any proceeding under applicable federal or provincial corporate law seeking an arrangement or compromise of some or all of the debts of a Person or any proceeding under provincial or federal law providing for the appointment of a receiver, the sale or seizure of collateral by a creditor or a stay of proceedings with respect to some or all claims of creditors against a Person.

 

Canadian Loan Party” and “Canadian Loan Parties” means, individually and collectively, Colt Canada and any other Loan Party organized under the laws of Canada or any province or territory thereof.

 

Canadian Orders” means, collectively, the Initial Recognition Order and, the Final DIP Recognition Order, and separately, the Initial Recognition Order or, the Final DIP Recognition Order, as the context requires.

 

Canadian Pension Plan” means any plan, program or arrangement that is a pension plan for the purposes of any applicable pension benefits legislation or any tax laws of Canada or a Province thereof, whether or not registered under any such laws, which is maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Borrower or any Guarantor in respect of any Person’s employment in Canada with such Borrower or such Guarantor.

 

Canadian Security Agreement” means the Canadian Security Agreement dated as of the date hereof, in form and substance reasonably satisfactory to the Required Lenders, executed and delivered by Canadian Loan Parties to Agent.

 

Canadian Security Documents” means (a) each document identified on Schedule S to the Agreement (as such schedule may be amended or supplemented by Agent to add additional Canadian Security Documents in connection with the Loan Documents) and (b) any other documents governed by the laws of Canada or any province or territory thereof under which a Lien is granted to Agent or may be required by the Required Lenders, and (c) the Initial Recognition Order and the Final DIP Recognition Order.

 

Capital Expenditures” means, with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed.

 

Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

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Carve-Out” shall have the meaning assigned to such term in the Orders, as applicable.

 

Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days 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, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above; provided, that in the case of any Foreign Subsidiary, “Cash Equivalents” of such Foreign Subsidiary shall also include direct obligations of the sovereign country (or any agency thereof which is backed by the full faith and credit of such sovereign country) in which such Foreign Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such foreign country (or any agency thereof); provided, further, in the case of any Foreign Subsidiary that is not a Loan Party, “Cash Equivalents” of such Foreign Subsidiary shall also include securities and other investments held by such Foreign Subsidiary in the ordinary course of business which are substantially similar to the assets described in clauses (a) through (g) above.

 

Cash Interest” has the meaning specified therefor in Section 2.6(a) of the Agreement.

 

Cash Management Order” means, as the context requires, that certain (i) Interim Order (I) Authorizing Continued Use of Existing Cash Management System and Bank Accounts; (II) Waiving Certain United States Trustee Requirements; (III) Authorizing Continued Performance of Intercompany Transactions; and (IV) Granting Related Relief, entered by the Bankruptcy Court on             at Docket No.     , or (ii) Final Order (I) Authorizing Continued Use of Existing Cash Management System and Bank Accounts; (II) Waiving Certain United States Trustee Requirements; (III) Authorizing Continued Performance of Intercompany Transactions; and (IV) Granting Related Relief order, in each case, entered by the Bankruptcy Court, which shall be in form and substance reasonably satisfactory to the Lenders.

 

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Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.

 

CCAA” means the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all official rules, regulations and interpretations thereunder or related thereto.

 

CCAA Recognition Proceedings” has the meaning specified therefor in the recitals to the Agreement.

 

CDH II” has the meaning specified therefor in the recitals to the Agreement.

 

Change of Control” means:

 

(a)                                 the Permitted Holders cease to be the “beneficial owner” (as defined in Rules 13 d-3 and 13 d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the total voting power of the Equity Interests of Parent then outstanding, whether as a result of the issuance of securities of Parent, any merger, consolidation, winding up, liquidation or dissolution of Parent, any direct or indirect transfer of securities by any Permitted Holder or otherwise (for purposes of this clause (a) below, the Permitted Holders shall be deemed to beneficially own any the Equity Interests holding voting power of an entity (the “specified entity”) held by any other entity (the “parent entity”) so long as (x) the Permitted Holders beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Equity Interests of the parent entity) or (y) no “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), beneficially owns, directly or indirectly, a larger percentage of the voting power of the Equity Interests of the parent entity than the Permitted Holders;

