EX-10.1 2 d576044dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

EXECUTION VERSION

 

 

 

 

LOGO

CREDIT AGREEMENT

by and among

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

THE LENDERS THAT ARE PARTIES HERETO

as the Lenders,

NOW INC., as Parent,

NOW INC. and DNOW L.P., as US Borrowers,

and

DNOW CANADA ULC, as Canadian Borrower

Dated as of April 30, 2018

WELLS FARGO BANK, NATIONAL ASSOCIATION,

JPMORGAN CHASE BANK, N.A. and

ROYAL BANK OF CANADA,

as Joint Lead Arrangers,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

JPMORGAN CHASE BANK, N.A. and

ROYAL BANK OF CANADA,

as Joint Book Runners,

JPMORGAN CHASE BANK, N.A. and

ROYAL BANK OF CANADA,

as Co-Syndication Agents, and

FIFTH THIRD BANK,

as Documentation Agent

 

 

 


TABLE OF CONTENTS

 

         Page  

1.     DEFINITIONS AND CONSTRUCTION

     1  

1.1.

 

Definitions

     1  

1.2.

 

Accounting Terms

     81  

1.3.

 

Code; PPSA

     82  

1.4.

 

Construction

     82  

1.5.

 

Time References

     83  

1.6.

 

Schedules and Exhibits

     83  

1.7.

 

Exchange Rates; Currency Equivalents; Applicable Currency

     84  

1.8.

 

Quebec Interpretation

     84  

1.9.

 

Scottish Interpretation

     85  

2.     LOANS AND TERMS OF PAYMENT

     85  

2.1.

 

Revolving Loans

     85  

2.2.

 

[Reserved]

     87  

2.3.

 

Borrowing Procedures and Settlements

     87  

2.4.

 

Payments; Reductions of Commitments; Prepayments

     98  

2.5.

 

Promise to Pay; Promissory Notes

     106  

2.6.

 

Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations

     107  

2.7.

 

Crediting Payments

     110  

2.8.

 

Designated Account

     110  

2.9.

 

Maintenance of Loan Account; Statements of Obligations

     111  

2.10.

 

Fees

     111  

2.11A

 

US Letters of Credit

     112  

2.11B

 

Canadian Letters of Credit

     122  

2.11C

 

UK Letters of Credit

     133  

2.12.

 

Non-Base Rate Option

     143  

2.13.

 

Capital Requirements

     146  

2.14.

 

Incremental Facilities

     147  

2.15.

 

Joint and Several Liability of US Borrowers, UK Borrowers and Canadian Borrowers

     150  

2.16.

 

Currencies

     155  

2.17.

 

Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest

     155  

3.     CONDITIONS; TERM OF AGREEMENT

     156  

3.1.

 

Conditions Precedent to the Initial Extension of Credit

     156  

3.2.

 

Conditions Precedent to all Extensions of Credit

     156  

3.3.

 

Maturity

     157  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

3.4.

 

Effect of Maturity

     157  

3.5.

 

Early Termination by Borrowers

     157  

3.6.

 

Conditions Subsequent

     157  

4.     REPRESENTATIONS AND WARRANTIES

     157  

4.1.

 

Due Organization and Qualification; Subsidiaries

     158  

4.2.

 

Due Authorization; No Conflict

     158  

4.3.

 

Governmental Consents

     159  

4.4.

 

Binding Obligations; Perfected Liens

     159  

4.5.

 

Title to Assets; No Encumbrances

     160  

4.6.

 

Litigation

     160  

4.7.

 

Compliance with Laws

     160  

4.8.

 

No Material Adverse Effect

     160  

4.9.

 

Solvency

     160  

4.10.

 

Employee Benefits

     160  

4.11.

 

Environmental Condition

     161  

4.12.

 

Complete Disclosure

     162  

4.13.

 

Patriot Act, Etc.

     162  

4.14.

 

Indebtedness

     163  

4.15.

 

Payment of Taxes

     163  

4.16.

 

Margin Stock

     163  

4.17.

 

Governmental Regulation

     163  

4.18.

 

OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws

     163  

4.19.

 

Employee and Labor Matters

     164  

4.20.

 

[Reserved]

     164  

4.21.

 

Leases

     164  

4.22.

 

Eligible Accounts

     164  

4.23.

 

Eligible Inventory

     165  

4.24.

 

[Reserved]

     165  

4.25.

 

Location of Inventory

     165  

4.26.

 

Inventory Records

     165  

4.27.

 

Hedge Agreements

     165  

4.28.

 

Material Contracts

     165  

4.29.

 

Deduction of UK Tax

     165  

4.30.

 

Centre of Main Interest

     165  

4.31.

 

Ranking

     166  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

4.32.

 

Immaterial Subsidiaries

     166  

5.     AFFIRMATIVE COVENANTS

     166  

5.1.

 

Financial Statements, Reports, Certificates

     166  

5.2.

 

Reporting

     166  

5.3.

 

Existence

     166  

5.4.

 

Maintenance of Properties

     167  

5.5.

 

Taxes

     167  

5.6.

 

Insurance

     167  

5.7.

 

Inspection

     168  

5.8.

 

Compliance with Laws

     168  

5.9.

 

Environmental

     169  

5.10.

 

Disclosure Updates

     169  

5.11.

 

Formation of Subsidiaries

     169  

5.12.

 

Further Assurances

     171  

5.13.

 

[Reserved]

     171  

5.14.

 

Location of Inventory; Chief Executive Office

     171  

5.15.

 

OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws

     172  

5.16.

 

Bank Products

     172  

5.17.

 

Canadian Compliance

     172  

5.18.

 

Employee Benefits

     172  

5.19.

 

Centre of Main Interests

     173  

5.20.

 

People with Significant Control Regime

     173  

5.21.

 

UK Loan Party Cash Management Provisions

     173  

6.     NEGATIVE COVENANTS

     174  

6.1.

 

Indebtedness

     174  

6.2.

 

Liens

     174  

6.3.

 

Restrictions on Fundamental Changes

     174  

6.4.

 

Disposal of Assets

     175  

6.5.

 

Nature of Business

     175  

6.6.

 

Prepayments and Amendments

     175  

6.7.

 

Restricted Payments

     176  

6.8.

 

Accounting Methods

     177  

6.9.

 

Investments

     177  

6.10.

 

Transactions with Affiliates

     177  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

6.11.

 

Use of Proceeds

     178  

6.12.

 

Limitation on Issuance of Equity Interests

     178  

6.13.

 

Inventory with Bailees

     178  

6.14.

 

Canadian Employee Benefits

     178  

7.     FINANCIAL COVENANTS

     179  

8.     EVENTS OF DEFAULT

     179  

8.1.

 

Payments

     179  

8.2.

 

Covenants

     179  

8.3.

 

Judgments

     180  

8.4.

 

Voluntary Bankruptcy, etc.

     180  

8.5.

 

Involuntary Bankruptcy, etc.

     180  

8.6.

 

Default Under Other Agreements

     180  

8.7.

 

Representations, etc.

     180  

8.8.

 

Guaranty

     180  

8.9.

 

Security Documents

     181  

8.10.

 

Loan Documents

     181  

8.11.

 

Change of Control

     181  

8.12.

 

UK Insolvency

     181  

9.     RIGHTS AND REMEDIES

     181  

9.1.

 

Rights and Remedies

     181  

9.2.

 

Remedies Cumulative

     182  

10.    WAIVERS; INDEMNIFICATION

     182  

10.1.

 

Demand; Protest; etc.

     182  

10.2.

 

The Lender Group’s Liability for Collateral

     182  

10.3.

 

Indemnification

     182  

11.    NOTICES

     184  

12.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION

     185  

13.    ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

     186  

13.1.

 

Assignments and Participations

     186  

13.2.

 

Successors

     191  

14.    AMENDMENTS; WAIVERS

     191  

14.1.

 

Amendments and Waivers

     191  

14.2.

 

Replacement of Certain Lenders

     193  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

14.3.

 

No Waivers; Cumulative Remedies

     194  

15.    AGENT; THE LENDER GROUP

     194  

15.1.

 

Appointment and Authorization of Agent

     194  

15.2.

 

Delegation of Duties

     195  

15.3.

 

Liability of Agent

     195  

15.4.

 

Reliance by Agent

     196  

15.5.

 

Notice of Default or Event of Default

     196  

15.6.

 

Credit Decision

     197  

15.7.

 

Costs and Expenses; Indemnification

     197  

15.8.

 

Agent in Individual Capacity

     198  

15.9.

 

Successor Agent

     198  

15.10.

 

Lender in Individual Capacity

     199  

15.11.

 

Collateral Matters

     199  

15.12.

 

Restrictions on Actions by Lenders; Sharing of Payments

     201  

15.13.

 

Agency for Perfection

     202  

15.14.

 

Payments by Agent to the Lenders

     202  

15.15.

 

Concerning the Collateral and Related Loan Documents

     202  

15.16.

 

Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information

     202  

15.17.

 

Several Obligations; No Liability

     203  

15.18.

 

Joint Lead Arrangers, Joint Book Runners, Co-Syndication Agents, and Documentation Agents

     204  

15.19.

 

Appointment for the Province of Quebec

     204  

16.    WITHHOLDING TAXES

     205  

16.1.

 

Payments

     205  

16.2.

 

Exemptions

     206  

16.3.

 

Reductions

     208  

16.4.

 

Refunds

     208  

16.5.

 

UK Tax Gross-Up

     209  

16.6.

 

UK Tax Indemnity

     211  

16.7.

 

UK Tax Credit

     212  

16.8.

 

Lender Status Confirmation

     212  

16.9.

 

Stamp Taxes

     213  

16.10.

 

Value Added Tax

     213  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

17.    GENERAL PROVISIONS

     214  

17.1.

 

Effectiveness

     214  

17.2.

 

Section Headings

     214  

17.3.

 

Interpretation

     214  

17.4.

 

Severability of Provisions

     214  

17.5.

 

Bank Product Providers

     214  

17.6.

 

Debtor-Creditor Relationship

     215  

17.7.

 

Counterparts; Electronic Execution

     215  

17.8.

 

Revival and Reinstatement of Obligations; Certain Waivers

     215  

17.9.

 

Confidentiality

     216  

17.10.

 

Survival

     218  

17.11.

 

Patriot Act; Due Diligence

     218  

17.12.

 

Integration

     219  

17.13.

 

DNOW as Agent for Borrowers

     220  

17.14.

 

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     220  

17.15.

 

Judgment Currency

     221  

17.16.

 

No Setoff

     221  

17.17.

 

CAM Exchange

     221  

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

  

Form of Assignment and Acceptance

Exhibit B-1

  

Form of Borrowing Base Certificate

Exhibit B-2

  

Form of Bank Product Provider Agreement

Exhibit C-1

  

Form of Compliance Certificate

Exhibit L-1

  

Form of Non-Base Rate Notice

Exhibit J-1

  

Form of Joinder

Exhibit P-1

  

Form of Perfection Certificate

Schedule A-1

  

Agent’s Canadian Account

Schedule A-2

  

Agent’s UK Account

Schedule A-3

  

Agent’s US Account

Schedule A-4

  

Authorized Persons

Schedule C-1

  

Commitments

Schedule D-1

  

Canadian Designated Account

Schedule D-2

  

UK Designated Account

Schedule D-3

  

US Designated Account

Schedule E-1

  

Existing Letters of Credit

Schedule P-1

  

Permitted Investments

Schedule P-2

  

Permitted Liens

Schedule R-1

  

Real Property Collateral

Schedule 3.1

  

Conditions Precedent

Schedule 3.1A

  

UK Conditions Precedent

Schedule 3.6

  

Conditions Subsequent

Schedule 4.1(b)

  

Capitalization of Parent

Schedule 4.1(c)

  

Capitalization of Parent’s Subsidiaries

Schedule 4.1(d)

  

Subscriptions, Options, Warrants, Calls

Schedule 4.10(a)

  

Employee Benefits

Schedule 4.11

  

Environmental Matters

Schedule 4.14

  

Permitted Indebtedness

Schedule 4.25

  

Location of Inventory

Schedule 4.28

  

Material Contracts

Schedule 4.32

  

Immaterial Subsidiaries

Schedule 5.1

  

Financial Statements, Reports, Certificates

Schedule 5.2

  

Collateral Reporting

Schedule 6.5

  

Nature of Business

Schedule 6.10

  

Transactions with Affiliates

 

-vii-


CREDIT AGREEMENT

THIS CREDIT AGREEMENT, is entered into as of April 30, 2018 by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A. and ROYAL BANK OF CANADA, each as a joint lead arranger (in such capacity, together with its respective successors and assigns in such capacity, the “Joint Lead Arrangers”), WELLS FARGO BANK, NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A. and ROYAL BANK OF CANADA, each as a joint bookrunner (in such capacity, together with its respective successors and assigns in such capacity, the “Joint Book Runners”), JPMORGAN CHASE BANK, N.A. and ROYAL BANK OF CANADA, as co-syndication agents (in such capacity, together with their successors and assigns in such capacity, the “Co-Syndication Agents”), FIFTH THIRD BANK, as documentation agent (in such capacity, together with its successors and assigns in such capacity, the “Documentation Agent”), NOW Inc., a Delaware corporation (“Parent”), DNOW L.P., a Texas limited partnership (“DNOW” and, together with Parent and those additional entities that hereafter become parties hereto as US Borrowers, each a “US Borrower” and individually and collectively, jointly and severally, the “US Borrowers”), those additional entities that hereafter become parties hereto as US Borrowers in accordance with the terms hereof by executing the form of Joinder attached hereto as Exhibit J-1, DNOW Canada ULC, an Alberta unlimited liability corporation (“DNOWC”, and, together with those additional entities that hereafter become parties hereto as Canadian Borrowers, each a “Canadian Borrower” and individually and collectively, jointly and severally, the “Canadian Borrowers”), those additional entities that hereafter become parties hereto as Canadian Borrowers in accordance with the terms hereof by executing the form of Joinder attached hereto as Exhibit J-1, and those additional entities that hereafter become parties hereto as UK Borrowers in accordance with the terms hereof by executing the form of Joinder attached hereto as Exhibit J-1 (each a “UK Borrower” and individually and collectively, jointly and severally, the “UK Borrowers”; the UK Borrowers, together with the US Borrowers and the Canadian Borrowers are each a “Borrower” and individually and collectively, the “Borrowers”).

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1. Definitions. As used in this Agreement, the following terms shall have the following definitions:

Acceptable Appraisal” means, with respect to an appraisal of Inventory, the most recent appraisal of such property received by Agent (a) from an appraisal company satisfactory to Agent, (b) the scope and methodology of which are satisfactory to Agent, and (c) the results of which are satisfactory to Agent, in each case, in Agent’s Permitted Discretion.

 

-1-


Account” means an account (as that term is defined in the Code or, to the extent applicable, the PPSA).

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

Account Party” has the meaning specified therefor in Section 2.11A(h) of this Agreement.

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).

Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity Interests are acquired by a Loan Party or any of its Subsidiaries in a Permitted Acquisition; provided, that such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition.

Acquisition” means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or all or substantially all of any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, amalgamation, consolidation, or otherwise) by a Person or its Subsidiaries of all of the Equity Interests of any other Person.

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

Administrative Borrower” has the meaning specified therefor in Section 17.13 of this Agreement.

Administrative Questionnaire” has the meaning specified therefor in Section 13.1(a) of this Agreement.

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

Affiliate” means (a) as to any Borrower or any Subsidiary thereof, (i) any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person, or (ii) any other Person owning beneficially or controlling twenty percent (20%) or more of the equity interests in such Person, and (b) as to any other Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person (which includes, for the avoidance of doubt, in each case, any such Person that becomes an Affiliate after the date hereof). The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct

 

-2-


or cause the direction of the management and policies of a Person, whether through ownership of voting securities or other equity interests, by contract or otherwise. For purposes of the foregoing clause (b), a Person shall be deemed to control another Person if the controlling Person owns ten percent (10%) or more of any class of voting securities (or other ownership interests) of the controlled Person.

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

Agent’s Applicable Account” means Agent’s UK Account, Agent’s US Account and/or Agent’s Canadian Account, as the context requires.

Agent’s Canadian Account” means the Deposit Account identified on Schedule A-1 to this Agreement as Agent’s Canadian Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

Agent’s UK Account” means the Deposit Account identified on Schedule A-2 to this Agreement as Agent’s UK Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

Agent’s US Account” means the Deposit Account identified on Schedule A-3 to this Agreement as Agent’s US Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

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

Agent’s Liens” means the Liens granted by each Loan Party or its Subsidiaries to Agent under the Loan Documents and securing all or a portion of the Obligations.

Aggregate Excess Availability” means (a) the Line Cap, minus (b) the sum of Canadian Revolver Usage plus UK Revolver Usage plus US Revolver Usage; provided, however, that no more than 50% of Aggregate Excess Availability shall be attributable to Canadian Availability and UK Availability.

Agreed Currency” means (a) Dollars, (b) Canadian Dollars, (c) Sterling and (d) such other currency as the Agent and Lenders may agree.

Agreed L/C Currency” means (a) Dollars, (b) United Arab Emirates Dirham and (c) such other currency as the Agent, Lenders and US Issuing Lenders may agree.

Agreement” means this Credit Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business and includes Canadian Anti-Money Laundering & Anti-Terrorism Legislation.

 

-3-


Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto and includes Canadian Anti-Money Laundering & Anti-Terrorism Legislation.

Applicable Currency” means Dollars; provided, that (a) with respect to Canadian Revolving Loans and other Obligations denominated in Canadian Dollars, Applicable Currency means Canadian Dollars and (b) with respect to UK Revolving Loans and other Obligations denominated in Sterling, Applicable Currency means Sterling.

Applicable Margin” means, as of any date of determination and with respect to Base Rate Loans or Non-Base Rate Loans, as applicable, the applicable margin set forth in the following table that corresponds to the Fixed Charge Coverage Ratio and, where applicable, Leverage Ratio, of Borrowers for the most recently completed quarter; provided, that for the period from the Closing Date through and including September 30, 2018, the Applicable Margin shall be set at the margin in the row styled “Level III”; provided further, that any time an Event of Default has occurred and is continuing, the Applicable Margin may, at the direction of the Required Lenders, be set at the margin in the row styled “Level IV”:

 

Level

  

Fixed Charge Coverage Ratio

and, where applicable,

Leverage Ratio

  

Applicable Margin for

Base Rate Loans (the

“Base Rate Margin”)

  

Applicable Margin for Non-

Base Rate Loans (the “Non-

Base Rate Margin”)

I    Fixed Charge Coverage Ratio > 2.50:1.00 and Leverage Ratio < 3.00:1.00    0.25 percentage points    1.25 percentage points
II    Fixed Charge Coverage Ratio > 2.50:1.00 and Leverage Ratio ³ 3.00:1.00    0.50 percentage points    1.50 percentage points
III    Fixed Charge Coverage Ratio < 2.50:1.00 and > 1.50:1.00    0.75 percentage points    1.75 percentage points
IV    Fixed Charge Coverage Ratio < 1.50:1.00    1.00 percentage points    2.00 percentage points

Except as set forth in the foregoing proviso, the Applicable Margin shall be based upon the most recent Fixed Charge Coverage Ratio and, where applicable, Leverage Ratio calculation, which will be calculated as of the end of each fiscal quarter. Except as set forth in the foregoing proviso, the Applicable Margin shall be re-determined quarterly on the first day of the month following the date of delivery to Agent of the certified calculation of the Fixed Charge Coverage Ratio and, where applicable, the Leverage Ratio, in each case pursuant to Section 5.1 of the Agreement; provided, that if Borrower fails to provide such certification when such certification is due, the Applicable Margin shall be set at the margin in the row styled “Level IV” as of the first day of the month following the date on which the certification was required to be delivered until the date on which such certification is delivered (on which date (but not retroactively), without constituting a waiver of any Default or Event of Default occasioned by the failure to timely deliver such certification, the Applicable Margin shall be set at the margin based upon the calculations disclosed by such certification. In the event that the information

 

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regarding the Fixed Charge Coverage Ratio and, where applicable, Leverage Ratio contained in any certificate delivered pursuant to Section 5.1 of the Agreement is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin actually applied for such Applicable Period, then (i) Parent shall immediately deliver to Agent a correct certificate for such Applicable Period, (ii) the Applicable Margin shall be determined as if the correct Applicable Margin (as set forth in the table above) were applicable for such Applicable Period, and (iii) Borrowers shall immediately deliver to Agent full payment in respect of the accrued additional interest as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by Agent to the affected Obligations.

Applicable Unused Line Fee Percentage” means, as of any date of determination, the applicable percentage set forth in the following table that corresponds to the Average Revolver Usage of Borrowers for the most recently completed quarter as determined by Agent in its Permitted Discretion; provided, that for the period from the Closing Date through and including September 30, 2018, the Applicable Unused Line Fee Percentage shall be set at the rate in the row styled “Level II”; provided further, that any time an Event of Default has occurred and is continuing, the Applicable Unused Line Fee Percentage shall be set at the margin in the row styled “Level II”:

 

Level

  

Average Revolver Usage

  

Applicable Unused Line

Fee Percentage

I    > 40% of the Maximum Revolver Amount    0.250 percentage points
II    £ 40% of the Maximum Revolver Amount    0.375 percentage points

The Applicable Unused Line Fee Percentage shall be re-determined on the first date of each quarter by Agent.

Application Event” means the occurrence and continuation 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 or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of this Agreement.

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

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

Authorized Person” means any one of the individuals identified as an officer of a Borrower on Schedule A-4 to this Agreement, or any other individual identified by Administrative Borrower as an authorized person and authenticated through Agent’s electronic platform or portal in accordance with its procedures for such authentication.

 

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Available Increase Amount” means, as of any date of determination, an amount equal to the result of (a) $250,000,000, minus (b) the aggregate principal amount of Increases to the Revolver Commitments previously made pursuant to Section 2.14 of this Agreement.

Average Canadian Revolver Usage” means, with respect to any period, the sum of the aggregate amount of Canadian Revolver Usage for each day in such period (calculated as of the end of each respective day) divided by the number of days in such period.

Average Revolver Usage” means, with respect to any period, the sum of the Average Canadian Revolver Usage plus the Average UK Revolver Usage plus the Average US Revolver Usage.

Average UK Revolver Usage” means, with respect to any period, the sum of the aggregate amount of UK Revolver Usage for each day in such period (calculated as of the end of each respective day) divided by the number of days in such period.

Average US Revolver Usage” means, with respect to any period, the sum of the aggregate amount of US Revolver Usage for each day in such period (calculated as of the end of each respective day) divided by the number of days in such period.

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

Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

Bank Product Agreements” means the US Bank Product Agreements, the Canadian Bank Product Agreements and/or the UK Bank Product Agreements, as the context requires.

Bank Product Collateralization” means, with respect to the US Bank Product Obligations, the Canadian Bank Product Obligations or the UK Bank Product Obligations, as applicable, providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) in the Applicable Currency to be held by Agent for the benefit of the Bank Product Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure, operational risk or processing risk with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

Bank Product Obligations” means the US Bank Product Obligations, the Canadian Bank Product Obligations and/or the UK Bank Product Obligations, as the context requires.

 

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Bank Product Provider” means any Lender or any of its Affiliates, including each of the foregoing in its capacity, if applicable, as a Hedge Provider; provided, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a Bank Product Provider with respect to a Bank Product unless and until Agent receives a Bank Product Provider Agreement from such Person (a) on or prior to the Closing Date (or such later date as Agent shall agree to in writing in its sole discretion) with respect to Bank Products provided on or prior to the Closing Date, or (b) on or prior to the date that is 10 days after the provision of such Bank Product to a Loan Party or its Subsidiaries (or such later date as Agent shall agree to in writing in its sole discretion) with respect to Bank Products provided after the Closing Date; provided further, that if, at any time, a Lender ceases to be a Lender under this Agreement (prior to the payment in full of the Obligations), then, from and after the date on which it so ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the obligations with respect to Bank Products provided by such former Lender or any of its Affiliates shall no longer constitute Bank Product Obligations.

Bank Product Provider Agreement” means an agreement in substantially the form attached hereto as Exhibit B-2 to this Agreement, in form and substance satisfactory to Agent, duly executed by the applicable Bank Product Provider, the applicable Loan Parties, and Agent.

Bank Product Reserves” means the US Bank Product Reserves, the Canadian Bank Product Reserves and/or the UK Bank Product Reserves, as the context requires.

Bank Products” means US Bank Products, Canadian Bank Products and/or UK Bank Products, as the context requires.

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

Base Rate” means the US Base Rate; provided, that (a) with respect to Canadian Obligations denominated in Canadian Dollars, Base Rate means the Canadian Base Rate and (b) with respect to UK Obligations denominated in Sterling, Base Rate means the UK Floating Rate.

Base Rate Loan” means each portion of the Revolving Loans that bears interest at a rate determined by reference to the applicable Base Rate.

Base Rate Margin” has the meaning set forth in the definition of Applicable Margin.

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

Blocked Account Control Agreement” has the meaning assigned to such term in any UK Security Document.

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).

Board of Governors” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

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Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble to this Agreement.

Borrower Materials” has the meaning specified therefor in Section 17.9(c) of this Agreement.

Borrowing” means a US Borrowing, a Canadian Borrowing and/or a UK Borrowing, as the context requires.

Borrowing Base Certificate” means a certificate substantially in the form of Exhibit B-1.

Borrower DTTP Filing” means an HM Revenue & Customs’ Form DTTP2 duly completed and filed by the relevant UK Borrower, which:

(a) where it relates to a Treaty Lender that is a Lender on the Closing Date, contains the scheme reference number and jurisdiction of tax residence of that Lender; and

(i) where the applicable UK Borrower is a Borrower as at the date on which that Treaty Lender becomes a party to this Agreement as a Lender, is filed with HM Revenue & Customs within 30 days of that date; or

(ii) where the UK Borrower is not a Borrower as at the date on which that Treaty Lender becomes a party to this Agreement as a Lender, is filed with HM Revenue & Customs within 30 days of the date on which that UK Borrower becomes a Borrower; or

(b) where it relates to a Treaty Lender that is not a Lender on the Closing Date, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the Assignment and Acceptance which it executes on becoming a party to this Agreement as a Lender; and

(i) where the applicable UK Borrower is a Borrower as at the date on which that Treaty Lender becomes a party to this Agreement as a Lender, is filed with HM Revenue & Customs within 30 days of that date; or

(ii) where the UK Borrower is not a Borrower as at the date on which that Treaty Lender becomes a party to this Agreement as a Lender, is filed with HM Revenue & Customs within 30 days of the date on which that UK Borrower becomes a Borrower.

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 or Georgia, except that (a) if a determination of a Business Day shall relate to a Non-Base Rate Loan, the term “Business Day” also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market, (b) if a determination of a Business Day shall relate to a Canadian Revolving Loan or Canadian Letter of Credit (including a request therefor), the term “Business Day” also shall exclude any day on which banks are authorized or required to close in Toronto, Ontario, or Calgary, Alberta, Canada and (c) if a determination of a Business Day shall relate to a UK Revolving Loan or UK Letter of Credit (including a request therefor), the term “Business Day” also shall exclude any day on which banks in the United Kingdom are closed for the purposes of making wire transfers or any other electronic transfer of funds.

 

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CAM Exchange” means the exchange of the Lenders’ interests provided for in Section 17.17.

CAM Exchange Date” means the date on which any event referred to in Section 8.4 or Section 8.5 or Section 8.12 shall occur in respect of any Borrower, the date on which the Loans are accelerated in accordance with Section 9.1, or the Maturity Date (unless the Obligations are paid in full on the Maturity Date).

CAM Percentage” means, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the aggregate Dollar Equivalent of the Obligations owed to such Lender (whether or not at the time due and payable) and such Lender’s participations in undrawn amounts of Letters of Credit immediately prior to the CAM Exchange Date and (b) the denominator shall be the aggregate Dollar Equivalent (as so determined) of the Obligations owed to all the Lenders (whether or not at the time due and payable) and the aggregate undrawn amount of all Letters of Credit immediately prior to the CAM Exchange Date.

Canadian Availability” means, as of any date of determination, the Dollar Equivalent amount that Canadian Borrowers are entitled to borrow as Canadian Revolving Loans under Section 2.1(b) of the Agreement (after giving effect to the then outstanding Canadian Revolver Usage, UK Revolver Usage and US Revolver Usage).

Canadian Anti-Money Laundering & Anti-Terrorism Legislation” means Part II.1 of the Criminal Code, R.S.C. 1985, c. C-46, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 and the United Nations Act, R.S.C. 1985, c.U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act.

Canadian Bank Product” means any one or more of the following financial products or accommodations extended to a Canadian Loan Party by a Bank Product Provider: (a) credit cards (including commercial credit cards (including so-called “purchase cards”, “procurement cards” or “P-cards”)), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

Canadian Bank Product Agreements” means those agreements entered into from time to time by a Canadian Loan Party with a Bank Product Provider in connection with the obtaining of any of the Canadian Bank Products.

Canadian Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by Canadian Loan Parties to any Bank Product Provider pursuant to or evidenced by a Canadian Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all Canadian Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product

 

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Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Canadian Bank Products provided by such Bank Product Provider to Canadian Loan Parties; provided, in order for any item described in clauses (a), (b), or (c) above, as applicable, to constitute “Canadian Bank Product Obligations”, if the applicable Bank Product Provider is any Person other than Wells Fargo or its Affiliates, then the applicable Canadian Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Agreement within 10 days after the date of the provision of the applicable Canadian Bank Product to a Canadian Loan Party.

Canadian Bank Product Reserves” means, as of any date of determination, those reserves, without duplication of any other reserve, that Agent deems necessary or appropriate in its Permitted Discretion to establish (based upon the Bank Product Providers’ reasonable determination of the liabilities and obligations of Canadian Loan Parties in respect of Canadian Bank Product Obligations) in respect of Canadian Bank Products then provided or outstanding.

Canadian Base Rate” means, for any day, a rate per annum equal to the greater of (a) the CDOR Rate existing on such day (which rate shall be calculated based upon an Interest Period of 1 month), plus 1 percentage point, and (b) the “prime rate” for Canadian Dollar commercial loans made in Canada as reported by Thomson Reuters under Reuters Instrument Code <CAPRIME=> on the “CA Prime Rate (Domestic Interest Rate) – Composite Display” page (or any successor page or such other commercially available service or source (including the Canadian Dollar “prime rate” announced by a Schedule I bank under the Bank Act (Canada)) as the Agent may designate from time to time). Each determination of the Canadian Base Rate shall be made by the Agent and shall be conclusive in the absence of manifest error.

Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, providing material employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, retirement or savings benefits, under which a Canadian Loan Party or any other Subsidiary of any Borrower organized under the laws of Canada or any territory or province thereof has any liability with respect to any employee or former employee based in Canada. For the avoidance of doubt, “Canadian Benefit Plan” excludes any Canadian Pension Plan.

Canadian Borrowers” has the meaning specified therefor in the preamble to the Agreement.

Canadian Borrowing” means a borrowing consisting of Canadian Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by Canadian Swing Lender in the case of a Canadian Swing Loan, or by Agent in the case of a Canadian Extraordinary Advance.

Canadian Borrowing Base” means, as of any date of determination, the Dollar Equivalent amount of:

(a) 90% of the amount of Eligible Accounts of each Canadian Loan Party owing by Account Debtors that are rated (or whose parent is rated) Baa3 or higher from Moody’s or BBB- or higher from S&P, less the amount, if any, of the Canadian Dilution Reserve attributable to such Eligible Accounts, plus

 

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(b) 85% of the amount of Eligible Accounts of each Canadian Loan Party owing by Account Debtors other than those described in the foregoing clause (a), less the amount, if any, of the Canadian Dilution Reserve attributable to such Eligible Accounts, plus

(c) the lesser of (i) the product of 70% multiplied by the value (calculated at the lower of cost or market on a basis consistent with Canadian Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each Canadian Loan Party at such time, and (ii) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Acceptable Appraisal of Inventory, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Canadian Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each Canadian Loan Party (such determination may be made as to different categories of Eligible Finished Goods Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

(d) the amount by which the US Borrowing Base at such time exceeds the sum of US Revolver Usage plus UK Revolver Usage predicated on clause (d) of the definition of UK Borrowing Base at such time, minus

(e) without duplication, the aggregate amount of Receivables Reserves, Bank Product Reserves, Inventory Reserves, Canadian Priority Payables Reserves and other Reserves, in each case if any, established by Agent from time to time under Section 2.1(e) of this Agreement.

Canadian Copyright Security Agreement” has the meaning specified therefor in the Canadian Security Agreement.

Canadian Defined Benefit Plan” means any Canadian Pension Plan which contains a “defined benefit provision” as defined in subsection 147.1(1) of the Income Tax Act (Canada).

Canadian Designated Account” means the Canadian Deposit Account of DNOWC identified on Schedule D-1 to the Agreement (or such other Deposit Account of a Canadian Borrower located at Canadian Designated Account Bank that has been designated as such, in writing, by a Canadian Borrower to Agent).

Canadian Designated Account Bank” has the meaning specified therefor in Schedule D-1 to the Agreement (or such other bank that is located within Canada that has been designated as such, in writing, by a Canadian Borrower to Agent).

Canadian Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior 12 months, that is the result of dividing (a) the Dollar Equivalent amount of bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Canadian Borrowers’ Accounts during such period, by (b) the Dollar Equivalent amount of Canadian Borrowers’ billings with respect to Accounts during such period.

 

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Canadian Dilution Reserve” means, as of any date of determination, an amount, without duplication of any other reserve, sufficient to reduce the advance rate against Eligible Accounts of Canadian Loan Parties by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

Canadian Dollar Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in Canadian Dollars as reasonably determined by Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date as reasonably determined by Agent) for the purchase of Canadian Dollars with Dollars.

Canadian Dollars” or “Cdn$” means the lawful currency of Canada, as in effect from time to time.

Canadian Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of the Agreement.

Canadian Guarantor” means (a) each Subsidiary of Parent (other than an Immaterial Subsidiary) organized under the laws of Canada, or any province or territory thereof, that is or becomes a guarantor of all or any part of the Foreign Obligations and (b) each other Person that guaranties all or a part of the Foreign Obligations pursuant to the Canadian Security Agreement.

Canadian Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of any Canadian Loan Party arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

Canadian Issuing Lender” means Wells Fargo, WF Canada and up to three other Lenders designated in writing to, and consented to by, the Agent (such consent not to be unreasonably withheld, conditioned or delayed) by the Administrative Borrower that agree, in such Lender’s sole discretion, to become a Canadian Issuing Lender for the purpose of issuing Canadian Letters of Credit or, if WF Canada is the Canadian Issuing Lender, issuing Canadian Reimbursement Undertakings pursuant to Section 2.11B of the Agreement and Canadian Issuing Lender shall be a Lender. For the avoidance of doubt, no Canadian Issuing Lender other than WF Canada may issue a Canadian Reimbursement Undertaking without Agent’s prior written consent.

Canadian Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by Canadian Issuing Lender or Canadian Underlying Issuer for the account of Canadian Borrower.

Canadian Letter of Credit Disbursement” means a payment made by Canadian Issuing Lender pursuant to a Canadian Letter of Credit or a Canadian Reimbursement Undertaking.

Canadian Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Canadian Letter of Credit Usage on such date (including such Lender’s Pro Rata Share of Canadian Reimbursement Undertakings on such date).

 

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Canadian Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding Canadian Letters of Credit.

Canadian Loan Account” has the meaning specified therefor in Section 2.9 of the Agreement.

Canadian Loan Party” means any Canadian Borrower or any Canadian Guarantor organized under the laws of Canada or any province or territory thereof.

Canadian Maximum Revolver Amount” means $100,000,000, decreased by the amount of reductions in the Canadian Revolver Commitments made in accordance with Section 2.4(c) of the Agreement.

Canadian Obligations” means (a) all loans (including Canadian Revolving Loans (inclusive of Canadian Extraordinary Advances and Canadian Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities (including all amounts charged to the Canadian Loan Account pursuant to the Agreement), obligations (including indemnification obligations) of any Canadian Loan Party, fees (including the fees provided for in the Fee Letter) of any Canadian Loan Party, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) of any Canadian Loan Party, guaranties of any Canadian Loan Party, and all covenants and duties of any other kind and description owing by any Canadian Loan Party arising out of, under, pursuant to, in connection with, or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Canadian Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, (b) all debts, liabilities, or obligations (including reimbursement and indemnification obligations, irrespective of whether contingent) owing by any Canadian Borrower or any other Canadian Loan Party to Canadian Issuing Lender now or hereafter arising from or in respect of a Canadian Letters of Credit, and (c) all Canadian Bank Product Obligations; provided, that Canadian Obligations shall not include Excluded Swap Obligations. Without limiting the generality of the foregoing, the Canadian Obligations under the Loan Documents include the obligation to pay (i) the principal of the Canadian Revolving Loans, (ii) interest accrued on the Canadian Revolving Loans, (iii) the amount necessary to reimburse Canadian Issuing Lender for amounts paid or payable pursuant to Canadian Letters of Credit, (iv) Letter of Credit commissions, charges, expenses, and fees, in each case in respect of Canadian Letters of Credit (v) Lender Group Expenses of any Canadian Loan Party, (vi) fees payable by any Canadian Loan Party under the Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any Canadian Loan Party under any Loan Document (excluding Excluded Swap Obligations). Any reference in the Agreement or in the Loan Documents to the Canadian Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

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Canadian Overadvance” means, as of any date of determination, that the Canadian Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11B.

Canadian Patent Security Agreement” has the meaning specified therefor in the Canadian Security Agreement.

Canadian Pension Plans” means each pension plan that is a “registered pension plan” (as defined in the Income Tax Act (Canada)) or that is required to be registered under, or is subject to, the Employment Pension Plans Act (Alberta) or other Canadian federal or provincial law with respect to pension benefit standards and that is maintained or contributed to, or to which there is or may be an obligation to contribute by a Loan Party or a Subsidiary thereof, for its employees or former employees, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.

Canadian Priority Payables Reserves” means reserves (determined from time to time by Agent in its Permitted Discretion) for (but without duplication of any other reserve): (a) the amount past due and owing by any Canadian Loan Party, or the accrued amount for which such Canadian Loan Party has an obligation to remit, to a Governmental Authority or other Person pursuant to any applicable law, rule or regulation, in respect of (i) goods and services taxes, harmonized sales taxes, other sales taxes, employee income taxes, municipal taxes and other taxes payable or to be remitted or withheld; (ii) workers’ compensation or employment insurance; (iii) federal Canada Pension Plan and Quebec Pension Plan contributions; (iv) vacation or holiday pay; and (v) other like charges and demands, in each case, to the extent that any Governmental Authority or other Person may claim a Lien, trust, deemed trust or other claim ranking or capable of ranking in priority to or pari passu with one or more of the Liens granted in the Loan Documents; and (b) the aggregate amount of any other liabilities of any Canadian Loan Party (i) in respect of which a Lien, trust or deemed trust has been or may be imposed on any Collateral to provide for payment, or (ii) in respect of unpaid or unremitted pension plan contributions, including normal cost contributions, special payments and, without duplication, amounts representing any unfunded liability, solvency deficiency or wind-up deficiency whether or not due with respect to any Canadian Pension Plan, or (iii) which are secured by a Lien, right or claim on any Collateral (other than Permitted Liens that do not have priority over Agent’s Liens); in each case, pursuant to any applicable law, rule or regulation and which such Lien, trust, deemed trust, right or claim ranks or, in the Permitted Discretion of Agent, is capable of ranking in priority to or pari passu with one or more of the Liens granted in the Loan Documents (such as claims by employees for unpaid wages and other amounts payable under the Wage Earner Protection Act (Canada)); in each case net of the aggregate amount of all restricted cash held or set aside by such Canadian Loan Party for the payment of such obligations.

Canadian Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of the Agreement.

 

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Canadian Reimbursement Undertaking” has the meaning specified therefor in Section 2.11B(a) of the Agreement.

Canadian Revolver Commitment” means, with respect to each Revolving Lender, its Canadian Revolver Commitment, and, with respect to all Revolving Lenders, their Canadian Revolver Commitments, in each case as set forth beside such Revolving Lender’s name under the applicable heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

Canadian Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding Canadian Revolving Loans (inclusive of Canadian Swing Loans and Canadian Protective Advances), plus (b) the amount of the Canadian Letter of Credit Usage.

Canadian Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Canadian Revolver Commitments, the amount of such Lender’s Canadian Revolver Commitment, and (b) after the termination of the Canadian Revolver Commitments, the aggregate outstanding principal amount of the Canadian Revolving Loans of such Lender.

Canadian Revolving Loans” has the meaning specified therefor in Section 2.1(b) of the Agreement.

Canadian Security Agreement” means a Guarantee and Security Agreement dated as of even date with the Agreement, by and among each Canadian Loan Party and Agent.

Canadian Security Documents” means the Canadian Security Agreement and any other Loan Document that grants or purports to grant a Lien on any of the assets or interests, and the proceeds thereof, of any Canadian Loan Party.

Canadian Subagent” has the meaning specified therefor in Section 15.2 of the Agreement.

Canadian Swing Lender” means WF Canada or any other Lender that, at the request of a Canadian Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Canadian Swing Lender under Section 2.3(b) of the Agreement.

Canadian Swing Loan” has the meaning specified therefor in Section 2.3(b) of the Agreement.

Canadian Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Canadian Swing Loans on such date.

Canadian Trademark Security Agreement” has the meaning specified therefor in the Canadian Security Agreement.

 

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Canadian Underlying Issuer” means The Toronto-Dominion Bank or one of its Affiliates or such other Person that is acceptable to Agent in its Permitted Discretion.

Capital Expenditures” means, with respect to any Person for any period, the amount 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, but excluding, without duplication (a) with respect to the purchase price of assets that are purchased substantially contemporaneously with the trade-in of existing assets during such period, the amount that the gross amount of such purchase price is reduced by the credit granted by the seller of such assets for the assets being traded in at such time, and (c) expenditures made during such period to consummate one or more Permitted Acquisitions.

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

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

Cash Dominion Period” has the meaning ascribed thereto in the US Security Agreement.

Cash Equivalents” means (a) Domestic Cash Equivalents; and (b) Foreign Cash Equivalents.

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 customary cash management arrangements.

CDOR Rate” means the average rate per annum as reported on the Reuters Screen CDOR Page (or any successor page or such other page or commercially available service displaying Canadian interbank bid rates for Canadian Dollar bankers’ acceptances as the Agent may designate from time to time, or if no such substitute service is available, the rate quoted by a Schedule I bank under the Bank Act (Canada) selected by the Agent at which such bank is offering to purchase Canadian Dollar bankers’ acceptances) as of 10:00 a.m. Eastern (Toronto) time on the date of commencement of the requested Interest Period, for a term, and in an amount, comparable to the Interest Period and the amount of the applicable Non-Base Rate Loan requested (whether as an initial Non-Base Rate Loan or as a continuation of a Non-Base Rate Loan or as a conversion of a Canadian Base Rate Loan to a Non-Base Rate Loan) by Canadian Borrowers in accordance with this Agreement (and, if any such reported rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero). Each determination of the CDOR Rate shall be made by the Agent and shall be conclusive in the absence of manifest error.

 

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CFC” means a controlled foreign corporation (as that term is defined in the IRC) in which any Loan Party is a “United States shareholder” within the meaning of Section 951(b) of the IRC.

Change of Control” means that:

(a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or indirectly, of securities of Parent (or other securities convertible into such securities) representing 35% or more of the combined voting power of all outstanding securities of Parent entitled to vote in the election of directors, other than securities having such power only by reason of the happening of a contingency, or

(b) except as otherwise expressly permitted under this Agreement with respect to Guarantors, Parent fails to own and control, directly or indirectly, 100% of the Equity Interests of each other Loan Party.

Change in Law” means the occurrence after the date of this Agreement of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, decree, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, decree, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided, that notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

Closing Date” means the date of the making of the initial Revolving Loan (or other extension of credit) under this Agreement.

Co-Syndication Agents” has the meaning set forth in the preamble to this Agreement.

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

Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by any Loan Party 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; provided that Collateral shall not include Excluded Collateral.

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

 

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Collection Account” means with respect to the UK Loan Parties, each deposit account maintained by such UK Loan Party into which all cash, checks or other similar payments relating to or constituting payments made in respect of Accounts will be deposited.

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 Revolver Commitment and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C-1 to this Agreement or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of this Agreement.

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

Competitor” means those Persons who are direct competitors of the Borrowers if, at the time of a proposed assignment, Agent and the assigning Lender have actual knowledge (which knowledge can be obtained by a written notification by the Borrowers) that such Person is a direct competitor of Borrowers; provided, that “Competitors” shall exclude any Person that Administrative Borrower has designated as no longer being a “Competitor” by written notice delivered to Agent from time to time; provided further, that in connection with any assignment or participation, the Assignee or Participant with respect to such proposed assignment or participation that is an investment bank, a commercial bank, a finance company, a fund, or other Person which merely has an economic interest in any such direct competitor, and is not itself such a direct competitor of Borrowers, shall not be deemed to be a Competitor for the purposes of this definition.

Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 to this Agreement delivered by the chief financial officer or treasurer of Parent to Agent.

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

Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by a Loan Party 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) and includes, without limitation, any Blocked Account Agreement and any Blocked Account Control Agreement.

Contribution Notice” means a contribution notice issued by the Pensions Regulator under section 38 or section 47 of the Pensions Act 2004 (UK).

 

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Covenant Testing Period” means a period (a) commencing on the last day of the fiscal quarter of Parent most recently ended prior to a Covenant Trigger Event for which Borrowers are required to deliver to Agent quarterly or annual financial statements pursuant to Schedule 5.1 to this Agreement, and (b) continuing through and including the first day after such Covenant Trigger Event that Aggregate Excess Availability has equaled or exceeded the greater of (i) 12.5% of the Line Cap, and (ii) $60,000,000 for 30 consecutive days.

Covenant Trigger Event” means if at any time Aggregate Excess Availability is less than the greater of (i) 12.5% of the Line Cap, and (ii) $60,000,000.

CTA” means the Corporation Tax Act 2009 (UK).

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.

Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies Agent and Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to Agent, any Issuing Lender, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified any Borrower, Agent an Issuing Lender in writing that it does not intend to satisfy any obligation referred to in clause (a) above or under agreements in which it commits to extend credit generally, or has made a public statement to the effect of either of the foregoing (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by Agent or Administrative Borrower, to confirm in writing to Agent and Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided, that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Agent and Administrative Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of any Insolvency Proceeding, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided, that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to Administrative Borrower, each Issuing Lender, and each Lender.

 

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Defaulting Lender Rate” means (a) with respect to US Obligations, (i) for the first three days from and after the date the relevant payment is due, the US Base Rate, and (ii) thereafter, the interest rate then applicable to US Revolving Loans that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto), (b) with respect to Canadian Obligations, (i) for the first three days from and after the date the relevant payment is due, the Canadian Base Rate (if such Canadian Obligations are denominated in Canadian Dollars) or the US Base Rate (if such Canadian Obligations are denominated in Dollars), and (ii) thereafter, the interest rate then applicable to Canadian Revolving Loans that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto) and (c) with respect to UK Obligations, (i) for the first 3 days from and after the date the relevant payment is due, the UK Floating Rate (in the Applicable Currency), and (ii) thereafter, the interest rate then applicable to UK Revolving Loans that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

Deposit Account” means any deposit account (as that term is defined in the Code).

Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash (other than Pass-Through Tax Liabilities), or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Maturity Date unless in the case of clause (b) and (c) above, the right to receive the applicable consideration is contingent upon the Obligations having been paid in full.

Disregarded Domestic Person” means any direct or indirect Domestic Subsidiary that is treated as a disregarded entity for U.S. federal income tax purposes, if it holds no material assets other than the equity of one or more direct or indirect Foreign Subsidiaries that are CFCs or other Disregarded Domestic Persons.

Documentation Agent” has the meaning set forth in the preamble to this Agreement.

Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in another currency, the equivalent amount thereof in Dollars as determined by Agent, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date determined by Agent) for the purchase of Dollars with such currency.

 

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Dollars” or “$” means United States dollars.

Domestic 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 one 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 one 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 one 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 $1,000,000,000, (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 $1,000,000,000, 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.

Domestic Subsidiary” means any Subsidiary of any Loan Party that is not a Foreign Subsidiary.

Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit, including by electronic transmission such as SWIFT, electronic mail, facsimile or computer generated communication.

Earn-Outs” means unsecured liabilities of a Loan Party arising under an agreement to make any deferred payment as a part of the purchase price for a Permitted Acquisition, including performance bonuses or consulting payments in any related services, employment or similar agreement, in an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of the target of such Permitted Acquisition.

EBITDA” means, with respect to any fiscal period and with respect to Parent determined, in each case, on a consolidated basis in accordance with GAAP:

 

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(a) the consolidated net income (or loss),

minus

(b) without duplication, the sum of the following amounts for such period to the extent included in determining consolidated net income (or loss) for such period:

(i) any extraordinary, unusual, or non-recurring non-cash gains; provided, that if any such non-cash gains referred to in this clause represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be included in EBITDA to such extent,

(ii) interest income,

(iii) the amount of any non-controlling interest income consisting of losses attributed to non-controlling interests of third parties in any non-wholly owned Subsidiaries of Parent to the extent included in consolidated net income (or loss) and not received in cash by Parent,

(iv) unrealized or realized non-cash gains in respect of obligations under hedging transactions, and non-cash gains resulting from currency translation or non-cash transaction gains related to currency re-measurements of Indebtedness, and all other foreign currency translation or transaction non-cash gains,

(v) expenses or charges arising from the sale or issuance of Equity Interests, the granting of stock options, and the granting of stock appreciation rights and similar arrangements (including any repricing, amendment, modification, substitution, or change of any such Equity Interests, stock option, stock appreciation rights, or similar arrangements) but only to the extent that such expenses or charges are funded with cash proceeds contributed to the capital of Parent or an issuance of capital stock of Parent,

(vi) federal, state, provincial and local income tax credits,

(vii) non-cash gains on sales of fixed assets or discontinued or disposed of operations, and

(viii) income arising by reason of the application of FAS 141R,

(ix) non-operating income, and

(x) income tax benefits and decreases in any change in LIFO reserves,

plus

(c) without duplication, the sum of the following amounts for such period to the extent included in determining consolidated net income (or loss) for such period:

 

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(i) any extraordinary, unusual, or non-recurring non-cash losses; provided, that if any such non-cash losses referred to in this clause represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be deducted from EBITDA to such extent,

(ii) Interest Expense,

(iii) tax expense based on income, profits or capital, including federal, foreign, state, provincial franchise and similar taxes (and for the avoidance of doubt, specifically excluding any sales taxes or any other taxes held in trust for a Governmental Authority),

(iv) depreciation and amortization for such period (including (x) accelerated depreciation and amortization from the write-off or write-down of tangible or intangible assets (other than the write-off or write-down of current assets) and (y) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, bridge, commitment and other financing fees, discounts and yield),

(v) with respect to any Permitted Acquisition after the Closing Date, costs, fees, charges, or expenses consisting of out-of-pocket expenses owed by the Loan Parties or any of their Subsidiaries to any Person for services performed by such Person in connection with such Permitted Acquisition incurred within 365 days of the consummation of such Permitted Acquisition,

(vi) with respect to any Permitted Acquisitions after the Closing Date: (1) purchase accounting adjustments, including, without limitation, a dollar for dollar adjustment for that portion of revenue that would have been recorded in the relevant period had the balance of deferred revenue (unearned income) recorded on the closing balance sheet and before application of purchase accounting not been adjusted downward to fair value to be recorded on the opening balance sheet in accordance with GAAP purchase accounting rules; and (2) non-cash adjustments in accordance with GAAP purchase accounting rules under FASB Statement No. 141, ASC 805 or EITF Issue No. 01-3, in the event that such an adjustment is required by Parent’s independent auditors, in each case, as determined in accordance with GAAP,

(vii) fees, costs, charges and expenses, in respect of Earn-Outs incurred in connection with any Permitted Acquisition to the extent permitted to be incurred under this Agreement that are required by the application of FAS 141R to be and are expensed by the Loan Parties and their Subsidiaries,

(viii) non-cash compensation expense (including deferred non-cash compensation expense), or other non-cash expenses or charges, arising from the sale or issuance of Equity Interests, the granting of stock options, and the granting of stock appreciation rights and similar arrangements (including any repricing, amendment, modification, substitution, or change of any such Equity Interests, stock option, stock appreciation rights, or similar arrangements) minus the amount of any such expenses or charges when paid in cash to the extent not deducted in the computation of net income (or loss),

(ix) non-recurring expenses for severance, recruitment and hiring of senior management or other officers (including signing bonuses in connection therewith),

 

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(x) non-recurring cash charges incurred during such period in respect of restructurings, retention, business process optimizations, project start-up costs, and headcount reductions,

(xi) the amount of any non-controlling interest expense consisting of losses attributed to non-controlling interests of third parties in any non-wholly owned Subsidiaries of Parent,

(xii) expenses, charges and fees (including expenses, charges and fees paid to Agent and Lenders) incurred during such period and after the Closing Date in connection with the administration (including in connection with any waiver, amendment, restatement, supplementation or other modification thereto of the Loan Documents) of the Loan Documents, and all rating agency costs and expenses related thereto,

(xiii) documented fees and expenses incurred during such period in connection with any issuance of Equity Interests permitted hereunder, any issuance or incurrence of any Indebtedness permitted to be incurred hereunder, any Permitted Investment (other than Permitted Acquisitions, Permitted Intercompany Advances and other Permitted Investments made in the ordinary course of business) or any Permitted Disposition, including any financing fees, merger and acquisition fees (in each case, whether or not such transaction is consummated),

(xiv) costs and expenses incurred (A) to the extent covered by indemnification or reimbursement provisions in any agreement with a Person in connection with any Permitted Acquisition, or (B) to the extent indemnified or reimbursed by a Person that is not an Affiliate of the Loan Parties, and in each case, solely to the extent such indemnification or reimbursement did not increase consolidated net income for such period,

(xv) non-cash losses in respect of obligations under hedging transactions, and non-cash losses resulting from currency translation or non-cash transaction losses related to currency re-measurements of Indebtedness, and all other non-cash foreign currency translation or transaction losses,

(xvi) non-cash losses on sales of fixed assets or discontinued or disposed of operations or write-downs of fixed or intangible assets (excluding write-downs of Accounts or Inventory) (provided, that to the extent any non-cash item added back to EBITDA in any period results in a cash payment in such period or a subsequent period such cash payment shall result in a reduction of EBITDA in the period when such payment is made),

(xvii) increases in any change in LIFO reserves,

(xviii) any non-cash expenses, losses, or charges with respect to non-compete agreements and other similar agreements, write-offs of deferred financing costs and debt issuance costs, unrealized losses on foreign currency translation, non-cash charges in respect of capitalized research and development and organizational costs, non-cash losses from permitted joint ventures and non-cash losses on any extinguishment of debt (provided, that to the extent any non-cash item added back to EBITDA in any period results in a cash payment in such period or a subsequent period such cash payment shall result in a reduction of EBITDA in the period when such payment is made),

 

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(xix) cost-savings, operating expense reductions, restructuring charges and expenses and cost-saving synergies (collectively, “Cost Savings”) projected by Borrowers in good faith to be realized as a result of any merger, acquisition, joint venture, material disposition taken or to be taken by the Borrowers or any of their Subsidiaries and permitted hereunder during such period (calculated on a pro forma basis as though such Cost-Savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided, that (A) such Cost-Savings are reasonably identifiable, reasonably attributable to the actions specified and reasonably anticipated to result from such actions, (B) such Cost-Savings are commenced within 12 months of such actions and the benefits resulting from such actions are reasonably anticipated by the Borrowers to be realized within twelve (12) months of the date of consummation of such merger, acquisition, joint venture or material disposition, (C) no Cost-Savings may be added pursuant to this clause (xxii) to the extent duplicative of any expenses or charges relating thereto that are either excluded in computing consolidated net income (or loss) or included (i.e., added back) in computing EBITDA for such period, and (D) the amount of any such Cost-Savings would be permitted to be included in financial statements prepared in accordance with Regulation S-X under the Securities Act during such period, and

(xx) proceeds of business interruption insurance received by a Loan Party (to the extent such proceeds of business interruption insurance (A) are not included in income of Parent and its Subsidiaries and (B) represent lost profits);

provided, that the amount added back to EBITDA pursuant to clauses (c)(vii), (c)(ix), (c)(x), (c)(xii) and (c)(xiv) shall not exceed the greater of $7,500,000 and 10% of EBITDA (before giving effect to such clauses) in the aggregate; and

provided, further, that the amount added back to EBITDA pursuant to clause (c)(xix) shall not exceed the greater of $7,500,000 and 10% of EBITDA (before giving effect to such clause) in the aggregate.