 

(b)                                 [reserved];

 

(c)                                  the Continuing Directors shall cease for any reason to constitute a majority of the Board of Directors of Parent then in office;

 

(d)                                 except as otherwise expressly permitted herein, Parent shall cease to be the direct or indirect holder and owner of one hundred (100%) percent of the Equity Interests of the other Loan Parties; or

 

(e)                                  a “Change of Control” under (and as defined in) the DIP ABL Credit Agreement, the Senior Note Indenture, the Prepetition Term Loan Agreement or the Prepetition ABL Credit Agreement.

 

Chapter 11 Caseshas the meaning specified therefor in the recitals to the Agreement.

 

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Closing Date” means the date of the making of the initial Tranche A Term Loan under the Agreement, which occurred on June 17, 2015.

 

Closing Date LCs” has the meaning specified in clause (d) of the definition of Permitted Liens.

 

Closing Date Transactions” means, collectively, the transactions contemplated by the Loan Documents and the DIP ABL Loan Documents (as in effect on the Closing Date), as amended in connection with each of the foregoing.

 

Code” means the New York Uniform Commercial Code, as in effect from time to time.

 

Collateral” means all pre-Petition Date and all post-Petition Date assets and interests in assets and proceeds thereof now owned or hereafter acquired by Parent or its Subsidiaries in or upon which a Lien is granted by such Person in favor of Agent or the Lenders under any of the Loan Documents.

 

Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, freight forwarder, or other Person in possession of, having a Lien upon, or having rights or interests in Parent’s or its Subsidiaries’ books and records, Equipment, or Inventory, in each case, in form and substance satisfactory to Agent and the Required Lenders.

 

Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds).

 

Commitment” means, with respect to each Lender, its Term Loan Commitment, and, with respect to all Lenders, their Term Loan Commitments, as the context requires.

 

Committee” means the official committee of unsecured creditors appointed in the Chapter 11 Cases, pursuant to Section 1102 of the Bankruptcy Code.

 

Confidential Information” has the meaning specified therefor in Section 17.9(a) of the Agreement.

 

Consulting Agreement” means the Consulting Services Agreement, dated as of July 12, 2013, by and between Parent and Sciens Institutional Services LLC, as amended, restated, modified or supplemented from time to time in accordance with the terms hereof, pursuant to which Parent engaged Sciens Institutional Services LLC to provide certain consulting services.

 

Consummation Date” shall mean the date of substantial consummation (as defined in Section 1101 of the Bankruptcy Code and which for purposes of this Agreement shall be no later than the effective date) of a plan of reorganization that is confirmed pursuant to an order, in form and substance satisfactory to the Lenders, of the Bankruptcy Court and recognized by an order of the Canadian Court (in form and substance satisfactory to the Lenders), each as applicable.

 

Continuing Director” means (a) any member of the Board of Directors of Parent who was a director (or comparable manager) on the Closing Date, after giving effect to the execution

 

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and delivery of this Agreement and the other transactions contemplated hereby to occur on such date, and (b) any individual who becomes a member of the Board of Directors of Parent after the Closing Date if such individual was approved, appointed or nominated for election to the Board of Directors by either the Permitted Holders or a majority of the Continuing Directors.

 

Control Agreement” means a control agreement, in form and substance satisfactory to Agent and the Required Lenders, executed and delivered by Parent or one of its Subsidiaries, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

 

Covered Claims” shall have the meaning given to such term in the Litigation Management Agreement, dated as of July 12, 2013, by and among, Parent, New Colt, Colt’s Manufacturing, and each of the Stockholder Representatives signatory thereto, as in effect on the Closing Date.

 

Currency Due” has the meaning specified in Section 17.15 of the Agreement.

 

DCAM Consignment” has the meaning specified therefor in the definition of Permitted Disposition.

 

Debtorhas the meaning specified therefor in the recitals to the Agreement.

 

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