For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), if at any time during such Reference Period (and on or after the Closing Date), any Loan Party or any of its Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto or in such other manner acceptable to Agent as if any such Permitted Acquisition occurred on the first day of such Reference Period.

In addition, notwithstanding the foregoing, the amount of positive EBITDA attributable to Subsidiaries that are not Loan Parties during any calculation period, to the extent such amount exceeds 15% of EBITDA of the Loan Parties and their Subsidiaries on a consolidated basis for such calculation period, shall be disregarded for purposes of calculating the Fixed Charge Coverage Ratio and the Leverage Ratio.

In addition, notwithstanding the foregoing, (a) EBITDA for the quarter ended March 31, 2017 shall be deemed to be $(3,467,048), (b) EBITDA for the quarter ended June 30, 2017 shall be deemed to be $3,819,302, (c) EBITDA for the quarter ended September 30, 2017 shall be deemed to be $9,294,262, and (d) EBITDA for the quarter ended December 31, 2017 shall be deemed to be $17,297,516.

 

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

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

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

Eligible Accounts” means those Accounts created by a Loan Party in the ordinary course of its business, that arise out of such Loan Party’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any information with respect to the Loan Parties’ business or assets of which Agent becomes aware after the Closing Date, including any field examination performed by (or on behalf of) Agent from time to time after the Closing Date; provided further that Agent shall endeavor to notify Administrative Borrower at or before the time any such revision is instituted, but a non-willful failure of Agent to so notify Administrative Borrower shall not be a breach of this Agreement and shall not cause such revision to be ineffective; provided further that any such adjustments shall not be duplicative of any Reserves imposed by Agent in connection with any such information. In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits, unapplied cash, taxes, finance charges, service charges, discounts, credits, allowances, and rebates. Eligible Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or 60 days of due date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

(c) Accounts with respect to which the Account Debtor is an Affiliate of any Loan Party or an employee or agent of any Loan Party or any Affiliate of any Loan Party,

(d) Accounts (i) arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional, or (ii) with respect to which the payment terms are “C.O.D.”, cash on delivery or other similar terms,

 

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(e) Accounts that are not payable in Dollars or, with respect to Accounts of a Canadian Loan Party, Dollars or Canadian Dollars, or, with respect to Accounts of a UK Loan Party, Dollars or Sterling,

(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office or registered office in United States, Canada or United Kingdom (or, in the case of the UK Loan Party, any other EEA Member Country acceptable to Agent in its sole discretion), or (ii) is not organized under the laws of the United States or any state thereof, Canada or any province thereof, or the United Kingdom (or, in the case of the UK Loan Party, any other EEA Member Country acceptable to Agent in its sole discretion), or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and, if requested by Agent, is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,

(g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Loan Parties have complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), (ii) any state of the United States or any other Governmental Authority, or (iii) a Governmental Authority of Canada or any province thereof (exclusive, however, of Accounts with respect to which a Canadian Loan Party has complied, to the reasonable satisfaction of Agent, with any applicable assignment of claims statute, including the Financial Administration Act (Canada)),

(h) Accounts with respect to which the Account Debtor is a creditor of a Loan Party, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

(i) Accounts with respect to an Account Debtor rated (or whose parent is rated) Baa3 or higher from Moody’s or BBB- or higher from S&P whose Eligible Accounts owing to Loan Parties exceed 20%, or Accounts with respect to an Account Debtor other than one previously described by this clause (i) whose Eligible Accounts owing to Loan Parties exceed 15% (such percentages, in either case, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates; provided that Agent shall endeavor to notify Administrative Borrower at or before the time any such reduction is instituted, but a non-willful failure of Agent to so notify Administrative Borrower shall not be a breach of this Agreement and shall not cause such reduction to be ineffective) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, that in each case, the amount of Eligible Accounts that are excluded because they exceed the applicable foregoing percentage shall be determined by Agent in its Permitted Discretion based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

 

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(j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which any Loan Party has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

(k) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor’s financial condition,

(l) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

(m) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

(n) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity,

(o) Accounts (i) that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Loan Party of the subject contract for goods or services, or (ii) that represent credit card sales,

(p) Accounts owned by a target acquired in connection with a Permitted Acquisition or Permitted Investment, or Accounts owned by a Person that is joined to this Agreement as a Loan Party pursuant to the provisions of this Agreement, until the completion of a field examination with respect to such Accounts, in each case, satisfactory to Agent in its Permitted Discretion,

(q) in the case of a UK Loan Party, Accounts with respect to which the Account Debtor is located in a jurisdiction that requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless such UK Loan Party has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges), except to the extent that such UK Loan Party may qualify subsequently as a foreign entity authorized to transact business in such jurisdiction and gain access to such courts, without incurring any cost or penalty viewed by Agent in its Permitted Discretion to be significant in amount, and such later qualification cures any access to such courts to enforce payment of such Account,

(r) in the case of the UK Loan Party, Accounts for which the assignment thereof are restricted or prohibited by the terms of such Account or by law except to the extent such restriction or prohibition does not prevent the collection thereof by the UK Loan Party or affect or impair the validity or perfection of the Agent’s Liens therein, or

 

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(s) in the case of the UK Loan Party, Accounts not governed by the laws of any legal jurisdiction of the United States or the United Kingdom.

Eligible Finished Goods Inventory” means Inventory that qualifies as Eligible Inventory and consists of first quality finished goods held for sale in the ordinary course of Loan Parties’ business.

Eligible Inventory” means Inventory of a Loan Party, that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any information with respect to the Loan Parties’ business or assets of which Agent becomes aware after the Closing Date, including any field examination or appraisal performed or received by Agent from time to time after the Closing Date. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if:

(a) a Loan Party does not have good, valid, and marketable title thereto,

(b) a Loan Party does not have actual and exclusive possession thereof (either directly or through a bailee or agent of a Borrower),

(c) it is not located at one of the locations in the continental United States (in the case of US Borrowers), Canada (in the case of Canadian Borrowers) or the United Kingdom (in the case of UK Borrowers), in each case set forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time with not less than 10 days’ prior written notice to Agent) (or in-transit from one such location in the United States to another such location in the United States (in the case of US Borrowers), or in-transit from one such location in Canada to another such location in Canada (in the case of Canadian Borrowers) or in-transit from one such location in the United Kingdom to another such location in the United Kingdom (in the case of the UK Borrowers)),

(d) it is stored at locations holding less than $200,000 of the aggregate value of such Borrower’s Inventory,

(e) it is in-transit to or from a location of a Borrower (other than in-transit from one location set forth on Schedule 4.25 to this Agreement to another location set forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time with the prior written consent of Agent)),

(f) it is located on real property leased by a Loan Party or in a contract warehouse or with a bailee or customer, in each case, unless either (i) it is subject to a Collateral Access Agreement executed by the lessor, customer or warehouseman, as the case may be, and it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises, or (ii) Agent has established a Landlord Reserve with respect to such location,

(g) it is the subject of a bill of lading or other document of title,

 

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(h) it is not subject to a valid and perfected first priority Agent’s Lien,

(i) it consists of goods returned or rejected by a Loan Party’s customers,

(j) it consists of goods that are obsolete, slow moving, spoiled or are otherwise past the stated expiration, “sell-by” or “use by” date applicable thereto, restrictive or custom items or otherwise is manufactured in accordance with customer-specific requirements, work-in-process, raw materials, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Loan Parties’ business, bill and hold goods, defective goods, “seconds,” or Inventory acquired on consignment,

(k) it is subject to third party intellectual property, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights,

(l) it was acquired in connection with a Permitted Acquisition or Permitted Investment, or such Inventory is owned by a Person that is joined to this Agreement as a Loan Party pursuant to the provisions of this Agreement, until the completion of an Acceptable Appraisal of such Inventory and the completion of a field examination with respect to such Inventory that is satisfactory to Agent in its Permitted Discretion, or

(m) in the case of a UK Loan Party, it is subject to (i) a contract or related documentation (such as an invoice or purchase order) which includes retention-of-title rights in favor of the vendor or supplier thereof and (ii) applicable laws which provide that retention of title may be imposed unilaterally by the vendor or supplier thereof.

Eligible Transferee” means (a) any Lender (other than a Defaulting Lender), any Affiliate of any Lender and any Related Fund of any Lender; (b) (i) a commercial bank organized under the laws of the United States or any state thereof or Canada, and having total assets in excess of $1,000,000,000; (ii) a savings and loan association or savings bank organized under the laws of the United States or any state thereof, and having total assets in excess of $1,000,000,000; (iii) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided, that (A) (x) such bank is acting through a branch or agency located in the United States or Canada, or (y) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country, and (B) such bank has total assets in excess of $1,000,000,000; (c) any other entity (other than a natural person) that is an “accredited investor” (as defined in Regulation D under the Securities Act) that extends credit or buys loans as one of its businesses including insurance companies, investment or mutual funds and lease financing companies, and having total assets in excess of $1,000,000,000; and (d) during the continuation of an Event of Default other than a Specified Event of Default, any other Person (other than a natural person or a Competitor) approved by Agent, and during the continuation of a Specified Event of Default, any other Person (other than a natural person) approved by Agent.

Employee Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA to which any Loan Party has an obligation to make a contribution, including as the result of being an ERISA Affiliate, other than a Canadian Benefit Plan or a Canadian Pension Plan.

 

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Environmental Action” means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, decree, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest.

Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, decree, consent decree or judgment, in each case, to the extent binding on any Loan Party or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

Environmental Liabilities” means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities.

Equipment” means equipment (as that term is defined in the Code or, to the extent applicable, the PPSA).

Equity Interests” means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units), preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

Equity Issuance Proceeds” means, with respect to any issuance of Equity Interests, all cash and cash equivalent investments received by the Parent from such issuance of Equity Interests (other than from any Subsidiary) after payment of, or provision for, all underwriter fees and expenses, SEC and blue sky fees, printing costs, fees and expenses of accountants, lawyers and other professional advisors, brokerage commissions and other out-of-pocket fees and expenses actually incurred by any Loan Party in connection with such issuance of Equity Interests.

 

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ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which any Loan Party is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with any Loan Party and whose employees are aggregated with the employees of such Loan Party under IRC Section 414(o).

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

Event of Default” has the meaning specified therefor in Section 8 of this Agreement.

Excess” has the meaning specified therefor in Section 2.14 of this Agreement.

Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.

Exchange Rate” means and refers to the nominal rate of exchange (vis-à-vis Dollars) for a currency other than Dollars published in the Wall Street Journal (Western Edition) on the date of determination (which shall be a Business Day on which the Wall Street Journal (Western Edition) is published), expressed as the number of units of such other currency per one Dollar.

Excluded Collateral” means, with respect to any Loan Party, including any Person that becomes a Loan Party after the Closing Date, (i) voting Equity Interests of any CFC, solely to the extent that (w) such Equity Interests secure the US Obligations (and, for the avoidance of doubt, this clause (i) shall not limit the portion of such Equity Interests pledged to secure any Foreign Obligations), and (y) such Equity Interests represent more than 65% of the outstanding voting Equity Interests of such CFC (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), (ii) any rights or interest in any contract, lease, permit, license, or license agreement covering real or personal property of any Grantor if under the terms of such contract, lease, permit, license, or license agreement, or applicable law with respect thereto, the grant of a security interest or lien therein is prohibited as a matter of law or under the terms of such contract, lease, permit, license, or license agreement and such prohibition or restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided, that (A) the foregoing exclusions of this clause (ii) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-

 

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406, 9-407, 9-408, or 9-409 of the Code or other applicable law, or (2) to apply to the extent that any consent or waiver has been obtained that would permit Agent’s security interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (B) the foregoing exclusions of clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise affect any of Agent’s, any other member of the Lender Group’s or any Bank Product Provider’s continuing security interests in and liens upon any rights or interests of any Grantor in or to (1) monies due or to become due under or in connection with any described contract, lease, permit, license, license agreement, or Equity Interests (including any Accounts or Equity Interests), or (2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or Equity Interests), (iii) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law; provided, that upon submission and acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use trademark application shall be considered Collateral, (iv) any motor vehicles, (v) any real or personal property as to which the Agent and the Borrowers agree in writing that the costs or other consequences of obtaining a security interest or perfection thereof (including, without limitation, based on the location of any such real property) are excessive in view of the benefits to be obtained by the Lender Group therefrom, and (vi) all fee and leasehold interests in real property that is not required to constitute Real Property Collateral. Notwithstanding the foregoing, “Excluded Collateral” shall not include any asset which is the subject of a floating charge governed by English law or Scottish law.

Excluded Subsidiary” means (a) any Disregarded Domestic Persons, (b) any Foreign Subsidiary of a Loan Party that is a CFC, (c) any Domestic Subsidiary of a Loan Party that is a direct or indirect subsidiary of a Foreign Subsidiary that is a CFC, or (d) any Subsidiary that has no assets (other than de minimis assets) other than Equity Interests in entities described in clauses (a), (b) and (c) above.

Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of (including by virtue of the joint and several liability provisions of Section 2.15), or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

Excluded Taxes” means (i) any Tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or

 

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such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in or as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under this Agreement or any other Loan Document), (ii) United States or Canadian federal withholding taxes that would not have been imposed but for a Lender’s or a Participant’s failure to comply with the requirements of Section 16.2 of this Agreement, (iii) any United States or Canadian federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office, other than a designation made at the request of a Loan Party), except that Excluded Taxes shall not include any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to Section 16.1 of this Agreement, if any, with respect to such withholding tax at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), and (iv) any United States, Canada and UK withholding taxes imposed under FATCA.

Existing Credit Facility” means that certain Credit Agreement, dated as of April 18, 2014, among Parent, as Borrower, Wells Fargo, as administrative agent, an issuing lender and US swingline lender thereunder, the lenders party thereto from time to time and Wells Fargo Securities, LLC, as sole lead arranger and sole book runner thereunder, as such agreement has been amended, restated, supplemented or otherwise modified from time to time.

Existing Letters of Credit” means those letters of credit described on Schedule E-1 to this Agreement.

Extraordinary Advances” means the US Extraordinary Advances, the UK Extraordinary Advances and/or the Canadian Extraordinary Advances, as the context requires.

Facility Office” means in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and (a) any current or future regulations or official interpretations thereof, (b) any agreements entered into pursuant to Section 1471(b)(1) of the IRC, (c) any intergovernmental agreement entered into by the United States (or any fiscal or regulatory legislation, rules, or practices adopted pursuant to any such intergovernmental agreement entered into in connection therewith) and (d) any analogous provision of UK and Canadian law.

FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

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Fee Letter” means that certain fee letter, dated as of even date with this Agreement, among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.

Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by it (and, if any such rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero).

Financial Support Direction” means a financial support direction issued by the Pensions Regulator under section 43 of the Pensions Act 2004 (UK).

Fixed Charges” means, with respect to any fiscal period and with respect to Parent determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense required to be paid (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid during such period, (c) all federal, state, provincial and local income and capital taxes required to be paid during such period, (d) all Restricted Payments paid (whether in cash or other property, other than common Equity Interests) during such period and all amounts paid with respect to Earn-Outs during such period, and (e) to the extent not otherwise deducted from EBITDA for such period, all payments required to be made during such period in respect of any funding deficiency or funding shortfall with respect to any Pension Plan or for any Withdrawal Liability.

For the purpose of any calculation of Fixed Charge Coverage Ratio on or prior to March 31, 2019, each component set forth in clauses (a), (b), (c) (d) and (e) of definition of Fixed Charges for each period set forth below shall be deemed to be the amount set forth below opposite such period:

 

     Interest
Expense
     Scheduled
Principal
Payments of
Indebtedness
     Federal, State,
Provincial and
Local Income
and Capital
Taxes
     Restricted
Payments
and Earn-
Outs
     Funding
Deficiencies
or Shortfalls
 

Fiscal Quarter ended March 31, 2017

   $ 947,787      $ 0      $ 2,223,940      $ 0      $ 0  

Fiscal Quarter ended June 30, 2017

   $ 1,550,299      $ 0      $ 495,049      $ 0      $ 0  

Fiscal Quarter ended September 30, 2017

   $ 2,005,001      $ 0      $ 47,536      $ 0      $ 0  

Fiscal Quarter ended December 31, 2017

   $ 2,071,295      $ 0      $ 0      $ 0      $ 0  

 

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Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with respect to Parent determined on a consolidated basis in accordance with GAAP, the ratio of (a) EBITDA for such period minus Unfinanced Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period, to (b) Fixed Charges for such period. For the purpose of any calculation of Fixed Charge Coverage Ratio on or prior to March 31, 2019, Unfinanced Capital Expenditures shall be deemed to be for each period set forth below shall be deemed to be $765,872 for the fiscal quarter ended March 31, 2017, $959,311 for the fiscal quarter ended June 30, 2017, $1,245,066 for the fiscal quarter ended September 30, 2017, and $1,249,342 for the fiscal quarter ended December 31, 2017.

For the purposes of calculating Fixed Charge Coverage Ratio for any Reference Period, if at any time during such Reference Period (and after the Closing Date), any Loan Party or any of its Subsidiaries shall have made a Permitted Acquisition, Fixed Charges and Unfinanced Capital Expenditures for such Reference Period shall be calculated after giving pro forma effect thereto or in such other manner acceptable to Agent as if any such Permitted Acquisition occurred on the first day of such Reference Period.

Flow of Funds Agreement” means a flow of funds agreement, dated as of even date with this Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by Borrowers and Agent.

Foreign Cash Equivalents” means (a) certificates of deposit, bankers’ acceptances, or time deposits maturing within one year from the date of acquisition thereof, in each case payable in an Agreed Currency and issued by any bank organized under the laws of any Specified State and having at the date of acquisition thereof combined capital and surplus of not less than $1,000,000,000 (calculated at the then applicable Exchange Rate), (b) Deposit Accounts maintained with any bank that satisfies the criteria described in clause (a) above, and (c) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (b) above.

Foreign Lender” means any Lender or Participant that (i) in the case of a US Borrower, is not a United States person within the meaning of IRC section 7701(a)(30), (ii) in the case of a Canadian Borrower, is not resident in Canada (within the meaning of the Income Tax Act (Canada) for the purposes of Part XIII of the Income Tax Act (Canada), and (iii) in the case of a UK Borrower, is not resident in the United Kingdom.

Foreign Obligations” means the UK Obligations plus the Canadian Obligations.

 

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Foreign Subsidiary” means any direct or indirect subsidiary of any Loan Party that is organized under the laws of, or incorporated in, any jurisdiction other than the United States, any state thereof or the District of Columbia.

Funded Indebtedness” means, as of any date of determination, all Indebtedness for borrowed money or letters of credit of Parent, determined on a consolidated basis in accordance with GAAP, including, in any event, but without duplication, with respect to the Loan Parties and their Subsidiaries, the Revolver Usage, and the amount of their Capitalized Lease Obligations.

Funding Date” means the date on which a Borrowing occurs.

Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of this Agreement.

GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

Governing Documents” means, with respect to any Person, the certificate of registration/incorporation, memorandum and articles of association/incorporation, by-laws, or other organizational documents of such Person.

Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, county, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantors” means US Guarantors, Canadian Guarantors and UK Guarantors.

Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

Hedge Agreement” means a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code.

Hedge Obligations” means US Hedge Obligations, UK Hedge Obligations and/or Canadian Hedge Obligations, as the context requires.

 

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Hedge Provider” means any Bank Product Provider that is a party to a Hedge Agreement with a Loan Party or its Subsidiaries or otherwise provides Canadian Bank Products, UK Bank Products or US Bank Products under clause (f) of the definitions thereof; provided, that if, at any time, a Lender ceases to be a Lender under this Agreement (prior to the payment in full of the Obligations), then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Hedge Providers and the obligations with respect to Hedge Agreements entered into with such former Lender or any of its Affiliates shall no longer constitute Hedge Obligations.

Immaterial Subsidiary” means any Subsidiary (other than any Borrower) that, taken together with all Immaterial Subsidiaries as of the last day of the fiscal quarter of Parent most recently ended for which financial statements are required to be delivered pursuant to Section 5.1 (or, as of the Closing Date, the most recent financial statements delivered prior to the Closing Date), did not have assets with a value in excess of 5.0% of consolidated total assets or revenues representing in excess of 5.0% of revenues (for Parent and its Subsidiaries on a consolidated basis) as of such date (or as of the Closing Date, as applicable); provided that if as of the last day of the fiscal quarter of Parent most recently ended for which financial statements are required to be delivered pursuant to Section 5.1 (or, as of the Closing Date, the most recent financial statements delivered prior to the Closing Date), the consolidated total assets or revenues of all Subsidiaries so designated by the Borrowers as “Immaterial Subsidiaries” shall have, as of the last day of such fiscal quarter, exceeded either of the limits set forth above, then within thirty (30) days after the date such financial statements are so delivered (or so required to be delivered), the Borrowers shall re-designate one or more Immaterial Subsidiaries in a written notice to Agent, such that, as a result thereof, the consolidated total assets and revenues of all Subsidiaries that are still designated as “Immaterial Subsidiaries” do not exceed such limits. Upon any such Subsidiary ceasing to be an Immaterial Subsidiary pursuant to the preceding sentence, such Subsidiary shall comply with Section 5.10, to the extent applicable for so long as such Subsidiary is not determined or deemed to be an Immaterial Subsidiary.

Increase” has the meaning specified therefor in Section 2.14.

Increase Date” has the meaning specified therefor in Section 2.14.

Increase Joinder” has the meaning specified therefor in Section 2.14.

Increased Reporting Event” means if at any time Aggregate Excess Availability is less than the greater of (a) 15% of the Line Cap, and (b) $70,000,000.

Increased Reporting Period” means the period commencing after the continuance of an Increased Reporting Event and continuing until the date when no Increased Reporting Event has occurred for 30 consecutive days.

Indebtedness” as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any

 

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asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices and, for the avoidance of doubt, other than royalty payments payable in the ordinary course of business in respect of non-exclusive licenses) and any earn-out or similar obligations, (f) all monetary obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of this Agreement.

Indemnified Person” has the meaning specified therefor in Section 10.3 of this Agreement.

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

Insolvency Law” means (i) the Bankruptcy Code, (ii) the Bankruptcy and Insolvency Act (Canada), (iii) the Companies’ Creditors Arrangement Act (Canada), (iv) the Winding-Up and Restructuring Act (Canada), (v) the Canada Business Corporations Act (Canada), the Business Corporations Act (Alberta) and any other corporate statute of like effect, where such statute is used by a Person to propose an arrangement, (vi) the Insolvency Act 1986 (UK) and/or (vii) any similar legislation in a relevant jurisdiction, in each case as applicable and as in effect from time to time.

Insolvency Proceeding” means any proceeding commenced by or against any Person under any Insolvency Law or under any other state, provincial or federal bankruptcy or insolvency law, each as now and hereafter in effect, any successors to such statutes, and any similar laws in any jurisdiction including, without limitation, any laws relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief and any law permitting a debtor to obtain a stay or a compromise of the claims of its creditors, and including, in the case of a UK Loan Party, any corporate action, legal proceedings or other

 

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procedure commenced or other step taken (including the making of an application, the presentation of a petition, the filing or service of a notice or the passing of a resolution) in relation to (a) such UK Loan Party being adjudicated or found insolvent, (b) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise) of such UK Loan Party other than a solvent liquidation or reorganization of such UK Loan Party, the terms of which have been previously approved in writing by Agent, (c) a composition, trust deed, assignation, assignment or arrangement with any class of creditors of such UK Loan Party, or (d) the appointment of a liquidator, supervisor, Scottish receiver, receiver, administrator, administrative receiver, special manager, compulsory manager, trustee, judicial factor or other similar officer in respect of such UK Loan Party or any of its assets.

Insolvency Regulation” means The Council of the European Union Regulation No. 2015/848 on insolvency proceedings (recast).

Intercompany Subordination Agreement” means an intercompany subordination agreement, dated as of even date with this Agreement, executed and delivered by each Loan Party and each of its Subsidiaries, and Agent, the form and substance of which is reasonably satisfactory to Agent.

Interest Expense” means, for any period, the aggregate of the interest expense of Parent for such period, determined on a consolidated basis in accordance with GAAP.

Interest Period” means, with respect to each Non-Base Rate Loan, a period commencing on the date of the making of such Non-Base Rate Loan (or the continuation of a Non-Base Rate Loan or the conversion of a Base Rate Loan to a Non-Base Rate Loan) and ending 1, 2, 3, or 6 months thereafter; provided, that (a) interest shall accrue at the applicable rate based upon the Non-Base Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, 3 or 6 months after the date on which the Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period which will end after the Maturity Date.

Inventory” means inventory (as that term is defined in the Code or, to the extent applicable, the PPSA).

Inventory Reserves” means, as of any date of determination, without duplication, (a) Landlord Reserves in respect of Inventory, and (b) those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(e), to establish and maintain (including reserves for slow moving Inventory and Inventory shrinkage) with respect to Eligible Inventory, the Maximum Revolver Amount, the UK Maximum Revolver Amount or the Canadian Maximum Revolver Amount, including based on the results of appraisals.

 

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Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide accounts receivable arising in the ordinary course of business), or acquisitions of Indebtedness, Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.

IRC” means the Internal Revenue Code of 1986, as amended.

ISP” means, with respect to any Letter of Credit, the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any version or revision thereof accepted by an Issuing lender for use.

Issuer Document” means, with respect to any Letter of Credit, a letter of credit application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by a Borrower in favor of an Issuing Lender and relating to such Letter of Credit.

Issuing Lender” means US Issuing Lender, UK Issuing Lender and/or Canadian Issuing Lender, as the context requires.

ITA” means the Income Tax Act 2007 (UK).

Joinder” means a joinder agreement substantially in the form of Exhibit J-1 to this Agreement.

Joint Book Runner” has the meaning set forth in the preamble to this Agreement.

Joint Lead Arranger” has the meaning set forth in the preamble to this Agreement.

Landlord Reserve” means, as to each location at which a Borrower has Inventory or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve deemed necessary or reasonably desirable by Agent in an amount up to 3 months’ rent, storage charges, fees or other amounts under the lease or other applicable occupancy agreement relative to such Borrower’s right to occupy such location or, if greater and Agent so elects in its Permitted Discretion, the number of months’ rent, storage charges, fess or other amounts for which the landlord, bailee, warehouseman or other property owner will have, under applicable law, a Lien in the Inventory of such Borrower to secure the payment of such amounts under the lease or other applicable agreement relative to such Borrower’s right to occupy such location.

 

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Lender” has the meaning set forth in the preamble to this Agreement, shall include each Issuing Lender and each Swing Lender, and shall also include any other Person made a party to this Agreement pursuant to the provisions of Section 13.1 of this Agreement and “Lenders” means each of the Lenders or any one or more of them.

Lender Group” means each of the Lenders (including each Issuing Lender and each Swing Lender) and Agent, or any one or more of them and, solely for purposes of the definition of “Lender Group Expenses”, any UK security trustee appointed under a UK Security Document and any receiver, attorney, manager, agent or other person appointed by such UK security trustee.

Lender Group Expenses” means all (a) out-of-pocket costs or expenses (including taxes and insurance premiums) required to be paid by any Loan Party or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) reasonable, documented and out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with each Loan Party and its Subsidiaries under any of the Loan Documents, including, photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, publication, real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s documented and out-of-pocket customary fees and charges imposed or incurred in connection with any background checks or OFAC/PEP searches related to any Loan Party or its Subsidiaries, (d) Agent’s documented and customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of any Borrower (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in connection therewith, (e) customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (f) reasonable, documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (g) field examination, appraisal, and valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent of the fees and charges (and up to the amount of any limitation) provided in Section 2.10 of this Agreement, (h) Agent’s and Lenders’ reasonable, documented and out-of-pocket costs and expenses (including reasonable and documented outside counsel attorneys’ fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s relationship with any Loan Party or any of its Subsidiaries, (i) Agent’s reasonable, documented and out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable costs and expenses relative to CUSIP, DXSyndicate™, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, and (j) Agent’s and each Lender’s reasonable, documented and out-of-pocket costs and expenses (including reasonable and documented attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys,

 

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accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning any Loan Party or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral.

Lender Group Representatives” has the meaning specified therefor in Section 17.9 of this Agreement.

Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.

Letter of Credit” means a US Letter of Credit, UK Letter of Credit and/or a Canadian Letter of Credit, as the context requires.

Letter of Credit Collateralization” means with respect to the US Letter of Credit Obligations, UK Letter of Credit Obligations or the Canadian Letter of Credit Obligations, as applicable, either (a) providing cash collateral in the Applicable Currency (pursuant to documentation reasonably satisfactory to Agent (including that Agent has a first priority perfected Lien in such cash collateral), including provisions that specify that the applicable Letter of Credit Fees and all commissions, fees, charges and expenses provided for in Section 2.11A(k) and Section 2.11B(k) and Section 2.11C(k) of this Agreement (including any fronting fees) will continue to accrue while the applicable Letters of Credit are outstanding) to be held by Agent for the benefit of the applicable Revolving Lenders in an amount equal to 105% of the then existing US Letter of Credit Usage, 120% of the then existing UK Letter of Credit Usage and 105% of the then existing Canadian Letter of Credit Usage, (b) delivering to Agent documentation executed by all beneficiaries under the applicable Letters of Credit, in form and substance reasonably satisfactory to Agent and the applicable Issuing Lender, terminating all of such beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent in the Applicable Currency, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 105% of the then existing US Letter of Credit Usage, 120% of the then existing UK Letter of Credit Usage and 105% of the then existing Canadian Letter of Credit Usage (it being understood that the applicable Letter of Credit Fee and all fronting fees set forth in this Agreement will continue to accrue while the applicable Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

Letter of Credit Disbursement” means a US Letter of Credit Disbursement, UK Letter of Credit Disbursement and/or a Canadian Letter of Credit Disbursement, as the context requires.

Letter of Credit Exposure” means the US Letter of Credit Exposure, UK Letter of Credit Exposure and/or the Canadian Letter of Credit Exposure, as the context requires.

Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b).

 

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Letter of Credit Indemnified Costs” means any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable documented fees and disbursements of attorneys or experts, and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of the indemnification set forth in Section 2.11A or Section 2.11B or Section 2.11C (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any Letter of Credit Related Person (other than Taxes, which shall be governed by Section 16) in connection with any Letter of Credit.

Letter of Credit Related Person” means each member of the Lender Group (including each of each Issuing Lender and its branches, Affiliates, and correspondents and Canadian Underlying Issuer and its branches, Affiliates and correspondents) and each such Person’s respective directors, officers, employees, attorneys and agents.

Letter of Credit Sublimit” means $60,000,000.

Letter of Credit Usage” means the US Letter of Credit Usage, the UK Letter of Credit Usage and/or the Canadian Letter of Credit Usage, as the context requires.

Leverage Ratio” means, as of any date of determination the result of (a) the amount of Parent’s Funded Indebtedness as of such date, to (b) Parent’s EBITDA for the 4 quarter period ended as of such date.

LIBOR Rate” means the rate per annum as published by ICE Benchmark Administration Limited (or any successor page or other commercially available source as the Agent may designate from time to time) as of 11:00 a.m., London time, two Business Days prior to the commencement of the requested Interest Period (or, with respect to Obligations denominated in Sterling, as of 11:00 a.m., London time, on the Business Day on which the requested Interest Period commences) for deposits in the Applicable Currency, for a term, and in an amount, comparable to the Interest Period and the amount of the Non-Base Rate Loan requested (whether as an initial Non-Base Rate Loan or as a continuation of a Non-Base Rate Loan or as a conversion of a Base Rate Loan to a Non-Base Rate Loan) by Borrowers in accordance with the Agreement (and, if any such published rate is below zero, then such rate shall be deemed to be zero), which determination shall be made by Agent and shall be conclusive in the absence of manifest error.

Lien” means any mortgage, standard security, deed of trust, pledge, hypothecation, assignment, assignation, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

Line Cap” means, as of any date of determination, the lesser of (a) the Maximum Revolver Amount, and (b) the sum of the Dollar Equivalent of the Canadian Borrowing Base (calculated without giving effect to clause (d) of the definition thereof) plus the UK Borrowing Base (calculated without giving effect to clause (d) of the definition thereof) plus the US Borrowing Base as of such date of determination.

 

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Loan” means any Revolving Loan, Swing Loan or Extraordinary Advance made (or to be made) hereunder.

Loan Account” means the US Loan Account, UK Loan Account and/or the Canadian Loan Account, as the context requires.

Loan Documents” means this Agreement, the Control Agreements, the US Copyright Security Agreement, the Canadian Copyright Security Agreement, any Borrowing Base Certificate, the Fee Letter, the US Security Agreement, the Canadian Security Documents, the UK Security Documents, the Intercompany Subordination Agreement, any Issuer Documents, the Letters of Credit, the Mortgages, the US Patent Security Agreement, the US Trademark Security Agreement, the Canadian Patent Security Agreement, the Canadian Trademark Security Agreement, any security trust deed, any guaranties executed by any Loan Party, any note or notes executed by Borrowers in connection with this Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries and any member of the Lender Group in connection with this Agreement (but specifically excluding Bank Product Agreements).

Loan Parties” means the US Loan Parties, UK Loan Parties and/or the Canadian Loan Parties, as the context requires.

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

Material Adverse Effect” means (a) a material adverse effect in the business, property, or condition (financial or otherwise) of the Loan Parties and their Subsidiaries, taken as a whole, (b) a material impairment of the Loan Parties’ and their Subsidiaries’ ability to perform their obligations under the Loan Documents to which they are parties or of the Lender Group’s ability to enforce the Obligations or (other than as a result of an action taken or not taken that is solely in the control of Agent) realize upon the Collateral, or (c) a material impairment of the enforceability or priority of Agent’s Liens with respect to all or a material portion of the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent).

Material Contract” means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $45,000,000 or more (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium), and (b) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect.

Maturity Date” means April 30, 2023.

Maximum Revolver Amount” means $750,000,000, decreased by the amount of reductions in the Revolver Commitments made in accordance with Sections 2.4(c) of this Agreement, and increased by the amount of any Increase made in accordance with Section 2.14 of this Agreement.

 

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Moody’s” has the meaning specified therefor in the definition of Domestic Cash Equivalents.

Mortgages” means, individually and collectively, one or more mortgages, standard securities, deeds of trust, or deeds to secure debt, executed and delivered by a Loan Party or one of its Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral.

Multiemployer Plan” means any multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA with respect to which any Loan Party or ERISA Affiliate has an obligation to contribute or has any liability, contingent or otherwise or could be assessed withdrawal liability assuming a complete withdrawal from any such multiemployer plan.

Net Cash Proceeds” means, with respect to the Permitted Sale Leaseback, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of such Loan Party or such Subsidiary, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to Agent or any Lender under this Agreement or the other Loan Documents and (B) Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by such Loan Party or such Subsidiary in connection with such sale or disposition, (iii) taxes paid or payable to any taxing authorities by such Loan Party or such Subsidiary in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Loan Party or any of its Subsidiaries, and are properly attributable to such transaction, and (iv) all amounts that are set aside as a reserve (A) for adjustments in respect of the purchase price of such assets, (B) for any liabilities associated with such sale or casualty, to the extent such reserve is required by GAAP, and (C) for the payment of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale or other disposition, to the extent that in each case the funds described above in this clause (iv) are (x) deposited into escrow with a third party escrow agent or set aside in a separate Deposit Account that is subject to a Control Agreement in favor of Agent, and (y) if applicable, paid to Agent as a prepayment of the applicable Obligations in accordance with Section 2.4(e) of this Agreement at such time when such amounts are no longer required to be set aside as such a reserve.

Net Recovery Percentage” means, as of any date of determination, the percentage of the book value of Borrowers’ Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be determined as to each category of Inventory and to be as specified in the most recent Acceptable Appraisal of Inventory.

 

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Non-Base Rate Deadline” has the meaning specified therefor in Section 2.12(b)(i) of this Agreement.

Non-Base Notice” means a written notice in the form of Exhibit L-1 to this Agreement.

Non-Base Option” has the meaning specified therefor in Section 2.12(a) of this Agreement.

Non-Base Rate” means the LIBOR Rate; provided that with respect to Canadian Obligations denominated in Canadian Dollars, Non-Base Rate means the CDOR Rate.

Non-Base Rate Loan” means each portion of a Revolving Loan that bears interest at a rate determined by reference to the applicable Non-Base Rate.

Non-Base Rate Margin” has the meaning set forth in the definition of Applicable Margin.

Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of this Agreement.

Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

Notification Event” means (a) the occurrence of a “reportable event” described in Section 4043 of ERISA for which the 30-day notice requirement has not been waived by applicable regulations issued by the PBGC, (b) the withdrawal of any Loan Party or ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, (e) the imposition of a Lien pursuant to the IRC or ERISA in connection with any Pension Plan, (f) the partial or complete withdrawal of any Loan Party or ERISA Affiliate from a Multiemployer Plan (other than any withdrawal that would not constitute a Material Adverse Effect), (g) the insolvency of a Multiemployer Plan under ERISA, (h) the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate or to appoint a trustee to administer a Multiemployer Plan under ERISA, (i) any Pension Plan being in “at risk status” within the meaning of IRC Section 430(i), (j) any Multiemployer Plan being in “endangered status” or “critical status” within the meaning of IRC Section 432(b), (k) with respect to any Pension Plan, any Loan Party or ERISA Affiliate incurring a substantial cessation of operations within the meaning of ERISA Section 4062(e), (l) the failure of any Pension Plan to meet the minimum funding standards within the meaning of the IRC or ERISA (including Section 412 of the IRC or Section 302 of ERISA), in each case, whether or not waived, (m) the filing of an application for a waiver of the minimum funding standards within the meaning of the IRC or ERISA including Section 412 of the IRC or Section 302 of ERISA) with respect to any Pension Plan, (n) the failure to make by its due date a required payment or contribution with respect to any Pension Plan or Multiemployer Plan, or (o) any event that results in or could reasonably be expected to result in a liability by a Loan Party pursuant to Title I of ERISA or the excise tax provisions of the IRC relating to Employee Plans or any event that results in or could reasonably be expected to result in a liability to any Loan Party pursuant to Title IV of ERISA (other than the payment of premiums to the be PBGC in the ordinary course of business).

 

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Obligations” means any or all of the US Obligations, the UK Obligations and/or the Canadian Obligations, as the context requires.

OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

Originating Lender” has the meaning specified therefor in Section 13.1(e) of this Agreement.

Other Taxes” means all present or future stamp, court, excise, value added, or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

Overadvance” means a US Overadvance, UK Overadvance and/or a Canadian Overadvance, as the context requires.

Parent” has the meaning specified therefor in the preamble to this Agreement.

Participant” has the meaning specified therefor in Section 13.1(e) of this Agreement.

Participant Register” has the meaning set forth in Section 13.1(i) of this Agreement.

Pass-Through Tax Liabilities” means with respect to any Borrower that is a disregarded entity or partnership for U.S. federal income tax purposes for the applicable taxable period, the amount of state, local and federal income tax paid or required to be paid under applicable law by the owner or owners of any Equity Interest in such Borrower on taxable income earned by such Borrower, assuming the highest marginal income tax rate for federal, state and local (for the state or states in which any owner of an Equity Interest in such Borrower is liable for income taxes with respect to such income) income tax purposes, after taking into account any deductions or credits that are eligible to offset such taxable income and that are available to such owner of such Equity Interest from or through such Borrower, including deductions and credits for prior taxable periods after the date hereof.

Patriot Act” has the meaning specified therefor in Section 4.13 of this Agreement.

 

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Payment Conditions” means, at the time of determination with respect to a proposed payment to fund a Specified Transaction, that:

(a) no Default or Event of Default then exists or would arise as a result of the consummation of such Specified Transaction,

(b) either

(i) Aggregate Excess Availability after giving effect to such proposed payment and Specified Transaction, in each case, is not less than (A) in the case of a Specified Transaction consisting of a Permitted Acquisition or prepayment of Indebtedness, the greater of (1) 17.5% of the Line Cap, and (2) $80,000,000, and (B) in the case of a Specified Transaction consisting of a Restricted Payment, a Permitted Investment of the type described in clause (s) of the definition thereof or a Permitted Intercompany Advance of the type described in clause (e) of the definition thereof, the greater of (1) 20.0% of the Line Cap, and (2) $90,000,000, or

(ii) both (A) the Fixed Charge Coverage Ratio of the Loan Parties and their Subsidiaries is equal to or greater than 1.00:1.00 for the trailing 4 quarter period most recently ended for which financial statements are required to have been delivered to Agent pursuant to Schedule 5.1 to this Agreement (calculated on a pro forma basis as if such proposed payment (other than consideration paid for a Permitted Acquisition) is a Fixed Charge made on the last day of such 4 quarter period (it being understood that such proposed payment (other than consideration paid for a Permitted Acquisition) shall also be a Fixed Charge made on the last day of such 4 quarter period for purposes of calculating the Fixed Charge Coverage Ratio under this clause (ii) for any subsequent proposed payment to fund a Specific Transaction)), and (B) Aggregate Excess Availability after giving effect to such proposed payment and Specified Transaction, in each case, is not less than (1) in the case of a Specified Transaction consisting of a Permitted Acquisition or prepayment of Indebtedness, the greater of (X) 12.5% of the Line Cap, and (Y) $60,000,000, or (2) in the case of a Specified Transaction consisting of a Restricted Payment, a Permitted Investment of the type described in clause (s) of the definition thereof or a Permitted Intercompany Advance of the type described in clause (e) of the definition thereof, the greater of (X) 15% of the Line Cap, and (Y) $70,000,000, and

(c) Administrative Borrower has delivered a certificate to Agent certifying that all conditions described in clauses (a) and (b) above have been satisfied.

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

Pension Plan” means any Employee Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV or Section 302 of ERISA or Sections 412 or 430 of the IRC sponsored, maintained, or contributed to by any Loan Party or ERISA Affiliate or to which any Loan Party or ERISA Affiliate has any liability, contingent or otherwise.

Pensions Regulator” means the body corporate called the Pensions Regulator established under Part I of the Pensions Act 2004 (UK).

 

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Perfection Certificate” means a certificate in the form of Exhibit P-1 to this Agreement.

Permitted Acquisition” means any Acquisition made by Parent or a Subsidiary that is a Loan Party so long as:

(a) the proposed Acquisition is consensual,

(b) the Payment Conditions are satisfied,

(c) with respect to any Permitted Acquisition (or series of related Permitted Acquisitions) for which the purchase consideration payable (including deferred payment obligations) in connection therewith exceeds $100,000,000 in the aggregate, Borrowers have provided Agent with its due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person’s (or assets’) historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the one year period following the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,

(d) with respect to any Permitted Acquisition (or series of related Permitted Acquisitions) for which the purchase consideration payable (including deferred payment obligations) in connection therewith exceeds $100,000,000 in the aggregate, Borrowers have provided Agent with written notice of the proposed Acquisition at least 15 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than five Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent, and

(e) the assets being acquired (other than a de minimis amount of assets in relation to Parent’s and its Subsidiaries’ total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of the Loan Parties and their Subsidiaries or a business reasonably related thereto.

Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

Permitted Dispositions” means:

(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and leases or subleases of Real Property not useful in the conduct of the business of the Loan Parties and their Subsidiaries,

(b) sales of Inventory to buyers in the ordinary course of business,

 

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(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents,

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

(e) the granting of Permitted Liens,

(f) the sale or discount, in each case without recourse, of accounts receivable (other than Eligible Accounts) arising in the ordinary course of business, but only in connection with the compromise or collection thereof,

(g) any involuntary loss, damage or destruction of property,

(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

(i) the leasing or subleasing of assets of any Loan Party or its Subsidiaries in the ordinary course of business,

(j) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of Parent,

(k) (i) the lapse of registered patents, trademarks, copyrights and other intellectual property of any Loan Party or any of its Subsidiaries to the extent not economically desirable in the conduct of its business, or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

(l) the making of Restricted Payments that are expressly permitted to be made pursuant to this Agreement,

(m) the making of Permitted Investments,

(n) so long as no Event of Default would immediately result therefrom, transfers of assets (including Equity Interests) (i) from any US Loan Party or any of its Subsidiaries (other than any US Borrower) to a US Loan Party (other than Parent), (ii) from any Canadian Loan Party or any of its Subsidiaries (other than any Canadian Borrower) to a Canadian Loan Party, (iii) from any UK Loan Party or any of its Subsidiaries (other than any UK Borrower) to a UK Loan Party and (iv) from any Subsidiary of any Loan Party that is not a Loan Party to a Loan Party or any other Subsidiary of any Loan Party,

(o) transfers of properties that have been subject to a casualty event, to the insurer of such property or its designee as part of an insurance settlement,

 

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(p) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, sales, transfers or other dispositions by the Borrowers or any of their Subsidiaries of Equity Interest in joint ventures held by the Borrowers or any of their Subsidiaries,

(q) the Permitted Sale Leaseback,

(r) dispositions of Equipment or Real Property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property, or (ii) the proceeds of such disposition are promptly applied to the purchase price of such replacement property; provided, that to the extent the property being transferred constitutes Collateral, such replacement property shall constitute Collateral,

(s) dispositions of assets acquired by the Loan Parties and their Subsidiaries pursuant to a Permitted Acquisition consummated within 12 months of the date of the proposed disposition so long as (i) the consideration received for the assets to be so disposed is at least equal to the fair market value of such assets, (ii) the assets to be so disposed are not necessary or economically desirable in connection with the business of the Loan Parties and their Subsidiaries, and (iii) the assets to be so disposed are readily identifiable as assets acquired pursuant to the subject Permitted Acquisition,

(t) the disposition of Equity Interests in Dura Products, Inc., to another Loan Party; and

(u) sales or other dispositions of assets not otherwise permitted in clauses (a) through (t) above (other than sales or other dispositions of Accounts in connection with securitization or factoring arrangements), so long as (i) no Event of Default has occurred and is continuing or would immediately result therefrom, (ii) each such sale or disposition is in an arm’s-length transaction and the applicable Loan Party or its Subsidiary receives at least the fair market value of the assets so disposed, (iii) the consideration received by the applicable Loan Party or its Subsidiary consists of at least 75% cash and Cash Equivalents and is paid at the time of the closing of such sale or disposition, and (iv) the aggregate amount of the cash and non-cash proceeds received from all assets sold or disposed of pursuant to this clause (t) shall not exceed $25,000,000 (or, so long as after giving effect to such proposed sale or other disposition, no Covenant Trigger Event shall have occurred and be continuing (and no Covenant Testing Period is otherwise then in effect), $50,000,000) in any fiscal year of Parent (for this purpose, using the fair market value of property other than cash);

provided, that if, as of any date of determination, sales or dispositions by the Loan Parties during the period of time from the first day of the month in which such date of determination occurs until such date of determination, either individually or in the aggregate, involve $5,000,000 or more of assets included in the Borrowing Base (based on the fair market value of the assets so disposed) (the “Threshold Amount”), then Borrowers shall have, prior to consummation of the sale or disposition that causes the assets included in the Borrowing that are disposed of during such period to exceed the Threshold Amount, delivered to Agent an updated Borrowing Base Certificate that reflects the removal of the applicable assets from the Borrowing Base.

 

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Permitted Indebtedness” means:

(a) Indebtedness in respect of the Obligations other than Bank Product Obligations,

(b) Indebtedness as of the Closing Date set forth on Schedule 4.14 to this Agreement and any Refinancing Indebtedness in respect of such Indebtedness,

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness,

(d) Indebtedness arising in connection with the endorsement of instruments or other payment items for deposit,

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; and (iii) unsecured guarantees with respect to Indebtedness of any Loan Party or one of its Subsidiaries, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Indebtedness,

(f) unsecured Indebtedness of any Loan Party that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness does not mature prior to the date that is 6 months after the Maturity Date, (iv) such unsecured Indebtedness does not amortize until 6 months after the Maturity Date, (v) such unsecured Indebtedness does not provide for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 6 months after the Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to Agent and is otherwise on terms and conditions (including economic terms and absence of covenants) reasonably satisfactory to Agent,

(g) Acquired Indebtedness of any Person that becomes a Subsidiary after the date hereof, incurred prior to the time such Person becomes a Subsidiary, that is not created in contemplation of, or in connection with such Person becoming a Subsidiary, and that is not assumed or guaranteed by any other Subsidiary, in an amount not to exceed $25,000,000 outstanding at any one time,

(h) Indebtedness incurred in the ordinary course of business under performance, surety, statutory, or appeal bonds,

(i) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to any Loan Party or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year,

 

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(j) the incurrence by any Loan Party or its Subsidiaries of Indebtedness under Hedge Agreements that is incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with such Loan Party’s or such Subsidiary’s operations and not for speculative purposes,

(k) Indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or Cash Management Services,

(l) unsecured Indebtedness of any Loan Party owing to employees, former employees, former officers, directors, or former directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase or redemption by such Loan Party of the Equity Interests of Parent that has been issued to such Persons, so long as (i) no Event of Default has occurred and is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does not exceed $10,000,000, and (iii) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably acceptable to Agent,

(m) contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions,

(n) Indebtedness composing Permitted Investments, including Permitted Intercompany Advances,

(o) unsecured Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business,

(p) unsecured Indebtedness of any Loan Party or its Subsidiaries in respect of Earn-Outs owing to sellers of assets or Equity Interests to such Loan Party or its Subsidiaries that is incurred in connection with the consummation of one or more Permitted Acquisitions so long as such unsecured Indebtedness is on terms and conditions reasonably acceptable to Agent,

(q) Indebtedness in an aggregate outstanding principal amount not to exceed $50,000,000 at any time outstanding for all Subsidiaries of Parent that are not Loan Parties; provided, that such Indebtedness is not directly or indirectly recourse to any of the Loan Parties or of their respective assets,

(r) accrual of interest, accretion or amortization of original issue discount, or the payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,

(s) Indebtedness of the Borrowers (and guarantees thereof by Guarantors) evidenced by term loans, bonds, debentures, notes or other similar instruments (including extensions, refinancings, refundings, replacements and renewals of thereof); provided that, (i) the scheduled maturity date of such Debt shall not be earlier than one hundred eighty days after the Maturity Date, (ii) no Event of Default shall have occurred and be continuing or shall result

 

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therefrom, (iii) at the time of incurrence thereof and after giving pro forma effect thereto and the use of proceeds thereof, the Leverage Ratio, calculated on a pro forma basis as of the most recently ended fiscal quarter or year, as applicable, for which Agent has received financial statements pursuant to Section 5.1 on or prior to the incurrence of such Indebtedness, is no greater than 4.00 to 1.00 (or 5.00 to 1.00, but only if at the time of incurrence thereof and after giving pro forma effect thereto and the use of proceeds thereof, the Fixed Charge Coverage Ratio of the Loan Parties and their Subsidiaries, calculated on a pro forma basis as of the most recently ended fiscal quarter or year, as applicable, for which Agent has received financial statements pursuant to Section 5.1 on or prior to the incurrence of such Indebtedness, is equal to or greater than 1.50:1.00), (iv) with respect to any secured Indebtedness incurred pursuant to this clause (s), the Liens securing such Indebtedness shall be subordinated and junior in priority to Agent’s Liens pursuant to an intercreditor agreement in form and substance reasonably satisfactory to Agent, (v) such Indebtedness shall not have any amortization or other requirement to purchase, redeem, retire, defease or otherwise make any payment in respect thereof, other than at scheduled maturity thereof and mandatory prepayments which are customary with respect to such type of Indebtedness and that are triggered upon change in control and sale of all or substantially all assets and certain other material asset sales, and (vi) the agreements and instruments governing such Indebtedness shall not contain (A) any affirmative or negative covenants that are, taken as a whole, materially more restrictive than those set forth in this Agreement; provided that the inclusion of any financial covenant that is customary with respect to such type of Indebtedness and that is not found in this Agreement shall not be deemed to be more restrictive for purposes of this clause (A), (B) any restrictions on the ability of Parent or any Subsidiary of the Parent to guarantee the Obligations, provided that a requirement that any such Subsidiary also guarantee such Indebtedness shall not be deemed to be a violation of this clause (B), (C) any restrictions on the ability of Parent or any Subsidiary of Parent to pledge Collateral as collateral security for the Obligations, or (D) any restrictions on the ability of Parent or any Subsidiary of Parent to incur Indebtedness under this Agreement or any other Loan Document other than a restriction as to the outstanding principal amount of such Indebtedness in excess of 110% of the sum of aggregate Maximum Revolver Amount plus the Available Increase Amount, in each case, as in effect on the initial issuance date of such Indebtedness,

(t) Indebtedness incurred in connection with Permitted Sale Leaseback transaction,

(u) Indebtedness consisting of deferred compensation, severance, pension or health and welfare retirement benefits for current and former employees incurred in the ordinary course of business and consistent with past practices,

(v) indemnities given and warranties issued in the ordinary course of business and consistent with past practices, and

(w) any other Indebtedness incurred by any Loan Party or any of its Subsidiaries in an aggregate outstanding amount not to exceed the greater of (a) $50,000,000 at any one time, and (b) 1.5% of the consolidated total assets (calculated in accordance with GAAP) of the Parent and its Subsidiaries at the time of the incurrence of such Indebtedness; provided, that any with respect to any secured Indebtedness incurred pursuant to this clause (w), the holder of such secured Indebtedness (or an agent or representative in respect thereof) shall have entered into an intercreditor agreement in form and substance reasonably satisfactory to Agent.

 

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Permitted Intercompany Advances” means loans and other Investments made by (a) a Loan Party to another Loan Party (other than to Parent, and other than by a US Loan Party to a Canadian Loan Party or a UK Loan Party), (b) a Subsidiary of a Loan Party that is not a Loan Party to another Subsidiary of a Loan Party that is not a Loan Party, (c) a Subsidiary of a Loan Party that is not a Loan Party to a Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement, (d) a US Loan Party to a Canadian Loan Party or a UK Loan Party, so long as the aggregate amount of all such loans and other Investments (by type, not by the borrower) does not exceed $15,000,000 outstanding at any one time, and (e) a Loan Party to a Subsidiary of a Loan Party that is not a Loan Party or a US Loan Party to a Canadian Loan Party or a UK Loan Party (in excess of the amount described in the foregoing clause (d)) so long as the Payment Conditions have been satisfied.

Permitted Investments” means:

(a) Investments in cash and Cash Equivalents,

(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

(c) advances made in connection with purchases of goods or services in the ordinary course of business,

(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an account debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,

(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on Schedule P-1 to this Agreement,

(f) guarantees permitted under the definition of Permitted Indebtedness,

(g) Permitted Intercompany Advances,

(h) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

(i) deposits of cash made in the ordinary course of business to secure performance of operating leases,

(j) (i) non-cash loans and advances to employees, officers, and directors of a Loan Party or any of its Subsidiaries for the purpose of purchasing Equity Interests in Parent so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Parent, and (ii) loans and advances to employees and officers of a Loan Party or any of its Subsidiaries in the ordinary course of business for any other business purpose and in an aggregate amount not to exceed $10,000,000 at any one time,

 

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(k) Permitted Acquisitions,

(l) Investments in the form of capital contributions and the acquisition of Equity Interests made by any US Loan Party in any other US Loan Party (other than capital contributions to or the acquisition of Equity Interests of Parent) or by any Canadian Loan Party in any other Canadian Loan Party or by any UK Loan Party in any other UK Loan Party,

(m) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to obligations permitted under clause (j) of the definition of Permitted Indebtedness,

(n) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

(o) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

(p) Investments in the form of Restricted Payments permitted by Section 6.7 of this Agreement,

(q) Investments in the ordinary course of business consisting of UCC Article 3 endorsements for collection or deposits and UCC Article 4 customary trade arrangements with customers consistent with past practices,

(r) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $15,000,000 (or, so long as after giving effect to such proposed Investment, no Covenant Trigger Event shall have occurred and be continuing (and no Covenant Testing Period is otherwise then in effect), $25,000,000) during the term of this Agreement,

(s) other Investments (other than Acquisitions) so long as the Payment Conditions are satisfied, and

(t) Investments consisting of non-cash consideration received in connection with Permitted Dispositions, so long as the non-cash consideration received in connection with any Permitted Disposition does not exceed 25% of the total consideration received in connection with such Permitted Disposition.

Permitted Liens” means:

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

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(b) Liens for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet delinquent, or (ii) do not have priority over Agent’s Liens and the underlying taxes, assessments, or charges or levies are the subject of Permitted Protests,

(c) judgment Liens arising solely as a result of the existence of judgments, orders, requirements to pay issued by a Canadian Governmental Authority or awards that do not constitute an Event of Default under Section 8.3 of this Agreement,

(d) Liens set forth on Schedule P-2 to this Agreement; provided, that to qualify as a Permitted Lien, any such Lien described on Schedule P-2 to this Agreement shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

(e) the interests of lessors under operating leases and non-exclusive licensors under license agreements,

(f) purchase money Liens on fixed assets or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the fixed asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the fixed asset purchased or acquired or any Refinancing Indebtedness in respect thereof,

(g) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers (or deposits made to obtain the release of such Liens), incurred or made in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,

(h) Liens arising by operation of law in connection with Parent’s and its Subsidiaries obligations in connection with worker’s compensation or other unemployment insurance, old age benefits, social security obligations, taxes, assessments, statutory obligations or other like charges,

(i) Liens arising by operation of law in connection with Parent’s and its Subsidiaries obligations in connection with the making or entering into of bids, tenders, trade contracts, or leases in the ordinary course of business and not in connection with the borrowing of money,

(j) Liens on amounts deposited to secure Parent’s and its Subsidiaries reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

(k) encumbrances, easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any property or rights-of-way of a Person for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines, removal of gas, oil, coal, metals, steam, minerals, timber or other natural resources, and other like purposes, or for the joint or common use of real property, rights-of-way, facilities or equipment, or defects, irregularity and deficiencies in title of any property or rights-of-way; provided, that in each case the obligation secured is not Indebtedness and is not overdue or, if overdue, is being contested in good faith by appropriate proceedings and reserves in conformity with GAAP have been provided therefore,

 

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(l) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

(m) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such Deposit Accounts in the ordinary course of business,

(o) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

(q) Liens solely on any cash earnest money deposits made by a Loan Party or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

(r) Liens assumed by any Loan Party or its Subsidiaries in connection with a Permitted Acquisition that secure Acquired Indebtedness that is Permitted Indebtedness,

(s) Liens securing Indebtedness permitted pursuant to clauses (s) and (t) of the definition of Permitted Indebtedness; provided, that any such Liens shall be subordinated and junior in priority to Agent’s Liens, pursuant to an intercreditor agreement in form and substance reasonably satisfactory to Agent,

(t) good faith deposits, pledges or other Liens in connection with (or to obtain or support letters of credit in connection with) bids, performance bonds, contracts or leases to which the Borrowers or their Subsidiaries are a party in the ordinary course of business; provided, that in each case the obligation secured is not Indebtedness and is not overdue or, if overdue, is being contested in good faith by appropriate proceedings and reserves in conformity with GAAP have been provided therefor,

(u) rights reserved to or vested in any municipality or governmental, statutory or public authority by the terms of any right, power, franchise, grant, license or permit, or by any provision of law, to terminate such right, power, franchise, grant, license or permit or to purchase, condemn, expropriate or recapture or to designate a purchaser of any of the property of a Person,

 

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(v) rights reserved to or vested in any municipality or governmental, statutory or public authority to control, regulate or use any property of a Person,

(w) zoning, planning and Environmental Laws and ordinances and municipal regulations, which do not, in any case, materially detract from the value of such property or impair the use thereof in the ordinary course of business, and

(x) other Liens which do not secure Indebtedness for borrowed money or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $10,000,000.

Permitted Protest” means the right of any Loan Party or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien or Canadian equivalent, including a requirement to pay issued by a Canadian Governmental Authority), or rental payment; provided, that (a) a reserve with respect to such obligation is established on such Loan Party’s or its Subsidiaries’ books and records in such amount as is required under GAAP, and (b) any such protest is instituted promptly and prosecuted diligently by such Loan Party or its Subsidiary, as applicable, in good faith.

Permitted Purchase Money Indebtedness” means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred after the Closing Date and at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of $25,000,000.

Permitted Sale Leaseback” means an arrangement, directly or indirectly, with any Person relating to the Real Estate located at 7402 North Eldridge Parkway, Houston, Texas 77041, whereby the applicable Borrower sells or transfers such property to a Person and thereafter rents or leases such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred; provided that (a) no Event of Default shall have occurred or be continuing or would result therefrom, (b) no less than 75% of the aggregate consideration received in such Permitted Sale Leaseback shall be in cash and Cash Equivalents, and the Net Cash Proceeds therefrom shall be remitted to Agent in accordance with Section 2.4(e) hereof, (c) the applicable Borrower shall receive at least fair market value (as determined by such Borrower in good faith) for any property disposed of in such Permitted Sale Leaseback, (d) such transaction is pursuant to a bona-fide, arms-length transaction with a Person that is not an Affiliate of any Loan Party, and (e) the applicable Loan Party uses its commercially reasonable efforts to insure that the Agent obtains a Collateral Access Agreement with respect to such parcel of Real Property leased back; provided, that if such Collateral Access Agreement is not obtained, Agent may establish a Landlord Reserve with respect to such Real Property.

Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

 

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Platform” has the meaning specified therefor in Section 17.9(c) of this Agreement.

Post-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of this Agreement.

PPSA” means the Personal Property Security Act (Alberta) and any successor statutes, together with regulations thereunder, as in effect from time to time; provided that, if attachment, perfection or priority of Agent’s Liens in any Collateral are governed by the personal property security laws of any jurisdiction in Canada other than Alberta (including the Civil Code of Québec), PPSA shall mean those personal property security laws in such other jurisdiction for the purposes of the provisions hereof relating to such attachment, perfection or priority and for definitions related to such provision, and any successor statutes thereto, together with any regulations thereunder, in each case as in effect from time to time. References to sections of the PPSA shall be construed to also refer to any successor sections.

Pre-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of this Agreement.

Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Parent’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

Protected Party” means a Lender which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Loan Document.

Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make all or a portion of the US Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the US Revolving Loans, and with respect to all other computations and other matters related to the US Revolver Commitments or the US Revolving Loans, the percentage obtained by dividing (i) the US Revolving Loan Exposure of such Lender, by (ii) the aggregate US Revolving Loan Exposure of all Lenders,

(b) with respect to a Lender’s obligation to make all or a portion of the Canadian Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the Canadian Revolving Loans, and with respect to all other computations and other matters related to the Canadian Revolver Commitments or the Canadian Revolving Loans, the Dollar Equivalent of the percentage obtained by dividing (i) the Canadian Revolving Loan Exposure of such Lender by (ii) the aggregate Canadian Revolving Loan Exposure of all Lenders,

 

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(c) with respect to a Lender’s obligation to make all or a portion of the UK Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the UK Revolving Loans, and with respect to all other computations and other matters related to the UK Revolver Commitments or the UK Revolving Loans, the Dollar Equivalent of the percentage obtained by dividing (i) the UK Revolving Loan Exposure of such Lender by (ii) the aggregate UK Revolving Loan Exposure of all Lenders,

(d) with respect to a Lender’s obligation to participate in the US Letters of Credit, with respect to such Lender’s obligation to reimburse US Issuing Lenders, and with respect to such Lender’s right to receive payments of the applicable Letter of Credit Fees, and with respect to all other computations and other matters related to the US Letters of Credit, the percentage obtained by dividing (i) the US Revolving Loan Exposure of such Lender, by (ii) the aggregate US Revolving Loan Exposure of all Lenders; provided, that if all of the US Revolving Loans have been repaid in full and all US Revolver Commitments have been terminated, but US Letters of Credit remain outstanding, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the US Letter of Credit Exposure of such Lender, by (B) the US Letter of Credit Exposure of all Lenders,

(e) with respect to a Lender’s obligation to participate in the Canadian Letters of Credit, with respect to such Lender’s obligation to reimburse Canadian Issuing Lender, and with respect to such Lender’s right to receive payments of the applicable Letter of Credit Fees, and with respect to all other computations and other matters related to the Canadian Letters of Credit, the Dollar Equivalent of the percentage obtained by dividing (i) the Canadian Revolving Loan Exposure of such Lender by (ii) the aggregate Canadian Revolving Loan Exposure of all Lenders; provided, that if all of the Canadian Revolving Loans have been repaid in full and all Canadian Revolver Commitments have been terminated, but Canadian Letters of Credit remain outstanding, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the Canadian Letter of Credit Exposure of such Lender, by (B) the Canadian Letter of Credit Exposure of all Lenders,

(f) with respect to a Lender’s obligation to participate in the UK Letters of Credit, with respect to such Lender’s obligation to reimburse UK Issuing Lender, and with respect to such Lender’s right to receive payments of the applicable Letter of Credit Fees, and with respect to all other computations and other matters related to the UK Letters of Credit, the Dollar Equivalent of the percentage obtained by dividing (i) the UK Revolving Loan Exposure of such Lender by (ii) the aggregate UK Revolving Loan Exposure of all Lenders; provided, that if all of the UK Revolving Loans have been repaid in full and all UK Revolver Commitments have been terminated, but UK Letters of Credit remain outstanding, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the UK Letter of Credit Exposure of such Lender, by (B) the UK Letter of Credit Exposure of all Lenders, and

(g) with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7 of this Agreement), the Dollar Equivalent of the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 13.1; provided, that if all of the Loans have been repaid in full and all Commitments have been terminated, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of Credit Exposure of all Lenders.

 

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Protective Advances” means the US Protective Advances, UK Protective Advances and/or the Canadian Protective Advances, as the context requires.

Public Lender” has the meaning specified therefor in Section 17.9(c) of this Agreement.

Qualified Equity Interests” means and refers to any Equity Interests issued by Parent (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

Qualifying Lender” means:

(a) a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document and is:

(i) a Lender:

(A) which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Loan Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

(B) in respect of an advance made under a Loan Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made, and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

(ii) a Lender which is:

(A) a company resident in the United Kingdom for United Kingdom tax purposes;

(B) a partnership, each member of which is:

i. a company so resident in the United Kingdom; or

ii. a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

(C) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or

 

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(iii) a Treaty Lender; or

(b) a Lender which is a building society (as defined for the purposes of section 880 of the ITA) making an advance under a Loan Document.

Real Property” means any estates or interests in real or Scottish heritable property now owned or hereafter acquired by any Loan Party or one of its Subsidiaries and the improvements thereto.

Real Property Collateral” means (a) the Real Property identified on Schedule R-1 to this Agreement, and (b) any Real Property hereafter acquired by any Loan Party or one of its Subsidiaries with a fair market value in excess of $12,500,000.

Receivable Reserves” means, as of any date of determination, without duplication, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(e), to establish and maintain (including Landlord Reserves for books and records locations and reserves for rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts, the Maximum Revolver Amount, the UK Maximum Revolver Amount or the Canadian Maximum Revolver Amount.

Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

Reference Period” has the meaning set forth in the definition of EBITDA.

Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as:

(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

(b) such refinancings, renewals, or extensions do not result in a shortening of the final stated maturity or the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness,

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended,

 

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(e) if the Indebtedness that is refinanced, renewed or extended was unsecured, such refinancing, renewal or extension shall be unsecured, and

(f) if the Indebtedness that is refinanced, renewed, or extended was secured (i) such refinancing, renewal, or extension shall be secured by substantially the same or less collateral as secured such refinanced, renewed or extended Indebtedness on terms no less favorable to Agent or the Lender Group and (ii) the Liens securing such refinancing, renewal or extension shall not have a priority more senior than the Liens securing such Indebtedness that is refinanced, renewed or extended.

Register” has the meaning set forth in Section 13.1(h) of this Agreement.

Registered Loan” has the meaning set forth in Section 13.1(h) of this Agreement.

Related Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

Remedial Action” means all actions required by Environmental Laws taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

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

Report” has the meaning specified therefor in Section 15.16 of this Agreement.

Required Lenders” means, at any time, Lenders having or holding more than 50% of the sum of the aggregate Dollar Equivalent Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders, and (ii) at any time there are two or more Lenders (who are not Affiliates of one another or Defaulting Lenders), “Required Lenders” must include at least two Lenders (who are not Affiliates of one another).

Reserves” means, as of any date of determination, Inventory Reserves, Receivables Reserves, Bank Product Reserves, Canadian Priority Payables Reserves and those other reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(e), to establish and maintain (including reserves with respect to (a) sums that any Loan Party or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (b) currency

 

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fluctuations, (c) amounts owing by any Loan Party or its Subsidiaries to any Person to the extent secured by a Lien on, or trust or deemed trust over, any of the Collateral (other than a Permitted Lien), which Lien, trust or deemed trust, in the Permitted Discretion of Agent likely would have a priority superior to the Agent’s Liens (such as Liens, trusts or deemed trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts or deemed trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral, (d) amounts that could become due to the administrator of any Insolvency Proceeding of a UK Loan Party which would have priority over Agent’s fixed or floating charge on Collateral, and (e) amounts that could become due to any unsecured creditors in any Insolvency Proceeding of a UK Loan Party which would have priority over Agent’s fixed or floating charge on the Collateral but in any event not to exceed any statutory maximum prescribed amount from time to time) with respect to the US Borrowing Base, the UK Borrowing Base, the Canadian Borrowing Base, the Maximum Revolver Amount, the UK Maximum Revolver Amount or the Canadian Maximum Revolver Amount.

Restricted Payment” means (a) any declaration or payment of any dividend or the making of any other payment or distribution, directly or indirectly, on account of Equity Interests issued by Parent or any of its Subsidiaries (including any payment in connection with any merger, amalgamation or consolidation involving Parent) or to the direct or indirect holders of Equity Interests issued by Parent or any of its Subsidiaries in their capacity as such (other than dividends or distributions payable in Qualified Equity Interests issued by Parent or any of its Subsidiaries), or (b) any purchase, redemption, making of any sinking fund or similar payment, or other acquisition or retirement for value (including in connection with any merger, amalgamation or consolidation involving Parent) any Equity Interests issued by Parent or any of its Subsidiaries, or (c) any making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of Parent now or hereafter outstanding.

Revaluation Date” means (a) with respect to any Revolving Loan denominated in Canadian Dollars or Sterling, each of the following: (i) each date of a Borrowing of such Revolving Loan, (ii) each date of a continuation of such Revolving Loan pursuant to Section 2.12, and (iii) such additional dates as Agent shall determine or the Required Lenders shall require, (b) with respect to any Letter of Credit denominated in Canadian Dollars or Sterling, each of the following: (i) each date of issuance of such Letter of Credit, (ii) each date of an amendment of such Letter of Credit having the effect of increasing the amount thereof, (iii) each date of any payment by an Issuing Lender under such Letter of Credit, and (iv) such additional dates as Agent or an Issuing Lender shall determine or the Required Lenders shall require, and (c) with respect to any other Obligations denominated in Canadian Dollars or Sterling, each date as Agent shall determine unless otherwise prescribed in this Agreement or any other Loan Documents.

Revolver Commitment” means the US Revolver Commitments, the UK Revolver Commitments and/or the Canadian Revolver Commitments, as the context requires.

Revolver Usage” means the US Revolver Usage, the UK Revolver Usage and/or the Canadian Revolver Usage, as the context requires.

 

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Revolving Lender” means a Lender that has a Revolving Loan Exposure or Letter of Credit Exposure.

Revolving Loan Exposure” means the US Revolving Loan Exposure, the UK Revolver Exposure and/or the Canadian Revolving Loan Exposure, as the context requires.

Revolving Loans” means a US Revolving Loan, a UK Revolving Loan and/or a Canadian Revolving Loan, as the context requires.

Sanctioned Entity” means (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country or territory sanctions program administered and enforced by OFAC or other relevant Governmental Authority.

Sanctioned Person” means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by OFAC, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations Security Council, (c) the Government of Canada, (d) the European Union or any European Union member state, (e) Her Majesty’s Treasury of the United Kingdom, or (f) any other Governmental Authority with jurisdiction over any Loan Party or any of their respective Subsidiaries or Affiliates.

S&P” has the meaning specified therefor in the definition of Domestic Cash Equivalents.

SEC” means the United States Securities and Exchange Commission and any successor thereto.

Securities Account” means a securities account (as that term is defined in the Code).

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

 

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Security Agreement” means the US Security Agreement, one of the UK Security Documents and/or the Canadian Security Agreement.

Settlement” has the meaning specified therefor in Section 2.3(e)(i) of this Agreement.

Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of this Agreement.

Solvent” means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s assets, (b) such Person is not engaged or about to engage in a transaction for which the remaining assets of such Person are unreasonably small in relation to the transaction or for which the property remaining with such Person is an unreasonably small capital, (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” or not “insolvent” or “deemed unable to pay its debts”, as applicable within the meaning given those terms and similar terms under applicable laws relating to bankruptcy, insolvency, fraudulent transfers and conveyances. For purposes of subclauses (a) to (c) of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

Specified Event of Default” means an Event of Default under any of Sections 8.1, 8.2(a)(i) (solely as the result of a failure to deliver any of the items described in, and in accordance with, clauses (a), (b), (c) or (d) of Schedule 5.1), 8.2(a)(iii), 8.4, 8.5 or 8.12.

Specified State” means any one of (a) the United States, (b) Canada and (c) the United Kingdom.

Specified Transaction” means, any Permitted Acquisition, prepayment of Indebtedness, Permitted Intercompany Advance of the type described in clause (e) of the definition thereof, Permitted Investment of the type described in clause (s) of the definition thereof or Restricted Payment (or declaration of any prepayment or Restricted Payment).

Spot Rate” means, for a currency, the rate determined by Agent to be the rate quoted by Wells Fargo acting in such capacity as the spot rate for the purchase by Wells Fargo of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided, that Agent may obtain such spot rate from another financial institution designated by Agent if Wells Fargo acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

 

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Standard Letter of Credit Practice” means, for each Issuing Lender, any domestic or foreign law or letter of credit practices applicable in the city in which such Issuing Lender issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.

Sterling” or “£” means the lawful currency of the United Kingdom.

Sterling Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in Sterling as determined by Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date as determined by Agent) for the purchase of Sterling with Dollars.

Subsidiary” of a Person means a corporation, company, partnership, limited liability company, unlimited liability company or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

Supermajority Lenders” means, at any time, Revolving Lenders having or holding more than 66 2/3% of the aggregate Dollar Equivalent of Revolving Loan Exposure of all Revolving Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Supermajority Lenders, and (ii) at any time there are two or more Revolving Lenders (who are not Affiliates of one another), “Supermajority Lenders” must include at least two Revolving Lenders (who are not Affiliates of one another or Defaulting Lenders).

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

Swing Lender” means the US Swing Lender, the UK Swing Lender and/or the Canadian Swing Lender, as the context requires.

Swing Loan” means the US Swing Loan, the UK Swing Loan and/or the Canadian Swing Loan, as the context requires.

Swing Loan Exposure” means the US Swing Exposure, the UK Swing Loan Exposure and/or the Canadian Swing Exposure, as the context requires.

Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

Tax Confirmation” means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document is either:

 

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(a) a company resident in the United Kingdom for United Kingdom tax purposes; or

(b) a partnership each member of which is:

(i) a company so resident in the United Kingdom; or

(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.

Tax Credit” means a credit against, relief or remission for, or repayment of, any Taxes.

Tax Deduction” means a deduction or withholding for or on account of Taxes from a payment under a Loan Document.

Tax Lender” has the meaning specified therefor in Section 14.2(a) of this Agreement.

Tax Payment” means either the increase in a payment made by a Loan Party to a Lender under Section 16.5 or a payment under Section 16.6.

Treaty” has the meaning specified therefore in the definition of “Treaty State”.

Treaty Lender” means a Lender which:

(a) is treated as a resident of a Treaty State for the purposes of the Treaty;

(b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loans is effectively connected; and

(c) qualifies for full exemption from UK income tax on payments of interest to or for the account of the Lender or Participant pursuant to any Loan Document, subject to the completion of necessary procedural formalities.

Treaty State” means a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.

 

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UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any version or revision thereof accepted by an Issuing Lender for use.

UK Availability” means, as of any date of determination, the Dollar Equivalent amount that UK Borrowers are entitled to borrow as UK Revolving Loans under Section 2.1(c) of the Agreement (after giving effect to the then outstanding UK Revolver Usage, Canadian Revolver Usage and US Revolver Usage).

UK Bank Product” means any one or more of the following financial products or accommodations extended to a UK Loan Party by a Bank Product Provider: (a) credit cards (including commercial credit cards (including so-called “purchase cards”, “procurement cards” or “P-cards”)), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

UK Bank Product Agreements” means those agreements entered into from time to time by a UK Loan Party with a Bank Product Provider in connection with the obtaining of any of the UK Bank Products.

UK Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by UK Loan Parties to any Bank Product Provider pursuant to or evidenced by a UK Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all UK Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the UK Bank Products provided by such Bank Product Provider to UK Loan Parties; provided, in order for any item described in clauses (a), (b), or (c) above, as applicable, to constitute “UK Bank Product Obligations”, if the applicable Bank Product Provider is any Person other than Wells Fargo or its Affiliates, then the applicable UK Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Agreement within 10 days after the date of the provision of the applicable UK Bank Product to a UK Loan Party.

UK Bank Product Reserves” means, as of any date of determination, those reserves, without duplication of any other reserve, that Agent deems necessary or appropriate in its Permitted Discretion to establish (based upon the Bank Product Providers’ reasonable determination of the liabilities and obligations of UK Loan Parties in respect of UK Bank Product Obligations) in respect of UK Bank Products then provided or outstanding.

UK Borrowers” has the meaning specified therefor in the preamble to the Agreement.

UK Borrowing” means a borrowing consisting of UK Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by UK Swing Lender in the case of a UK Swing Loan, or by Agent in the case of a UK Extraordinary Advance.

 

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UK Borrowing Base” means, as of any date of determination, the Dollar Equivalent amount of:

(a) 90% of the amount of Eligible Accounts of each UK Loan Party owing by Account Debtors that are rated (or whose parent is rated) Baa3 or higher from Moody’s or BBB- or higher from S&P, less the amount, if any, of the UK Dilution Reserve attributable to such Eligible Accounts, plus

(b) 85% of the amount of Eligible Accounts of each UK Loan Party owing by Account Debtors other than those described in the foregoing clause (a), less the amount, if any, of the UK Dilution Reserve attributable to such Eligible Accounts, plus

(c) the lesser of (i) the product of 70% multiplied by the value (calculated at the lower of cost or market on a basis consistent with UK Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each UK Loan Party at such time, and (ii) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Acceptable Appraisal of Inventory, multiplied by the value (calculated at the lower of cost or market on a basis consistent with UK Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each UK Loan Party (such determination may be made as to different categories of Eligible Finished Goods Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

(d) the amount by which the US Borrowing Base at such time exceeds the sum of US Revolver Usage plus Canadian Revolver Usage predicated on clause (d) of the definition of Canadian Borrowing Base at such time, minus

(e) without duplication, the aggregate amount of Receivables Reserves, Bank Product Reserves, Inventory Reserves, and other Reserves, in each case if any, established by Agent from time to time under Section 2.1(e) of this Agreement.

UK Designated Account” means the UK Deposit Account of a UK Borrower identified on Schedule D-2 to the Agreement (or such other Deposit Account of a UK Borrower located at UK Designated Account Bank that has been designated as such, in writing, by a UK Borrower to Agent).

UK Designated Account Bank” has the meaning specified therefor in Schedule D-2 to the Agreement (or such other bank that is located within the United Kingdom that has been designated as such, in writing, by a UK Borrower to Agent).

UK Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior 12 months, that is the result of dividing (a) the Dollar Equivalent amount of bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to UK Borrowers’ Accounts during such period, by (b) the Dollar Equivalent amount of UK Borrowers’ billings with respect to Accounts during such period.

UK Dilution Reserve” means, as of any date of determination, an amount, without duplication of any other reserve, sufficient to reduce the advance rate against Eligible Accounts of UK Loan Parties by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

 

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UK Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of the Agreement.

UK Floating Rate” means, for any day, the rate of interest equal to the LIBOR Rate then in effect for delivery for a one month period, plus 1.00 percentage point.

UK Guarantor” means (a) each Subsidiary of Parent (other than an Immaterial Subsidiary) organized under the laws of or incorporated in any jurisdiction in the United Kingdom, that is or becomes a guarantor of all or any part of the Foreign Obligations and (b) each other Person that guaranties all or a part of the Foreign Obligations pursuant to the UK Security Documents.

UK Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of any UK Loan Party arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

UK Issuing Lender” means Wells Fargo and up to three other Lenders designated in writing to, and consented to by, the Agent (such consent not to be unreasonably withheld, conditioned or delayed) by the Administrative Borrower that agree, in such Lender’s sole discretion, to become a UK Issuing Lender for the purpose of issuing UK Letters of Credit.

UK Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by UK Issuing Lender for the account of a UK Borrower.

UK Letter of Credit Disbursement” means a payment made by UK Issuing Lender pursuant to a UK Letter of Credit.

UK Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the UK Letter of Credit Usage on such date.

UK Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding UK Letters of Credit.

UK Loan Account” has the meaning specified therefor in Section 2.9 of the Agreement.

UK Loan Party” means any UK Borrower or any UK Guarantor organized under the laws of the United Kingdom.

UK Maximum Revolver Amount” means $40,000,000, decreased by the amount of reductions in the UK Revolver Commitments made in accordance with Sections 2.4(c) of the Agreement.

 

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UK Non-Bank Lender” means where a Lender becomes a party after the Closing Date, an assignee which gives a Tax Confirmation in the Assignment and Acceptance which it executes on becoming a party.

UK Obligations” means (a) all loans (including UK Revolving Loans (inclusive of UK Extraordinary Advances and UK Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities (including all amounts charged to the UK Loan Account pursuant to the Agreement), obligations (including indemnification obligations) of any UK Loan Party, fees (including the fees provided for in the Fee Letter) of any UK Loan Party, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) of any UK Loan Party, guaranties of any UK Loan Party, and all covenants and duties of any other kind and description owing by any UK Loan Party arising out of, under, pursuant to, in connection with, or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any UK Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, (b) all debts, liabilities, or obligations (including reimbursement and indemnification obligations, irrespective of whether contingent) owing by any UK Borrower or any other UK Loan Party to UK Issuing Lender now or hereafter arising from or in respect of a UK Letters of Credit, and (c) all UK Bank Product Obligations; provided, that UK Obligations shall not include Excluded Swap Obligations. Without limiting the generality of the foregoing, the UK Obligations under the Loan Documents include the obligation to pay (i) the principal of the UK Revolving Loans, (ii) interest accrued on the UK Revolving Loans, (iii) the amount necessary to reimburse UK Issuing Lender for amounts paid or payable pursuant to UK Letters of Credit, (iv) Letter of Credit commissions, charges, expenses, and fees, in each case in respect of UK Letters of Credit, (v) Lender Group Expenses of any UK Loan Party, (vi) fees payable by any UK Loan Party under the Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any UK Loan Party under any Loan Document (excluding Excluded Swap Obligations). Any reference in the Agreement or in the Loan Documents to the UK Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

UK Overadvance” means, as of any date of determination, that the UK Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11C.

UK Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of the Agreement.

UK Revolver Commitment” means, with respect to each Revolving Lender, its UK Revolver Commitment, and, with respect to all Revolving Lenders, their UK Revolver Commitments, in each case as set forth beside such Revolving Lender’s name under the applicable heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

 

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UK Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding UK Revolving Loans (inclusive of UK Swing Loans and UK Protective Advances), plus (b) the amount of the UK Letter of Credit Usage.

UK Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the UK Revolver Commitments, the amount of such Lender’s UK Revolver Commitment, and (b) after the termination of the UK Revolver Commitments, the aggregate outstanding principal amount of the UK Revolving Loans of such Lender.

UK Revolving Loans” has the meaning specified therefor in Section 2.1(c) of the Agreement.

UK Security Documents” means (i) one or more guarantees and debentures in favor of Agent charging all present and after-acquired property and proceeds thereof of the UK Loan Parties, (ii) one or more standard securities, assignations and/or charges in favor of Agent securing property and proceeds thereof as are located in Scotland or otherwise governed by Scots law, of the UK Loan Parties (iii) one or more share pledges in favor of Agent over Scottish shares of UK Loan Parties, (iv) one or more share mortgages in favor of Agent over shares of the UK Loan Parties, and (v) all other agreements, instruments and documents granting charges or security interests in or upon the assets of the UK Loan Parties to secure all or any portion of the Obligations.

UK Swing Lender” means Wells Fargo or any other Lender that, at the request of a UK Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the UK Swing Lender under Section 2.3(b) of the Agreement.

UK Swing Loan” has the meaning specified therefor in Section 2.3(b) of the Agreement.

UK Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the UK Swing Loans on such date.

Unfinanced Capital Expenditures” means Capital Expenditures (a) not financed with the proceeds of any incurrence of Indebtedness (other than the incurrence of any Revolving Loans), the proceeds of any sale or issuance of Equity Interests or equity contributions, the proceeds of any asset sale (other than the sale of Inventory in the ordinary course of business) or any insurance proceeds, and (b) that are not reimbursed by a third person (excluding any Loan Party or any of its Affiliates) in the period such expenditures are made pursuant to a written agreement.

United Arab Emirates Dirham” means the legal tender of the United Arab Emirates.

 

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United Kingdom” and “UK” means the United Kingdom of Great Britain and Northern Ireland, but, for the avoidance of doubt, excluding the Channel Islands and the Isle of Man.

United States” means the United States of America.

Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of this Agreement.

US Availability” means, as of any date of determination, the amount that US Borrowers are entitled to borrow as US Revolving Loans under Section 2.1(a) of the Agreement (after giving effect to the then outstanding US Revolver Usage, UK Revolver Usage and Canadian Revolver Usage).

US Bank Product” means any one or more of the following financial products or accommodations extended to a Parent or its Subsidiaries (other than a Canadian Loan Party or a UK Loan Party) by a Bank Product Provider: (a) credit cards (including commercial credit cards (including so-called “purchase cards”, “procurement cards” or “P-cards”)), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

US Bank Product Agreements” means those agreements entered into from time to time by a Parent or its Subsidiaries (other than a Canadian Loan Party or a UK Loan Party) with a Bank Product Provider in connection with the obtaining of any of the US Bank Products.

US Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by a Parent or its Subsidiaries (other than a Canadian Loan Party or a UK Loan Party) to any Bank Product Provider pursuant to or evidenced by a US Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all US Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the US Bank Products provided by such Bank Product Provider to a Parent or its Subsidiaries (other than a Canadian Loan Party or a UK Loan Party); provided, in order for any item described in clauses (a), (b) or (c) above, as applicable, to constitute “US Bank Product Obligations”, if the applicable Bank Product Provider is any Person other than Wells Fargo or its Affiliates, then the applicable US Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Agreement within 10 days after the date of the provision of the applicable US Bank Product to a Parent or its Subsidiaries (other than a Canadian Loan Party or a UK Loan Party).

US Bank Product Reserves” means, as of any date of determination, those reserves, without duplication of any other reserve, that Agent deems necessary or appropriate in its Permitted Discretion to establish (based upon the Bank Product Providers’ reasonable determination of the liabilities and obligations of Parents and their Subsidiaries (other than any Canadian Loan Party or a UK Loan Party) in respect of US Bank Product Obligations) in respect of US Bank Products then provided or outstanding.

 

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US Base Rate” means the greatest of (a) the Federal Funds Rate plus  12%, (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of 1 month and shall be determined on a daily basis), plus 1 percentage point, and (c) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

US Borrower” and “US Borrowers” have the meaning specified therefor in the preamble to the Agreement.

US Borrowing” means a borrowing consisting of US Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by US Swing Lender in the case of a US Swing Loan, or by Agent in the case of an US Extraordinary Advance.

US Borrowing Base” means, as of any date of determination, the Dollar Equivalent amount of:

(a) 90% of the amount of Eligible Accounts of each US Loan Party owing by Account Debtors that are rated (or whose parent is rated) Baa3 or higher from Moody’s or BBB- or higher from S&P, less the amount, if any, of the US Dilution Reserve attributable to such Eligible Accounts, plus

(b) 85% of the amount of Eligible Accounts of each US Loan Party owing by Account Debtors other than those described in the foregoing clause (a), less the amount, if any, of the US Dilution Reserve attributable to such Eligible Accounts, plus

(c) the lesser of (i) the product of 70% multiplied by the value (calculated at the lower of cost or market on a basis consistent with US Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each US Loan Party at such time, and (ii) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Acceptable Appraisal of Inventory, multiplied by the value (calculated at the lower of cost or market on a basis consistent with US Loan Parties’ historical accounting practices) of Eligible Finished Goods Inventory of each US Loan Party (such determination may be made as to different categories of Eligible Finished Goods Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, minus

(d) without duplication, the aggregate amount of Receivables Reserves, Bank Product Reserves, Inventory Reserves and other Reserves, in each case if any, established by Agent from time to time under Section 2.1(e) of this Agreement.

US Copyright Security Agreement” has the meaning specified therefor in the US Security Agreement.

 

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US Designated Account” means the US Deposit Account identified on Schedule D-3 to the Agreement (or such other Deposit Account located at US Designated Account Bank that has been designated as such, in writing, by Administrative Borrower to Agent).

US Designated Account Bank” has the meaning specified therefor in Schedule D-3 to the Agreement (or such other bank that is located within the United States that has been designated as such, in writing, by Administrative Borrower to Agent).

US Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior 12 months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to US Loan Parties’ Accounts during such period, by (b) US Loan Parties’ billings with respect to Accounts during such period.

US Dilution Reserve” means, as of any date of determination, an amount, without duplication of any other reserve, sufficient to reduce the advance rate against Eligible Accounts of US Loan Parties by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

US Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of the Agreement.

US Guarantor” means (a) each Subsidiary of a US Borrower organized under the laws of a state of the United States or the District of Columbia (other than a US Borrower, an Excluded Subsidiary or an Immaterial Subsidiary) and (b) each other Person that guaranties all or a portion of the US Obligations pursuant to the US Security Agreement.

US Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of Parents or their Subsidiaries (other than any Canadian Loan Party or any UK Loan Party) arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

US Issuing Lender” means Wells Fargo and up to three other Lenders designated in writing to, and consented to by, the Agent (such consent not to be unreasonably withheld, conditioned or delayed) by the Administrative Borrower that agree, in such Lender’s sole discretion, to become a US Issuing Lender for the purpose of issuing US Letters of Credit pursuant to Section 2.11A of the Agreement and US Issuing Lender shall be a Lender.

US Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by US Issuing Lender for the account of a US Borrower.

US Letter of Credit Disbursement” means a payment made by US Issuing Lender pursuant to a US Letter of Credit and calculated, with respect to US Letters of Credit where payment was not made in Dollars, as of such date of determination at the Exchange Rate in effect on the date of such payment.

 

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US Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the US Letter of Credit Usage on such date.

US Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding US Letters of Credit and calculated, with respect to US Letters of Credit where demand for payment will not or may not be made in Dollars, as of such date of determination at the Exchange Rate in effect on such date.

US Loan Account” has the meaning specified therefor in Section 2.9 of the Agreement.

US Loan Party” means any US Borrower or any US Guarantor.

US Obligations” means (a) all loans (including the US Revolving Loans (inclusive of US Extraordinary Advances and US Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities (including all amounts charged to the US Loan Account pursuant to the Agreement), obligations (including indemnification obligations) of any US Loan Party, fees (including the fees provided for in the Fee Letter) of any US Loan Party, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) of any US Loan Party, guaranties of any US Loan Party, and all covenants and duties of any other kind and description owing by any US Loan Party arising out of, under, pursuant to, in connection with, or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any US Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, (b) all debts, liabilities, or obligations (including reimbursement and indemnification obligations, irrespective of whether contingent) owing by any US Borrower or any other US Loan Party to US Issuing Lender now or hereafter arising from or in respect of a US Letters of Credit, and (c) all US Bank Product Obligations; provided, that US Obligations shall not include Excluded Swap Obligations. Without limiting the generality of the foregoing, the US Obligations under the Loan Documents include the obligation to pay (i) the principal of the US Revolving Loans, (ii) interest accrued on the US Revolving Loans, (iii) the amount necessary to reimburse US Issuing Lender for amounts paid or payable pursuant to US Letters of Credit, (iv) Letter of Credit commissions, charges, expenses, and fees, in each case in respect of US Letters of Credit, (v) Lender Group Expenses of any US Loan Party, (vi) fees payable by any US Loan Party under the Agreement or any of the other Loan Documents, (vii) indemnities and other amounts payable by any US Loan Party under any Loan Document (excluding Excluded Swap Obligations), (viii) any guaranties by any US Loan Party of all or any part of the Canadian Obligations and (ix) any guaranties by any US Loan Party of all or any part of the UK Obligations. Any reference in the Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

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US Overadvance” means, as of any date of determination, that the US Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11A.

US Patent Security Agreement” has the meaning specified therefor in the US Security Agreement.

US Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of the Agreement.

US Revolver Commitment” means, with respect to each Revolving Lender, its US Revolver Commitment, and, with respect to all Revolving Lenders, their US Revolver Commitments, in each case as set forth beside such Revolving Lender’s name under the applicable heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

US Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding US Revolving Loans (inclusive of US Swing Loans and US Protective Advances), plus (b) the amount of the US Letter of Credit Usage.

US Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the US Revolver Commitments, the amount of such Lender’s US Revolver Commitment, and (b) after the termination of the US Revolver Commitments, the aggregate outstanding principal amount of the US Revolving Loans of such Lender.

US Revolving Loans” has the meaning specified therefor in Section 2.1(a) of the Agreement.

US Security Agreement” means a Guaranty and Security Agreement, dated as of even date with the Agreement, by and among each US Loan Party and Agent.

US Swing Lender” means Wells Fargo or any other Lender that, at the request of US Administrative Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the US Swing Lender under Section 2.3(b) of the Agreement.

US Swing Loan” has the meaning specified therefor in Section 2.3(b) of the Agreement.

US Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the US Swing Loans on such date.

US Trademark Security Agreement” has the meaning specified therefor in the US Security Agreement.

 

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VAT” means (a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

Voidable Transfer” has the meaning specified therefor in Section 17.8 of this Agreement.

Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

WF Canada” means Wells Fargo Capital Finance Corporation Canada.

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

Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.2. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, that 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 Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions immediately before such Accounting Change took effect and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. When used herein, the term “financial statements” shall include the notes and schedules thereto, and financial statements shall be prepared in accordance with GAAP. Whenever the term “Parent” is used in respect of a financial covenant or a related definition, it shall be understood to mean the Loan Parties and their Subsidiaries on a consolidated basis, unless the context clearly requires otherwise. Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered 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 Board’s Accounting Standards Codification Topic 825 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof, and (b) the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability of the applicable Person to continue as a going concern or concerning the scope of the audit.

 

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1.3. Code; PPSA. Any terms used in this Agreement that are defined in (a) the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, 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, and (b) the PPSA (but not the Code) shall be construed and defined as set forth in the PPSA unless otherwise defined herein. Notwithstanding the foregoing, and where the context so requires, (i) any term defined in this Agreement by reference to the “Code”, the “UCC” or the “Uniform Commercial Code” shall also have any extended, alternative or analogous meaning given to such term in applicable Canadian personal property security and other laws (including, without limitation, the PPSA of each applicable province of Canada, the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act (Canada)), to the extent that the context requires and in all cases for the extension, preservation or betterment of the security and rights of the Collateral, (ii) all references in this Agreement to “Article 8” shall be deemed to refer also to applicable Canadian securities transfer laws (including, without limitation, the Securities Transfer Act of each applicable province of Canada (the “STA”)), (iii) all references in this Agreement to a financing statement, continuation statement, amendment or termination statement shall be deemed to refer also to the analogous documents used under applicable Canadian personal property security laws, (iv) all references to the United States of America, or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer, where the context requires with respect to Canadian Loan Parties, in lieu thereof to Canada, or to any subdivision, department, agency or instrumentality thereof, and (v) all references to federal or state securities law of the United States shall be deemed to refer, where the context requires with respect to Canadian Loan Parties, in lieu thereof to analogous federal (where applicable) and provincial securities laws in Canada.

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. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to “law” means all international, foreign, federal, state, provincial and local statutes, treaties, common law, rules, guidelines, regulations, by-laws, ordinances, decrees, codes and administrative or judicial or arbitral or administrative or ministerial or departmental or regulatory precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority. 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,

 

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changes, variations, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, variations, 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. All references to “province” or like terms shall include “territory” and like terms. Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds in the Applicable Currency of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, (ii) all Lender Group Expenses that have accrued and are unpaid regardless of whether demand has been made therefor, and (iii) all fees or charges that have accrued hereunder or under any other Loan Document (including the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization in the Applicable Currency, (c) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization in the Applicable Currency, (d) the receipt by Agent of cash collateral in the Applicable Currency in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including reasonable and documented outside counsel attorneys’ fees and legal expenses), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment in full in immediately available funds in the Applicable Currency of all other outstanding Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid, and (f) the termination of all of the Commitments of the Lenders. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

1.5. Time References. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in Atlanta, Georgia on such day. For purposes of the computation of a period of time from a specified date to a later specified date, unless otherwise expressly provided, 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.

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

 

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1.7. Exchange Rates; Currency Equivalents; Applicable Currency.

(a) For purposes of this Agreement and the other Loan Documents, the Dollar Equivalent of any Revolving Loans, Letters of Credit, other Obligations and other references to amounts denominated in a currency other than Dollars shall be determined in accordance with the terms of this Agreement. Such Dollar Equivalent shall become effective as of such Revaluation Date for such Revolving Loans, Letters of Credit and other Obligations and shall be the Dollar Equivalent employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur for such Revolving Loans, Letters of Credit and other Obligations. Except as otherwise expressly provided herein, the applicable amount of any currency for purposes of the Loan Documents (including for purposes of financial statements and all calculations in connection with the covenants, including the financial covenants) shall be the Dollar Equivalent thereof.

(b) Wherever in this Agreement and the other Loan Documents in connection with a borrowing, conversion, continuation or prepayment of a Revolving Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Revolving Loan or Letter of Credit is denominated in Canadian Dollars or Sterling, such amount shall be the same dollar figure but denominated in Canadian Dollars or Sterling (as applicable).

1.8. Quebec Interpretation. For all purposes of any assets, liabilities or entities located in the Province of Quebec and for all purposes pursuant to which the interpretation or construction of a Loan Document 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 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”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any applicable Law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que cest leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en langue anglaise seulement (sauf si une autre langue est requise en vertu d’une loi applicable).

 

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1.9. Scottish Interpretation. For all purposes of any assets, liabilities or entities located in Scotland or otherwise governed by Scots law and for all purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of Scotland or a court or tribunal exercising jurisdiction in Scotland, (a) “personal property” shall include “movable property”, (b) “real property” shall include “heritable property” and “long leasehold”, (c) “mortgage” shall include “standard security”, (d) “recordation” includes “registrations” and “recording”, (e) “security interest” and “lien” shall include a “hypothec”, “standard security”, “charge”, “pledge”, and “assignation”, (f) “judgment” shall include a “decree”, (g) “tort” includes “delict”, (h) “easements” includes “servitudes”, “burdens”, and “wayleaves”, and (i) “peaceful and undisturbed” includes “open and peaceable”.

2. LOANS AND TERMS OF PAYMENT.

2.1. Revolving Loans.

(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Revolving Lender with a US Revolver Commitment agrees (severally, not jointly or jointly and severally) to make revolving loans in Dollars (“US Revolving Loans”) to US Borrowers in an amount at any one time outstanding not to exceed the lesser of:

(i) such Lender’s US Revolver Commitment, and

(ii) such Lender’s Pro Rata Share of an amount equal to the lesser of:

(A) the amount equal to (1) the Maximum Revolver Amount, less (2) the sum of (w) the US Letter of Credit Usage at such time, plus (x) the principal amount of US Swing Loans outstanding at such time, plus (y) the Dollar Equivalent of the Canadian Revolver Usage at such time, plus (z) the Dollar Equivalent of the UK Revolver Usage at such time, and

(B) the amount equal to (1) the US Borrowing Base as of such date (based upon the US Borrowing Base set forth in the most recent Borrowing Base Certificate delivered by Borrowers to Agent, as adjusted for Reserves established by Agent in accordance with Section 2.1(e)), less (2) the sum of (x) the US Letter of Credit Usage at such time, plus (y) the principal amount of US Swing Loans outstanding at such time.

(b) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Revolving Lender with a Canadian Revolver Commitment agrees (severally, not jointly or jointly and severally) to make revolving loans in Dollars or Canadian Dollars, as selected by Administrative Borrower (“Canadian Revolving Loans”) to Canadian Borrowers in an amount at any one time outstanding not to exceed the Dollar Equivalent of the lesser of:

(i) such Lender’s Canadian Revolver Commitment, and

 

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(ii) such Lender’s Pro Rata Share of an amount equal to the least of:

(A) the amount equal to (1) the Canadian Maximum Revolver Amount, less (2) the sum of (x) the Canadian Letter of Credit Usage at such time, plus (y) the principal amount of Canadian Swing Loans outstanding at such time, and

(B) the amount equal to (1) the Canadian Borrowing Base as of such date (based upon the Canadian Borrowing Base set forth in the most recent Borrowing Base Certificate delivered by Borrowers to Agent, as adjusted for Reserves established by Agent in accordance with Section 2.1(e)), less (2) the sum of (x) the Canadian Letter of Credit Usage at such time, plus (y) the principal amount of Canadian Swing Loans outstanding at such time, and

(C) the amount equal to (1) the Maximum Revolver Amount less (2) the sum of (w) the Canadian Letter of Credit Usage at such time plus (x) the principal amount of Canadian Swing Loans outstanding at such time, plus (y) the US Revolver Usage at such time, plus (z) the Dollar Equivalent of the UK Revolver Usage at such time.

(c) Subject to the terms and conditions of this Agreement (including without limitation the conditions to the initial extensions of credit to the UK Borrowers under Section 3.1), and during the term of this Agreement, each Revolving Lender with a UK Revolver Commitment agrees (severally, not jointly or jointly and severally) to make revolving loans in Dollars or Sterling, as selected by Administrative Borrower (“UK Revolving Loans”) to UK Borrowers in an amount at any one time outstanding not to exceed the Dollar Equivalent of the lesser of:

(i) such Lender’s UK Revolver Commitment, and

(ii) such Lender’s Pro Rata Share of an amount equal to the least of:

(A) the amount equal to (1) the UK Maximum Revolver Amount, less (2) the sum of (x) the UK Letter of Credit Usage at such time, plus (y) the principal amount of UK Swing Loans outstanding at such time, and

(B) the amount equal to (1) the UK Borrowing Base as of such date (based upon the UK Borrowing Base set forth in the most recent Borrowing Base Certificate delivered by Borrowers to Agent, as adjusted for Reserves established by Agent in accordance with Section 2.1(e)), less (2) the sum of (x) the UK Letter of Credit Usage at such time, plus (y) the principal amount of UK Swing Loans outstanding at such time, and

(C) the amount equal to (1) the Maximum Revolver Amount less (2) the sum of (w) the UK Letter of Credit Usage at such time plus (x) the principal amount of UK Swing Loans outstanding at such time, plus (y) the US Revolver Usage at such time, plus (z) the Dollar Equivalent of the Canadian Revolver Usage at such time.

(d) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they otherwise become due and payable pursuant to the terms of this Agreement.

 

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(e) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation) at any time, in the exercise of its Permitted Discretion, to establish and increase or decrease Reserves against the US Borrowing Base, the Canadian Borrowing Base, the UK Borrowing Base, the Maximum Revolver Amount, the Canadian Maximum Revolver Amount or the UK Maximum Revolver Amount. The amount of any Reserve established by Agent, and any changes to the eligibility criteria set forth in the definitions of Eligible Accounts and Eligible Inventory shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve or change in eligibility and shall not be duplicative of any other reserve established and currently maintained or eligibility criteria.

(f) Anything to the contrary in this Section 2.1 notwithstanding, (i) at no time shall the sum of the US Revolver Usage, the Dollar Equivalent of the Canadian Revolver Usage and the Dollar Equivalent of the UK Revolver Usage exceed the Maximum Revolver Amount, (ii) at no time shall the Dollar Equivalent of the Canadian Revolver Usage exceed the Canadian Maximum Revolver Amount and (iii) at no time shall the Dollar Equivalent of the UK Revolver Usage exceed the UK Maximum Revolver Amount.

2.2. [Reserved].

2.3. Borrowing Procedures and Settlements.

(a) Procedure for Borrowing Revolving Loans. Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent (which may be delivered through Agent’s electronic platform or portal) and received by Agent no later than 2:00 p.m. (i) on the Business Day that is the requested Funding Date in the case of a request for a Swing Loan, (ii) on the Business Day that is one Business Day prior to the requested Funding Date in the case of a request for a Base Rate Loan, and (iii) on the Business Day that is three Business Days prior to the requested Funding Date in the case of all other requests, specifying (A) the amount of such Borrowing and whether such Borrowing is for the account of US Borrowers, UK Borrowers or Canadian Borrowers (and (x) if for the Canadian Borrowers, whether in Dollars or Canadian Dollars and (y) if for the UK Borrowers whether in Dollars or Sterling), and (B) the requested Funding Date (which shall be a Business Day); provided, that Agent may, in its sole discretion, elect to accept as timely requests that are received later than 2:00 p.m. on the applicable Business Day. All Borrowing requests which are not made on-line via Agent’s electronic platform or portal shall be subject to (and unless Agent elects otherwise in the exercise of its sole discretion, such Borrowings shall not be made until the completion of) Agent’s authentication process (with results satisfactory to Agent) prior to the funding of any such requested Revolving Loan. Borrowings for the account of US Borrowers shall be denominated in Dollars, Borrowings for the account of Canadian Borrowers shall be denominated in Dollars or Canadian Dollars (as selected by Administrative Borrower), and Borrowings for the account of UK Borrowers shall be denominated in Dollars or Sterling (as selected by Administrative Borrower).

 

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(b) Making of Swing Loans. In the case of a US Swing Loan by US Borrowers, a Canadian Swing Loan by Canadian Borrowers or a UK Swing Loan by UK Borrowers and so long as any of (i) the aggregate Dollar Equivalent amount of Swing Loans made since the last Settlement Date, minus all payments or other amounts applied to Swing Loans since the last Settlement Date, plus the amount of the Swing Loan does not exceed 10% of the Maximum Revolver Amount, or (ii) the applicable Swing Lender, in its sole discretion, agrees to make such Swing Loan notwithstanding the foregoing limitation, the US Swing Lender (in the case of a US Swing Loan), the Canadian Swing Lender (in the case of a Canadian Swing Loan) or the UK Swing Lender (in the case of a UK Swing Loan), as applicable, shall make a Revolving Loan (any such Revolving Loan for the account of US Borrowers made by US Swing Lender pursuant to this Section 2.3(b) being referred to as a “US Swing Loan” and all such Revolving Loans for the account of US Borrowers by US Swing Lender being referred to as “US Swing Loans”, such Revolving Loan for the account of Canadian Borrowers made by Canadian Swing Lender pursuant to this Section 2.3(b) being referred to as a “Canadian Swing Loan” and all such Revolving Loans for the account of Canadian Borrowers by Canadian Swing Lender being referred to as “Canadian Swing Loans”, and such Revolving Loan for the account of UK Borrowers made by UK Swing Lender pursuant to this Section 2.3(b) being referred to as a “UK Swing Loan” and all such Revolving Loans for the account of UK Borrowers by UK Swing Lender being referred to as “UK Swing Loans”) available to the applicable Borrower on the Funding Date applicable thereto by transferring immediately available funds in the Applicable Currency in the amount of such Borrowing to the US Designated Account (in the case of a US Swing Loan), the Canadian Designated Account (in the case of Canadian Swing Loan) or the UK Designated Account (in the case of UK Swing Loan). Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to all the terms and conditions (including Section 3) applicable to other Revolving Loans, except that all payments (including interest) on any Swing Loan shall be payable to the applicable Swing Lender solely for its own account. Subject to the provisions of Section 2.3(d)(ii), no Swing Lender shall make or be obligated to make any Swing Loan if such Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed US Availability (if a US Borrowing), Canadian Availability (if a Canadian Borrowing) or UK Availability (if a UK Borrowing) on such Funding Date. No Swing Lender shall otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan. The US Swing Loans shall constitute US Revolving Loans and US Obligations, and bear interest at the rate applicable from time to time to US Revolving Loans that are Base Rate Loans. The Canadian Swing Loans shall constitute Canadian Revolving Loans and Canadian Obligations, and bear interest at the rate applicable from time to time to Canadian Revolving Loans that are Base Rate Loans. The UK Swing Loans shall constitute UK Revolving Loans and UK Obligations, and bear interest at the rate applicable from time to time to UK Revolving Loans that are Base Rate Loans.

(c) Making of Revolving Loans.

(i) In the event that the applicable Swing Lender is not obligated to make a Swing Loan, then after receipt of a request for a Borrowing pursuant to Section 2.3(a)(i), Agent shall notify the applicable Lenders by telecopy, telephone, email, or other electronic form of transmission, of the requested Borrowing (and whether such borrowing is for the account of

 

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US Borrowers, Canadian Borrowers or UK Borrowers); such notification to be sent on the Business Day that is (A) in the case of a Base Rate Loan at least one Business Day prior to the requested Funding Date or (B) in the case of a Non-Base Rate Loan, prior to 11:00 a.m. at least three Business Days prior to the requested Funding Date. If Agent has notified the applicable Lenders of a requested Borrowing on the Business Day that is one Business Day prior to the Funding Date, then each Lender with the applicable Revolving Commitment shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds in the Applicable Currency, to Agent’s US Account, Agent’s Canadian Account or Agent’s UK Account, as applicable, not later than 10:00 a.m. on the Business Day that is the requested Funding Date. After Agent’s receipt of the proceeds of such Revolving Loans from the applicable Lenders, Agent shall make the proceeds thereof available to the applicable Borrower on the applicable Funding Date by transferring immediately available funds in the Applicable Currency equal to such proceeds received by Agent to the US Designated Account, Canadian Designated Account or UK Designated Account, as applicable; provided, that subject to the provisions of Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the US Availability (in the case of a US Borrowing), Canadian Availability (in the case of a Canadian Borrowing) or UK Availability (in the case of a UK Borrowing)on such Funding Date.

(ii) Unless Agent receives notice from a Lender prior to 9:30 a.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of US Borrowers, UK Borrowers or Canadian Borrowers, as applicable, the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds in the Applicable Currency on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to US Borrowers, UK Borrowers or Canadian Borrowers, as applicable, a corresponding amount. If, on the requested Funding Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in immediately available funds in the Applicable Currency and if Agent has made available to US Borrowers, UK Borrowers or Canadian Borrowers, as applicable, such amount on the requested Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds in the Applicable Currency, to Agent’s Applicable Account, no later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date (in which case, the interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s separate account). If any Lender shall not remit the full amount that it is required to make available to Agent in immediately available funds in the Applicable Currency as and when required hereby and if Agent has made available to US Borrowers, UK Borrowers or Canadian Borrowers, as applicable, such amount, then that Lender shall be obligated to immediately remit such amount to Agent, together with interest at the applicable Defaulting Lender Rate for each day until the date on which such amount is so remitted. A notice submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error. If the amount that a Lender is required to remit is made available to Agent, then such payment to Agent shall constitute such

 

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Lender’s US Revolving Loans (in the case of Revolving Loans for the account of US Borrowers), UK Revolving Loans (in the case of Revolving Loans for the account of UK Borrowers) or Canadian Revolving Loans (in the case of Revolving Loans for the account of Canadian Borrowers) for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent, US Borrowers (in the case of US Revolving Loans), UK Borrowers (in the case of UK Revolving Loans) and Canadian Borrowers (in the case of Canadian Revolving Loans) shall pay such amount in the Applicable Currency to Agent, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the applicable Revolving Loans composing such Borrowing.

(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement or any other Loan Document notwithstanding (but subject to Section 2.3(d)(iv)) at any time (A) after the occurrence and during the continuance of an Event of Default, or (B) that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time to time, in Agent’s sole discretion, to make US Revolving Loans to, or for the benefit of, US Borrowers, UK Revolving Loans to, or for the benefit of, UK Borrowers, and/or Canadian Revolving Loans to, or for the benefit of, Canadian Borrowers, in each case, on behalf of the applicable Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (the US Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “US Protective Advances”, the UK Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “UK Protective Advances” and the Canadian Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “Canadian Protective Advances”). Notwithstanding the foregoing, the aggregate Dollar Equivalent principal amount of all Protective Advances outstanding at any one time shall not exceed 10% of the Maximum Revolver Amount. Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders delivering written notice of such revocation to Agent. Any such revocation shall become effective prospectively upon Agent’s receipt thereof.

(ii) Any contrary provision of this Agreement or any other Loan Document notwithstanding, the Lenders hereby authorize Agent or the applicable Swing Lender, as applicable, and either Agent or the applicable Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make US Revolving Loans (including US Swing Loans) to US Borrowers, UK Revolving Loans (including UK Swing Loans) to UK Borrowers and Canadian Revolving Loans (including Canadian Swing Loans) to Canadian Borrowers notwithstanding that an Overadvance exists or would be created thereby, so long as (A) with respect to any such US Revolving Loans, (i) after giving effect to any such US Revolving Loans, the outstanding US Revolver Usage does not exceed the US Borrowing Base (based upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent) by more than 10% of the Maximum Revolver Amount, and (ii) subject to Section 2.3(d)(iv) below, after giving effect to such US Revolving Loans, the sum of the outstanding US Revolver Usage (except for and excluding amounts charged to the US Loan Account for interest, fees, or Lender

 

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Group Expenses), the Dollar Equivalent of the UK Revolver Usage (except for and excluding amount charged to the UK Loan Account for interest, fees and Lender Group Expenses), and the Dollar Equivalent of the Canadian Revolver Usage (except for and excluding amount charged to the Canadian Loan Account for interest, fees and Lender Group Expenses) does not exceed the Maximum Revolver Amount, (B) with respect to any such Canadian Revolving Loans, (i) after giving effect to such Canadian Revolving Loans, the outstanding Dollar Equivalent of the Canadian Revolver Usage does not exceed the Canadian Borrowing Base (based upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent) by more than 10% of the Canadian Maximum Revolver Amount, and (ii) subject to Section 2.3(d)(iv) below, after giving effect to such Canadian Revolving Loans, the sum of the outstanding Dollar Equivalent of the Canadian Revolver Usage (except for and excluding amounts charged to the Canadian Loan Account for interest, fees, or Lender Group Expenses), UK Revolver Usage and US Revolver Usage does not exceed the Maximum Revolver Amount and (C) with respect to any such UK Revolving Loans, (i) after giving effect to such UK Revolving Loans, the outstanding Dollar Equivalent of the UK Revolver Usage does not exceed the UK Borrowing Base (based upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent) by more than 10% of the UK Maximum Revolver Amount, and (ii) subject to Section 2.3(d)(iv) below, after giving effect to such UK Revolving Loans, the sum of the outstanding Dollar Equivalent of the UK Revolver Usage (except for and excluding amounts charged to the UK Loan Account for interest, fees, or Lender Group Expenses), Canadian Revolver Usage and US Revolver Usage does not exceed the Maximum Revolver Amount. In the event Agent obtains actual knowledge that the applicable US Revolver Usage, UK Revolver Usage or Canadian Revolver Usage exceeds the amounts permitted by this Section 2.3(d), regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the applicable Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders with applicable Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with the applicable Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the applicable Revolving Loans to such Borrowers to an amount permitted by the preceding sentence. In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.4(e). Agent’s and Swing Lender’s authorization to make intentional Overadvances may be revoked at any time by the Required Lenders delivering written notice of such revocation to Agent. Any such revocation shall become effective prospectively upon Agent’s receipt thereof.

(iii) Each US Protective Advance and each US Overadvance (each, “US Extraordinary Advance”) shall be deemed to be a US Revolving Loan hereunder, each UK Protective Advance and each UK Overadvance (each, “UK Extraordinary Advance”) shall be deemed to be a UK Revolving Loan hereunder and each Canadian Protective Advance and Canadian Overadvance (each, a “Canadian Extraordinary Advance”) shall be deemed a Canadian Revolving Loan hereunder. No Extraordinary Advance shall be eligible to be a Non-Base Rate

 

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Loan. Prior to Settlement of any Extraordinary Advances, all payments with respect thereto, including interest thereon, shall be payable to Agent solely for its own account. Each Revolving Lender shall be obligated to settle with Agent as provided in Section 2.3(e) or Section 2.3(g), as applicable, for the amount of such Lender’s Pro Rata Share of any Extraordinary Advance. The US Extraordinary Advances shall be repayable on demand, constitute US Obligations hereunder, and bear interest at the rate applicable from time to time to US Revolving Loans that are Base Rate Loans, the UK Extraordinary Advances shall be repayable on demand, constitute UK Obligations hereunder, and bear interest at the rate applicable from time to time to UK Revolving Loans that are Base Rate Loans and the Canadian Extraordinary Advances shall be repayable on demand, constitute Canadian Obligations hereunder, and bear interest at the rate applicable from time to time to Canadian Revolving Loans that are Base Rate Loans. The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers (or any other Loan Party) in any way.

(iv) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, no Extraordinary Advance may be made by Agent if such Extraordinary Advance would cause the aggregate Dollar Equivalent of the Revolver Usage to exceed the Maximum Revolver Amount or any Lender’s Pro Rata Share of the Dollar Equivalent of the Revolver Usage to exceed such Lender’s Revolver Commitments.

(e) Settlement. It is agreed that each Lender’s funded portion of (i) the US Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding US Revolving Loans, (ii) the UK Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding UK Revolving Loans and (iii) Canadian Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Canadian Revolving Loans. Such agreement notwithstanding, Agent, Swing Lenders, and the other Lenders agree (which agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans (including Swing Loans and Extraordinary Advances) shall take place on a periodic basis in accordance with the following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent in its sole discretion (1) on behalf of US Swing Lender, with respect to the outstanding US Swing Loans, (2) on behalf of Canadian Swing Lender, with respect to the outstanding Canadian Swing Loans, (3) on behalf of UK Swing Lender, with respect to the outstanding UK Swing Loans, (4) for itself, with respect to the outstanding Extraordinary Advances, and (5) with respect to Loan Parties’ or any of their Subsidiaries’ payments or other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding US Revolving Loans (including US Swing Loans and US Extraordinary Advances), UK Revolving Loans (including UK Swing Loans and UK Extraordinary Advances) and Canadian Revolving Loans (including Canadian Swing Loans and Canadian Extraordinary Advances) for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including Section

 

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2.3(g)): (y) if the amount of the applicable Revolving Loans (including applicable Swing Loans and applicable Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer in immediately available funds in the Applicable Currency to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the US Revolving Loans (including US Swing Loans and US Extraordinary Advances), the UK Revolving Loans (including UK Swing Loans and UK Extraordinary Advances) and the Canadian Revolving Loans (including Canadian Swing Loans and Canadian Extraordinary Advances), as applicable, and (z) if the amount of the applicable Revolving Loans (including the applicable Swing Loans and applicable Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata Share of the applicable Revolving Loans (including applicable Swing Loans and applicable Extraordinary Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. on the Settlement Date transfer in immediately available funds in the Applicable Currency to Agent’s Applicable Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the US Revolving Loans (including US Swing Loans and US Extraordinary Advances), the UK Revolving Loans (including UK Swing Loans and UK Extraordinary Advances) and Canadian Revolving Loans (including Canadian Swing Loans and Canadian Extraordinary Advances). Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans or Extraordinary Advances and, together with the portion of such Sing Loans or Extraordinary Advances representing the applicable Swing Lender’s Pro Rata Share thereof, shall constitute US Revolving Loans, UK Revolving Loans or Canadian Revolving Loans, as applicable, of such Lenders. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the applicable Revolving Loans (including Swing Loans and Extraordinary Advances) is less than, equal to, or greater than such Lender’s Pro Rata Share of the applicable Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments applicable to such Obligations actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

(iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances for the account of Agent or Swing Loans for the account of a Swing Lender are outstanding, may pay over to Agent or such Swing Lender, as applicable, any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Extraordinary Advances or Swing Loans. Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to the applicable Swing Lender any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the applicable Swing Lender’s

 

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Pro Rata Share of the applicable Revolving Loans. If, as of any Settlement Date, payments or other amounts of Loan Parties or their Subsidiaries received since the then immediately preceding Settlement Date have been applied to a Swing Lender’s Pro Rata Share of the applicable Revolving Loans other than to its Swing Loans, as provided for in the previous sentence, such Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to be applied to the outstanding applicable Revolving Loans of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the applicable Revolving Loans. During the period between Settlement Dates, a Swing Lender with respect to its Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by such Swing Lender, Agent, or the Lenders, as applicable.

(iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.3(g).

(f) Notation. Consistent with Section 13.1(h), Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing in the Applicable Currency the principal amount and stated interest of the Revolving Loans owing to each Lender, including the Swing Loans owing to the applicable Swing Lender, and Extraordinary Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

(g) Defaulting Lenders.

(i) Notwithstanding the provisions of Section 2.4(b)(ii), Agent shall not be obligated to transfer to a Defaulting Lender any payments made by or on behalf of any Borrower to Agent for the Defaulting Lender’s benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such proceeds of Collateral or payments (A) pertaining to or securing US Obligations, (i) first, to Agent, to the extent of any US Extraordinary Advances that were made by Agent and that were required to be, but were not, paid by the Defaulting Lender, (ii) second, to US Swing Lender to the extent of any US Swing Loans that were made by US Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (iii) third, to US Issuing Lender, to the extent of the portion of a US Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (iv) fourth, to each Non-Defaulting Lender ratably in accordance with their US Revolver Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a US Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (v) fifth, in Agent’s sole discretion, to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of US Borrowers (upon the request of Borrowers and subject to the conditions set forth in Section 3.2) as if such Defaulting Lender had made its portion of US Revolving Loans (or other

 

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funding obligations) hereunder, (vi) sixth, to the extent such Collateral also secures any Foreign Obligations, in accordance with Section 2.3(g)(i)(B), and (vii) seventh, from and after the date on which all other US Obligations have been paid in full, to such Defaulting Lender in accordance with tier (A)(xiii) of Section 2.4(b)(ii), and (B) pertaining to or securing any Foreign Obligations, (i) first, to Agent to the extent of any Canadian Extraordinary Advances and UK Extraordinary Advances that were made by Agent and that were required to be, but were not, paid by Defaulting Lender, (ii) second, on a pro rata basis, to Canadian Swing Lender to the extent of any Canadian Swing Loans that were made by Canadian Swing Lender and that were required to be, but were not, paid by the Defaulting Lender and to UK Swing Lender to the extent of any UK Swing Loans that were made by UK Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (iii) third, on a pro rata basis, to Canadian Issuing Lender, to the extent of the portion of a Canadian Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender and UK Issuing Lender, to the extent of the portion of a UK Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (iv) fourth, on a pro rata basis to each Non-Defaulting Lender ratably in accordance with their Canadian Revolver Commitments and UK Revolver Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a Canadian Revolving Loan, UK Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (v) fifth, in Agent’s sole discretion, to a suspense account maintained by Agent, the proceeds of which may be retained by Agent and may be made available to be re-advanced to or for the benefit of Canadian Borrowers or UK Borrowers (upon the request of Borrowers and subject to the conditions set forth in Section 3.2) as if such Defaulting Lender had made its portion of Canadian Revolving Loans, UK Revolving Loans (or other funding obligations) hereunder, and (vi) sixth, from and after the date on which all other Foreign Obligations have been paid in full, to such Defaulting Lender in accordance with tier (B)(xii) of Section 2.4(b)(ii). Subject to the foregoing, Agent may hold and, in its discretion, re-lend to the applicable Borrower for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fees payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided, that the foregoing shall not apply to any of the matters governed by Section 14.1(a)(i) through (iii). The provisions of this Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Lenders, and Borrowers shall have waived, in writing, the application of this Section 2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to Section 2.3(g)(ii) shall be released to the applicable Borrower). The operation of this Section 2.3(g) shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to Agent, Issuing Lenders, or to the Lenders other than

 

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such Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitments of such Defaulting Lender and the Commitments of any Affiliate of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lenders shall have no right to refuse to be replaced hereunder, and agree to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agree that they shall be deemed to have executed and delivered such document if they fail to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); provided, that any such assumption of the Commitments of such Defaulting Lenders shall not be deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund. In the event of a direct conflict between the priority provisions of this Section 2.3(g) 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, the terms and provisions of this Section 2.3(g) shall control and govern.

(ii) If any applicable Swing Loan or Letter of Credit is outstanding at the time that a Lender becomes a Defaulting Lender then:

(A) such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure shall be reallocated among the applicable Non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (w) the sum of all Non-Defaulting Lenders’ Pro Rata Share of US Revolver Usage plus such Defaulting Lender’s US Swing Loan Exposure and US Letter of Credit Exposure does not exceed the amount by which the total of all Non-Defaulting Lenders’ US Revolver Commitments exceed the US Revolver Usage, (x) the sum of the Dollar Equivalent of all Non-Defaulting Lenders’ Pro Rata Share of Canadian Revolver Usage plus such Defaulting Lender’s Canadian Swing Loan Exposure and Canadian Letter of Credit Exposure does not exceed the total of all Non-Defaulting Lenders’ Canadian Revolver Commitments, (y) the sum of the Dollar Equivalent of all Non-Defaulting Lenders’ Pro Rata Share of UK Revolver Usage plus such Defaulting Lender’s UK Swing Loan Exposure and UK Letter of Credit Exposure does not exceed the total of all Non-Defaulting Lenders’ UK Revolver Commitments and (z) the conditions set forth in Section 3.2 are satisfied at such time;

(B) if the reallocation described in clause (A) above cannot, or can only partially, be effected, the applicable Borrower shall within two Business Days following written notice by Agent (x) first, prepay such Defaulting Lender’s applicable Swing Loan Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), and (y) second, cash collateralize such Defaulting Lender’s applicable Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to Agent and the applicable Borrower, for so long as such Letter of Credit Exposure is outstanding; provided, that Borrowers shall not be obligated to cash collateralize any Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also an Issuing Lender;

 

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(C) if the applicable Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), such Borrower shall not be required to pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to Section 2.6(b) with respect to such cash collateralized portion of such Defaulting Lender’s Letter of Credit Exposure during the period such Letter of Credit Exposure is cash collateralized;

(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit Exposure;

(E) to the extent any Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of any Issuing Lender or any Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to such Defaulting Lender under Section 2.6(b) with respect to such portion of such Letter of Credit Exposure shall instead be payable to the applicable Issuing Lender until such portion of such Defaulting Lender’s Letter of Credit Exposure is cash collateralized or reallocated;

(F) so long as any Lender is a Defaulting Lender, no Swing Lender shall be required to make any Swing Loan and no Issuing Lender shall be required to issue, amend, or increase any Letter of Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this Section 2.3(g)(ii) or (y) the applicable Swing Lender or Issuing Lender, as applicable, has not otherwise entered into arrangements reasonably satisfactory to the applicable Swing Lender or Issuing Lender, as applicable, and the applicable Borrowers to eliminate such Swing Lender’s or Issuing Lender’s risk with respect to the Defaulting Lender’s participation in such Swing Loans or Letters of Credit; and

(G) Agent may release any cash collateral provided by Borrowers pursuant to this Section 2.3(g)(ii) to the applicable Issuing Lender and such Issuing Lender may apply any such cash collateral to the payment of such Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by the applicable Borrowers pursuant to Sections 2.11A(d) and 2.11B(d), as applicable. Subject to Section 17.14, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(iii) If any Lender with a US Revolver Commitment, UK Revolver Commitment or Canadian Revolver Commitment is a Defaulting Lender, then any Affiliate of such Lender with a US Revolver Commitment, UK Revolver Commitment or Canadian Revolver Commitment shall be deemed to be a Defaulting Lender.

 

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(h) Independent Obligations. All Revolving Loans (other than Swing Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

2.4. Payments; Reductions of Commitments; Prepayments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent’s Applicable Account for the account of the Lender Group and shall be made in immediately available funds in the Applicable Currency, no later than 4:30 p.m. on the date specified herein. Any payment received by Agent later than 4:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date 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 Borrowers prior to the date on which any payment is due to the Lenders that Borrowers will not 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 Defaulting Lender Rate 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 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) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for the separate account of an Issuing Lender) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. Subject to Section 2.4(b)(iv) and Section 2.4(e), all payments to be made hereunder by US Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral securing US Obligations received by Agent, shall

 

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be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the US Revolving Loans outstanding and, thereafter, to US Borrowers (to be wired to the US Designated Account) or such other Person entitled thereto under applicable law. Subject to Section 2.4(b)(iv) and Section 2.4(e), all payments in respect of Canadian Obligations to be made hereunder by Canadian Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral securing Canadian Obligations (other than (x) Collateral also securing US Obligations, which shall be applied first to the US Obligations and (y) Collateral also securing UK Obligations, which shall be applied pro rata to UK Obligations and Canadian Obligations) received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the Canadian Revolving Loans outstanding and, thereafter, to a Canadian Borrower (to be wired to the Canadian Designated Account) or such other Person entitled thereto under applicable law. Subject to Section 2.4(b)(iv) and Section 2.4(e), all payments in respect of UK Obligations to be made hereunder by UK Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral securing UK Obligations (other than (x) Collateral also securing US Obligations, which shall be applied first to the US Obligations and (y) Collateral also securing Canadian Obligations, which shall be applied pro rata to UK Obligations and Canadian Obligations) received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the UK Revolving Loans outstanding and, thereafter, to UK Borrower (to be wired to the UK Designated Account) or such other Person entitled thereto under applicable law.

(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 and all proceeds of Collateral received by Agent shall be applied as follows:

(A) All payments in respect of US Obligations and all proceeds of Collateral securing the US Obligations received by Agent shall be applied as follows:

i. first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents in respect of US Obligations, until paid in full,

ii. second, to pay any fees or premiums then due to Agent under the Loan Documents in respect of US Obligations, until paid in full,

iii. third, to pay interest due in respect of all US Protective Advances, until paid in full,

iv. fourth, to pay the principal of all US Protective Advances, until paid in full,

 

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v. fifth, 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 in respect of US Obligations, until paid in full,

vi. sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents in respect of US Obligations, until paid in full,

vii. seventh, to pay interest accrued in respect of the US Swing Loans, until paid in full,

viii. eighth, to pay the principal of all US Swing Loans, until paid in full,

ix. ninth, ratably, to pay interest accrued in respect of the US Revolving Loans (other than US Protective Advances), until paid in full,

x. tenth, ratably

a. ratably, to pay the principal of all US Revolving Loans, until paid in full,

b. to Agent, to be held by Agent, for the benefit of US Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of US Issuing Lender, a share of each US Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the US Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any US Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such US Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A)(i) hereof),

c. ratably, up to the amount (after taking into account any amounts previously paid pursuant to this clause c. during the continuation of the applicable Application Event) of the most recently established US Bank Product Reserve, which amount was established prior to the occurrence of, and not in contemplation of, the subject Application Event, to (I) ratably to the Bank Product Providers of US Bank Products (based on the US Bank Product Reserve established for each US Bank Product of such Bank Product Provider) up to the amounts then certified by each applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Provider on account of US Bank Product Obligations (but not in excess of the US Bank Product Reserve established for the US Bank Product Obligations of such Bank Product Provider), and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit (based on the US Bank Product Reserve established for each US Bank Product) of the Bank Product Providers for US Bank Products, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to US Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such US Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such US Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A)(i) hereof),

 

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xi. eleventh, to pay any US Obligations arising as a result of any guaranty by a US Loan Party of the Foreign Obligations (and as between the UK Obligations and the Canadian Obligations, on a pro rata basis) (and if no amounts are due under any such guaranty, to cash collateralize the obligations under such guaranty unless the Canadian Revolver Commitments and UK Revolver Commitments of Lenders to make Canadian Revolving Loans and UK Revolving Loans have terminated and the Foreign Obligations have been paid in full),

xii. twelfth, to pay any other US Obligations other than US Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of US Bank Product Obligations, with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to US Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such US Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such US Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A)(i) hereof),

xiii. thirteenth, ratably to pay any US Obligations owed to Defaulting Lenders; and

xiv. fourteenth, to US Borrowers (to be wired to the US Designated Account) or such other Person entitled thereto under applicable law.

(B) All payments in respect of Foreign Obligations and all proceeds of Collateral securing the Foreign Obligations (other than Collateral also securing the US Obligations, which shall be applied first to the US Obligations) received by Agent shall be applied as follows:

i. first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents in respect of the Foreign Obligations, until paid in full,

ii. second, to pay any fees or premiums then due to Agent under the Loan Documents in respect of the Foreign Obligations until paid in full,

iii. third, to pay interest due in respect of all Canadian Protective Advances and UK Protective Advances until paid in full,

iv. fourth, to pay the principal of all Canadian Protective Advances and UK Protective Advances until paid in full,

 

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v. fifth, 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 in respect of the Foreign Obligations, until paid in full,

vi. sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents in respect of the Foreign Obligations until paid in full,

vii. seventh, to pay interest accrued in respect of the Canadian Swing Loans and UK Swing Loans until paid in full,

viii. eighth, to pay principal of all Canadian Swing Loans and UK Swing Loans until paid in full,

ix. ninth, ratably, to pay interest accrued in respect of the Canadian Revolving Loans (other than Canadian Protective Advances) and UK Revolving Loans (other than UK Protective Advances) until paid in full,

x. tenth, ratably

a. to pay the principal of all Canadian Revolving Loans and UK Revolving Loans until paid in full,

b. to Agent, to be held by Agent for the ratable benefit of, (x) Canadian Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of Canadian Issuing Lender, a share of each Canadian Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the Canadian Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Canadian Letter of Credit Disbursement as and when such disbursement occurs and, if a Canadian Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (B)(i) hereof) and (y) UK Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of UK Issuing Lender, a share of each UK Letter of Credit Disbursement), as cash collateral in an amount up to 120% of the UK Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any UK Letter of Credit Disbursement as and when such disbursement occurs and, if a UK Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (B)(i) hereof),

c. ratably, (x) up to the amount (after taking into account any amounts previously paid pursuant to this clause c. during the continuation of the applicable Application Event) of the most recently established Canadian Bank Product Reserve, which amount was established prior to the occurrence of, and not in contemplation of, the subject Application Event, to (I) ratably to the Bank Product Providers of Canadian Bank Products (based on the Canadian Bank Product Reserve established for each Canadian Bank Product of each such Bank Product Provider) up to the amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to

 

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such Bank Product Provider on account of Canadian Bank Product Obligations (but not in excess of the Canadian Bank Product Reserve established for the Canadian Bank Product Obligations of such Bank Product Provider), and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit (based on the Canadian Bank Product Reserve established for each Canadian Bank Product) of the Bank Product Providers for Canadian Bank Products, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Canadian Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Canadian Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Canadian Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (B)(i) hereof) and (y) up to the amount (after taking into account any amounts previously paid pursuant to this clause c. during the continuation of the applicable Application Event) of the most recently established UK Bank Product Reserve, which amount was established prior to the occurrence of, and not in contemplation of, the subject Application Event, to (I) ratably to the Bank Product Providers of UK Bank Products (based on the UK Bank Product Reserve established for each UK Bank Product of each such Bank Product Provider) up to the amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Provider on account of UK Bank Product Obligations (but not in excess of the UK Bank Product Reserve established for the UK Bank Product Obligations of such Bank Product Provider), and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit (based on the UK Bank Product Reserve established for each UK Bank Product) of the Bank Product Providers for UK Bank Products, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to UK Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such UK Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such UK Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (B)(i) hereof),

xi. eleventh, ratably to pay any other Foreign Obligations other than Foreign Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Canadian Bank Product Obligations and UK Bank Product Obligations, with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Canadian Bank Product Obligations and UK Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Canadian Bank Product Obligations and UK Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Canadian Bank Product Obligations and UK Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (B)(i) hereof),

 

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xii. twelfth, ratably to pay any Foreign Obligations owed to Defaulting Lenders; and

xiii. thirteenth, to Canadian Borrowers (to be wired to the Canadian Designated Account), UK Borrowers (to be wired to the UK Designated Account) or such other Person entitled thereto under applicable law.

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

(iv) 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 Borrowers to Agent and specified by Borrowers 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.

(v) 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, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

(vi) 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, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this Section 2.4 shall control and govern.

(vii) Payments from US Loan Parties shall be deemed to be in respect of US Obligations and, except where the application of such payment is expressly indicated to apply to all Foreign Obligations (or all Foreign Obligations of a particular type), payments from Canadian Loan Parties shall be deemed to be in respect of Canadian Obligations and payments from UK Loan Parties shall be deemed to be in respect of UK Obligations. If a payment is from proceeds of Collateral that secures both US Obligations and Foreign Obligations, or is a payment from a Person that is not organized under the laws of the United States or any state thereof but has guaranteed both the US Obligations and the Foreign Obligations, any such payment shall be, so long as no Application Event has occurred and is continuing, as specified by the Borrowers or, if not so specified or if an Application Event has occurred and is continuing, as determined by Agent (and in the absence of such determination, shall be assumed to be a payment in respect of US Obligations until the US Obligations are paid in full).

 

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(c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate on the Maturity Date or earlier termination thereof pursuant to the terms of this Agreement. Borrowers may reduce the US Revolver Commitments, the UK Revolver Commitments or the Canadian Revolver Commitments, as applicable, without premium or penalty, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all applicable Revolving Loans not yet made as to which a request has been given by Borrowers under Section 2.3(a) which has not been permitted by Agent to be revoked by the Borrowers, plus (C) the amount of all applicable Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section 2.11A(a) or 2.11B(a), as applicable. Each such reduction shall be in an amount which is not less than $25,000,000 (unless the applicable Revolver Commitments are being reduced to zero and the amount of the applicable Revolver Commitments in effect immediately prior to such reduction are less than $25,000,000), shall be made by providing not less than three Business Days prior written notice to Agent, and shall be irrevocable. The applicable Revolver Commitments, once reduced, may not be increased. A reduction of the US Revolver Commitments shall not automatically result in a reduction of the Canadian Revolver Commitments or the UK Revolver Commitments (unless the Borrowers so elect), provided that the Canadian Maximum Revolver Amount shall not at any time exceed 25% the amount of the US Revolver Commitments and the UK Maximum Revolver Amount shall not at any time exceed 10% of the amount of the US Revolver Commitments. Each such reduction of the applicable Revolver Commitments shall reduce the applicable Revolver Commitments of each Lender proportionately in accordance with its ratable share thereof. In connection with any reduction in the applicable Revolver Commitments prior to the Maturity Date, if any Loan Party or any of its Subsidiaries owns any Margin Stock, Borrowers shall deliver to Agent an updated Form U-1 (with sufficient additional originals thereof for each Lender), duly executed and delivered by the Borrowers, together with such other documentation as Agent shall reasonably request, in order to enable Agent and the Lenders to comply with any of the requirements under Regulations T, U or X of the Federal Reserve Board.

(d) Optional Prepayments of Revolving Loans. The applicable Borrowers may prepay the principal of any US Revolving Loan, UK Revolving Loan or Canadian Revolving Loan, as applicable, at any time in whole or in part, without premium or penalty (but subject to the provisions of Section 2.12(c)).

(e) Mandatory Prepayments. If, at any time, (A) the US Revolver Usage on such date exceeds (B) the lesser of (x) the US Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrowers to Agent, or (y) the Maximum Revolver Amount, in all cases as adjusted for Reserves established by Agent in accordance with Section 2.1(e), then US Borrowers shall promptly, but in any event, within one Business Day, prepay the US Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess. If, at any time, (A) the Dollar Equivalent of the Canadian Revolver Usage on such date exceeds (B) the lesser of (x) the Canadian Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrowers to Agent (including any excess arising as a result of fluctuations in exchange rates), or (y) the Canadian Maximum Revolver Amount, in all cases as adjusted for Reserves established by Agent in accordance with Section 2.1(e), then Canadian Borrowers shall promptly, but in any event, within one Business Day, prepay the Canadian Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess. If, at any time, (A) the Dollar Equivalent of the UK Revolver Usage on such date exceeds (B) the lesser of (x) the UK Borrowing Base reflected in the Borrowing Base

 

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Certificate most recently delivered by Borrowers to Agent (including any excess arising as a result of fluctuations in exchange rates), or (y) the UK Maximum Revolver Amount, in all cases as adjusted for Reserves established by Agent in accordance with Section 2.1(e), then UK Borrowers shall promptly, but in any event, within one Business Day, prepay the UK Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess. Within one Business Day of the date of receipt by any Loan Party or any of its Subsidiaries of the Net Cash Proceeds of a Permitted Sale Leaseback during a Cash Dominion Period (and at no other time), Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of such Net Cash Proceeds received by such Person in connection with such Permitted Sale Leaseback.

(f) Application of Payments. Each prepayment pursuant to the first and the last sentences of Section 2.4(e) shall, (1) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the US Revolving Loans until paid in full, and second, to cash collateralize the US Letters of Credit in an amount equal to 105% of the then outstanding US Letter of Credit Usage, and (2) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii). Each prepayment pursuant to the second sentence of Section 2.4(e) shall, (1) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the Canadian Revolving Loans until paid in full, and second, to cash collateralize the Canadian Letters of Credit in an amount equal to 105% of the then outstanding Canadian Letter of Credit Usage, and (2) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii). Each prepayment pursuant to the third sentence of Section 2.4(e) shall, (1) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the UK Revolving Loans until paid in full, and second, to cash collateralize the UK Letters of Credit in an amount equal to 120% of the then outstanding UK Letter of Credit Usage, and (2) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

2.5. Promise to Pay; Promissory Notes.

(a) Borrowers agree to pay the Lender Group Expenses owing by such Borrower on the earlier of (i) the first day of the month following the date on which the applicable Lender Group Expenses were first incurred, or (ii) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the applicable Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (ii)). US Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) in full on the Maturity Date or, if earlier, on the date on which the Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement. Canadian Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) owing by such Canadian Borrowers in full on the Maturity Date or, if earlier, on the date on which such Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement. UK Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) owing by such

 

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UK Borrowers in full on the Maturity Date or, if earlier, on the date on which such Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement. Borrowers agree that their obligations contained in this Section 2.5(a) shall survive payment or satisfaction in full of all other Obligations.

(b) Any Lender may request that any portion of its Commitments or the Loans made by it be evidenced by one or more promissory notes. In such event, the applicable Borrowers shall execute and deliver to such Lender the requested promissory notes payable to the order of such Lender in a form furnished by Agent and reasonably satisfactory to the applicable Borrowers. Thereafter, the portion of the Commitments and Loans evidenced by such promissory notes and interest thereon shall at all times be represented by one or more promissory notes in such form payable to the order of the payee named therein.

2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest as follows:

(i) all US Revolving Loans and all other US Obligations (except for undrawn US Letters of Credit) that have been charged to the US Loan Account pursuant to the terms hereof, shall bear interest as follows:

(A) if the relevant US Obligation is a Non-Base Rate Loan, at a per annum rate equal to the LIBOR Rate plus the Non-Base Rate Margin,

(B) if the relevant US Obligation is a Base Rate Loan, at a per annum rate equal to the US Base Rate plus the Revolver Base Rate Margin,

(C) otherwise, at a per annum rate equal to the US Base Rate plus the Revolver Base Rate Margin; and

(ii) all Canadian Revolving Loans and all other Canadian Obligations (except for undrawn Canadian Letters of Credit) that have been charged to the Canadian Loan Account pursuant to the terms hereof, shall bear interest as follows:

(A) if the relevant Canadian Obligation is a Non-Base Rate Loan in Canadian Dollars, at a per annum rate equal to the CDOR Rate plus the Non-Base Rate Margin,

(B) if the relevant Canadian Obligation is a Non-Base Rate Loan in Dollars, at a per annum rate equal to the LIBOR Rate plus the Non-Base Rate Margin,

(C) if the relevant Canadian Obligation is a Base Rate Loan in Canadian Dollars, at a per annum rate equal to the Canadian Base Rate plus the Base Rate Margin,

 

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(D) if the relevant Canadian Obligation is a Base Rate Loan in Dollars, at a per annum rate equal to the US Base Rate plus the Base Rate Margin,

(E) if the relevant Canadian Obligation is otherwise a Canadian Obligation denominated in Canadian Dollars, at a per annum rate equal to the Canadian Base Rate plus the Base Rate Margin, and

(F) otherwise, at a per annum rate equal to the applicable US Base Rate plus the Base Rate Margin.

(iii) all UK Revolving Loans and all other UK Obligations (except for undrawn UK Letters of Credit) that have been charged to the UK Loan Account pursuant to the terms hereof, shall bear interest as follows:

(A) if the relevant UK Obligation is a Non-Base Rate Loan, at a per annum rate equal to the LIBOR Rate (for the Applicable Currency) plus the Non-Base Rate Margin,

(B) if the relevant UK Obligation is a Base Rate Loan in Sterling, at a per annum rate equal to the UK Floating Rate plus the Base Rate Margin,

(C) if the relevant UK Obligation is otherwise a UK Obligation denominated in Sterling, at a per annum rate equal to the UK Floating Rate plus the Base Rate Margin, and

(D) otherwise, at a per annum rate equal to the applicable US Base Rate plus the Base Rate Margin.

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of the Revolving Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee shall be in addition to the fronting fees and commissions, other fees, charges and expenses set forth in Section 2.11A(k) and Section 2.11B(k) and Section 2.11C(k), as applicable) in the Applicable Currency that shall accrue at a per annum rate equal to the Non-Base Rate Margin times the times the average amount of the Letter of Credit Usage in respect of which such Borrower is the account party during the immediately preceding quarter (or if an Event of Default has occurred, month).

(c) Default Rate. (i) Automatically upon the occurrence and during the continuation of an Event of Default under Section 8.4, 8.5 or 8.13 and (ii) upon the occurrence and during the continuation of any other Event of Default (other than an Event of Default under Section 8.4, 8.5 or 8.13), at the direction of Agent or the Required Lenders, and upon written notice by Agent to Borrowers of such direction (provided, that such notice shall not be required for any Event of Default under Section 8.1), (A) all Loans and all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest at a per annum rate equal to two percentage points above the per annum rate otherwise applicable thereunder, and (B) the Letter of Credit Fee shall be increased to two percentage points above the per annum rate otherwise applicable hereunder.

 

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(d) Payment. Except to the extent provided to the contrary in Section 2.10, Section 2.11A(k), Section 2.11B(k) or Section 2.12(a), (i) all interest and all other fees payable hereunder or under any of the other Loan Documents (other than Letter of Credit Fees) shall be due and payable, in arrears, on the first day of each quarter; provided, that if an Event of Default has occurred and is continuing, such amounts shall be due and payable, in arrears, on the first day of each month, (ii) all Letter of Credit Fees payable hereunder, and all fronting fees and all commissions, other fees, charges and expenses provided for in Section 2.11A(k) or Section 2.11B(k) shall be due and payable, in arrears, on the first Business Day of each quarter; provided, that if an Event of Default has occurred and is continuing, such Letter of Credit Fees shall be due and payable, in arrears, on the first Business Day of each month, and (iii) all costs and expenses payable hereunder or under any of the other Loan Documents, and all other Lender Group Expenses shall be due and payable on the earlier of (x) the first day of the month following the date on which the applicable costs, expenses, or Lender Group Expenses were first incurred, or (y) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the applicable Loan Account pursuant to the provisions of the following sentence shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (y)). Borrowers hereby authorize Agent, from time to time without prior notice to Borrowers, to charge to the Loan Account of such Borrower (A) on the first day of each quarter (or, if an Event of Default has occurred and is continuing, on the first day of each month), all interest accrued during the prior quarter (or if an Event of Default has occurred and is continuing, month) on the Revolving Loans for the account of such Borrower hereunder, (B) on the first Business Day of each quarter (or, if an Event of Default has occurred and is continuing, on the first Business Day of each month), all Letter of Credit Fees accrued or chargeable hereunder during the prior quarter (or, if an Event of Default has occurred and is continuing, during the prior month) for the account of such Borrower, (C) as and when incurred or accrued, all fees and costs provided for in Section 2.10(a) or (c) and owing by such Borrower, (D) on the first day of each quarter (or, if an Event of Default has occurred and is continuing, during the prior month), the Unused Line Fee accrued during the prior quarter (or if an Event of Default has occurred and is continuing, month) pursuant to Section 2.10(b) (it being understood that such fee is an obligation of US Borrowers and shall be charged to the US Loan Account), (E) as and when due and payable, all other fees payable hereunder or under any of the other Loan Documents by such Borrower, (F) as and when incurred or accrued, all other Lender Group Expenses owing by such Borrower, and (G) as and when due and payable all other payment obligations payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products) owing by such Borrower. All amounts (including interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement) charged to the applicable Loan Account shall thereupon constitute Revolving Loans hereunder for the account of the applicable Borrower, shall constitute Obligations hereunder of such Borrower, and shall initially accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans (unless and until converted into Non-Base Rate Loans in accordance with the terms of this Agreement).

(e) Computation. All interest and fees chargeable under the Loan Documents shall be calculated on the basis of a 360 day year and actual days elapsed, other than for Base Rate Loans (including Canadian Revolving Loans bearing interest at the applicable Base Rate or CDOR Rate and UK Revolving Loans bearing interest at the applicable UK

 

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Floating Rate) which shall be calculated on the basis of 365 or 366 day year, as applicable, and actual days elapsed. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, that anything contained herein to the contrary notwithstanding, but subject to Section 2.17 in the case of the Canadian Borrowers, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the applicable Obligations to the extent of such excess.

2.7. Crediting Payments. The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available funds in the Applicable Currency made to Agent’s Applicable 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. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Applicable Account on a Business Day on or before 4:30 p.m. (or 4:30 p.m. London time in the case of a payment with respect to the UK Obligations). If any payment item is received into Agent’s Applicable Account on a non-Business Day or after 4:30 p.m. (or 4:30 p.m. London time in the case of a payment with respect to the UK Obligations) on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

2.8. Designated Account. Agent is authorized to make the Revolving Loans and each Issuing Lender is authorized to issue the Letters of Credit, under 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). US Borrowers agree to establish and maintain the US Designated Account with the US Designated Account Bank, Canadian Borrowers agree to establish and maintain the Canadian Designated Account with the Canadian Designated Bank, and UK Borrowers agree to establish and maintain the UK Designated Account with the UK Designated Account Bank, in each case, for the purpose of receiving the proceeds of the applicable Revolving Loans requested by such Borrower and made by Agent or the applicable Lenders hereunder. Unless otherwise agreed by Agent and Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the applicable Designated Account.

 

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2.9. Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an account on its books in the name of US Borrowers (the “US Loan Account”) on which US Borrowers will be charged with all US Revolving Loans (including US Extraordinary Advances and US Swing Loans) made by Agent, Swing Lender, or the Lenders to US Borrowers or for US Borrowers’ account, the US Letters of Credit issued or arranged by Issuing Lender for US Borrowers’ account, and with all other payment US Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses of US Borrowers with respect thereto. Agent shall maintain an account on its books in the name of Canadian Borrowers (the “Canadian Loan Account”) on which Canadian Borrowers will be charged with all Canadian Revolving Loans (including Canadian Extraordinary Advances and Canadian Swing Loans) made by Agent, Swing Lender, or the Lenders to Canadian Borrowers or for Canadian Borrowers’ account, the Canadian Letters of Credit issued or arranged by Issuing Lender for Canadian Borrowers’ account, and with all other payment Canadian Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses of Canadian Borrowers with respect thereto. Agent shall maintain an account on its books in the name of UK Borrowers (the “UK Loan Account”) on which UK Borrowers will be charged with all UK Revolving Loans (including UK Extraordinary Advances and UK Swing Loans) made by Agent, Swing Lender, or the Lenders to UK Borrowers or for UK Borrowers’ account, the UK Letters of Credit issued or arranged by Issuing Lender for UK Borrower’s account, and with all other payment UK Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses of UK Borrowers with respect thereto. In accordance with Section 2.7, the applicable Loan Account will be credited with all payments received by Agent from the applicable Borrower or for the applicable Borrower’s account. Agent shall make available to Borrowers monthly statements regarding the Loan Accounts, including the principal amount of Revolving Loans, 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 45 days after Agent first makes such a statement available to Borrowers, Borrowers shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

2.10. Fees.

(a) Agent Fees. Borrowers shall pay to Agent, for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

(b) Unused Line Fee. US Borrowers shall pay to Agent, for the ratable account of the Revolving Lenders with a US Revolver Commitment, an unused line fee (the “Unused Line Fee”) in an amount equal to the Applicable Unused Line Fee Percentage per annum times the result of (i) the aggregate amount of the US Revolver Commitments, less (ii) the sum of the Average US Revolver Usage (without giving effect to US Swing Loans), the Average UK Revolver Usage (without giving effect to UK Swing Loans) and the Average Canadian Revolver Usage (without giving effect to Canadian Swing Loans) during the immediately preceding month (or portion thereof), which Unused Line Fee shall be due and payable, in arrears, on the first day of each quarter (provided, that if an Event of Default has occurred and is continuing, such Unused Line Fee shall be due and payable, in arrears, on the first day of each month), from and after the Closing Date up to the first day of the quarter

 

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(provided, that if an Event of Default has occurred and is continuing, such Unused Line Fee shall be due and payable, in arrears, on the first day of each month) prior to the date on which the Obligations are paid in full, and on the date on which the Obligations are paid in full. For the avoidance of doubt, Swing Loans shall not reduce the amount of unused US Revolver Commitments solely for purposes of calculating the Unused Line Fee under this Section 2.10(b).

(c) Field Examination and Other Fees. Subject to Section 5.7(c) hereof, Borrowers shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus out-of-pocket expenses (including travel, meals, and lodging) for each field examination of any Loan Party or its Subsidiaries performed by or on behalf of Agent, and (ii) the reasonable fees, charges or expenses paid or incurred by Agent if it elects to employ the services of one or more third Persons to appraise the Collateral, or any portion thereof.

2.11A US Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of US Borrowers made in accordance herewith, and prior to the Maturity Date, US Issuing Lender agrees to issue a requested standby US Letter of Credit or a sight commercial US Letter of Credit for the account of US Borrowers or, for US Letters of Credit in an amount not to exceed the Dollar Equivalent of $15,000,000 in the aggregate for all Letters of Credit issued for the account of a Subsidiary that is not a Loan Party, on the account of a Subsidiary of the Parent. By submitting a request to US Issuing Lender for the issuance of a US Letter of Credit, US Borrowers shall be deemed to have requested that a US Issuing Lender issue the requested US Letter of Credit. Each request for the issuance of a US Letter of Credit, or the amendment, renewal, or extension of any outstanding US Letter of Credit, shall be (i) irrevocable and made in writing by an Authorized Person, (ii) delivered to Agent and US Issuing Lender via telefacsimile or other electronic method of transmission reasonably acceptable to Agent and US Issuing Lender and reasonably in advance of the requested date of issuance, amendment, renewal, or extension, and (iii) subject to US Issuing Lender’s authentication procedures with results satisfactory to US Issuing Lender. Each such request shall be in form and substance reasonably satisfactory to Agent and US Issuing Lender and (i) shall specify (A) the amount of such US Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such US Letter of Credit, (C) the proposed expiration date of such US Letter of Credit, (D) the name and address of the beneficiary of the US Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the US Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such US Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or US Issuing Lender may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that US Issuing Lender generally requests for US Letters of Credit in similar circumstances. US Issuing Lender’s records of the content of any such request will be conclusive. Anything contained herein to the contrary notwithstanding, US Issuing Lender may, but shall not be obligated to, issue a US Letter of Credit that supports the obligations of a US Loan Party or one of its Subsidiaries in respect of (x) a lease of real property to the extent that the face amount of such US Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such US Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

 

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(b) US Issuing Lender shall have no obligation to issue a US Letter of Credit if any of the following would result after giving effect to the requested issuance:

(i) the US Letter of Credit Usage would exceed the Letter of Credit Sublimit minus the Dollar Equivalent of the Canadian Letter of Credit Usage minus the Dollar Equivalent of the UK Letter of Credit Usage, or

(ii) the US Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of the outstanding amount of US Revolving Loans (including US Swing Loans), the Dollar Equivalent of the outstanding UK Revolving Loans (including UK Swing Loans) and the Dollar Equivalent of the outstanding Canadian Revolving Loans (including Canadian Swing Loans) at such time, or

(iii) the US Letter of Credit Usage would exceed the US Borrowing Base at such time less the outstanding principal balance of the US Revolving Loans (inclusive of US Swing Loans) at such time.

(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a US Letter of Credit, US Issuing Lender shall not be required to issue or arrange for such US Letter of Credit to the extent (i) the Defaulting Lender’s US Letter of Credit Exposure with respect to such US Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or (ii) US Issuing Lender has not otherwise entered into arrangements reasonably satisfactory to it and US Borrowers to eliminate US Issuing Lender’s risk with respect to the participation in such US Letter of Credit of the Defaulting Lender, which arrangements may include US Borrowers cash collateralizing such Defaulting Lender’s US Letter of Credit Exposure in accordance with Section 2.3(g)(ii). Additionally, US Issuing Lender shall have no obligation to issue or extend a US Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain US Issuing Lender from issuing such US Letter of Credit, or any law applicable to US Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over US Issuing Lender shall prohibit or request that US Issuing Lender refrain from the issuance of letters of credit generally or such US Letter of Credit in particular, (B) the issuance of such US Letter of Credit would violate one or more policies of US Issuing Lender applicable to letters of credit generally, or (C) amounts demanded to be paid under any US Letter of Credit will not or may not be in an Agreed L/C Currency.

(d) Any US Issuing Lender (other than Wells Fargo or any of its Affiliates) shall notify Agent in writing no later than the Business Day prior to the Business Day on which such US Issuing Lender issues any US Letter of Credit. In addition, each US Issuing Lender (other than Wells Fargo or any of its Affiliates) shall, on the first Business Day of each week, submit to Agent a report detailing the daily undrawn amount of each US Letter of Credit issued by such US Issuing Lender during the prior calendar week. US Borrowers and the Lender Group hereby acknowledge and agree that all Existing Letters of Credit shall constitute US Letters of Credit under this Agreement on and after the Closing Date with the same effect as if such

 

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Existing Letters of Credit were issued by US Issuing Lender at the request of US Borrowers on the Closing Date. Each US Letter of Credit shall be in form and substance reasonably acceptable to US Issuing Lender, including the requirement that the amounts payable thereunder must be payable in an Agreed L/C Currency. If US Issuing Lender makes a payment under a US Letter of Credit, US Borrowers shall pay to Agent an amount equal to the applicable US Letter of Credit Disbursement on the Business Day such US Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the US Letter of Credit Disbursement immediately and automatically shall be deemed to be a US Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to US Revolving Loans that are Base Rate Loans. If a US Letter of Credit Disbursement is deemed to be a US Revolving Loan hereunder, US Borrowers’ obligation to pay the amount of such US Letter of Credit Disbursement to US Issuing Lender shall be automatically converted into an obligation to pay the resulting US Revolving Loan. Promptly following receipt by Agent of any payment from US Borrowers pursuant to this paragraph, Agent shall distribute such payment to US Issuing Lender or, to the extent that any Revolving Lenders have made payments pursuant to Section 2.11A(e) to reimburse US Issuing Lender, then to such Revolving Lenders and US Issuing Lender as their interests may appear.

(e) Promptly following receipt of a notice of a US Letter of Credit Disbursement pursuant to Section 2.11A(d), each Revolving Lender agrees to fund its Pro Rata Share of any US Revolving Loan deemed made pursuant to Section 2.11A(d) on the same terms and conditions as if US Borrowers had requested the amount thereof as a US Revolving Loan and Agent shall promptly pay to US Issuing Lender the amounts so received by it from the Revolving Lenders. By the issuance of a US Letter of Credit (or an amendment, renewal, or extension of a US Letter of Credit) and without any further action on the part of US Issuing Lender or the Revolving Lenders, US Issuing Lender shall be deemed to have granted to each Revolving Lender with a US Revolver Commitment, and each Revolving Lender with a US Revolver Commitment shall be deemed to have purchased, a participation in each US Letter of Credit issued by US Issuing Lender, in an amount equal to its Pro Rata Share of such US Letter of Credit, and each such Revolving Lender agrees to pay to Agent, for the account of US Issuing Lender, such Revolving Lender’s Pro Rata Share of any US Letter of Credit Disbursement made by US Issuing Lender under the applicable US Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender with a US Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of US Issuing Lender, such Revolving Lender’s Pro Rata Share of each US Letter of Credit Disbursement made by US Issuing Lender and not reimbursed by US Borrowers on the date due as provided in Section 2.11A(d), or of any reimbursement payment that is required to be refunded (or that Agent or US Issuing Lender elects, based upon the advice of counsel, to refund) to US Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of US Issuing Lender, an amount equal to its respective Pro Rata Share of each US Letter of Credit Disbursement pursuant to this Section 2.11A(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender’s Pro Rata Share of a US Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of US Issuing Lender) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

 

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(f) US Borrowers agree to indemnify, defend and hold harmless each Letter of Credit Related Person (to the fullest extent permitted by law) from and against any Letter of Credit Indemnified Costs, and which arise out of or in connection with, or as a result of:

(i) any US Letter of Credit or any pre-advice of its issuance;

(ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with any US Letter of Credit;

(iii) any action or proceeding arising out of, or in connection with, any US Letter of Credit (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any US Letter of Credit, or for the wrongful dishonor of, or honoring a presentation under, any US Letter of Credit;

(iv) any independent undertakings issued by the beneficiary of any US Letter of Credit;

(v) any unauthorized instruction or request made to US Issuing Lender in connection with any US Letter of Credit or requested US Letter of Credit, or any error, omission, interruption or delay in such instruction or request, whether transmitted by mail, courier, electronic transmission, SWIFT, or any other telecommunication including communications through a correspondent;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed, indemnified or compensated in connection with any US Letter of Credit;

(vii) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of US Letter of Credit proceeds or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties in connection with a US Letter of Credit other than the Letter of Credit Related Person;

(ix) any prohibition on payment or delay in payment of any amount payable by US Issuing Lender to a beneficiary or transferee beneficiary of a US Letter of Credit arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

(x) US Issuing Lender’s performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation;

(xi) Any foreign language translation provided to US Issuing Lender in connection with any US Letter of Credit;

 

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(xii) Any foreign law or usage as it relates to US Issuing Lender’s issuance of a US Letter of Credit in support of a foreign guaranty including without limitation the expiration of such guaranty after the related US Letter of Credit expiration date and any resulting drawing paid by US Issuing Lender in connection therewith; or

(xiii) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person related to a US Letter of Credit;

provided, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence, bad faith or willful misconduct of the Letter of Credit Related Person claiming indemnity. US Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this Section 2.11A(f). If and to the extent that the obligations of US Borrowers under this Section 2.11A(f) are unenforceable for any reason, US Borrowers agree to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law. This indemnification provision shall survive termination of this Agreement and all US Letters of Credit.

(g) The liability of US Issuing Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any US Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by US Borrowers that are caused by US Issuing Lender’s gross negligence, bad faith or willful misconduct in (i) honoring a presentation under a US Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such US Letter of Credit, (ii) failing to honor a presentation under a US Letter of Credit that strictly complies with the terms and conditions of such US Letter of Credit or (iii) retaining Drawing Documents presented under a US Letter of Credit. US Borrowers’ aggregate remedies against US Issuing Lender and any US Letter of Credit Related Person for wrongfully honoring a presentation under any US Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by US Borrowers to US Issuing Lender in respect of the honored presentation in connection with such US Letter of Credit under Section 2.11A(d), plus interest at the rate then applicable to US Revolving Loans that are Base Rate Loans hereunder. US Borrowers shall take action to avoid and mitigate the amount of any damages claimed against US Issuing Lender or any other US Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the US Letters of Credit. Any claim by US Borrowers under or in connection with any US Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by US Borrowers as a result of the breach or alleged wrongful conduct complained of, and (y) the amount (if any) of the loss that would have been avoided had US Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing US Issuing Lender to effect a cure.

 

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(h) US Borrowers are responsible for the final text of the US Letter of Credit as issued by US Issuing Lender, irrespective of any assistance US Issuing Lender may provide such as drafting or recommending text or by US Issuing Lender’s use or refusal to use text submitted by US Borrowers. US Borrowers understand that the final form of any US Letter of Credit may be subject to such revisions and changes as are deemed necessary or appropriate by US Issuing Lender, and US Borrowers hereby consent to such revisions and changes not materially different from the application executed in connection therewith. US Borrowers are solely responsible for the suitability of the US Letter of Credit for US Borrowers’ purposes. If US Borrowers request US Issuing Lender to issue a US Letter of Credit for an affiliated or unaffiliated third party (a “Account Party”), (i) such Account Party shall have no rights against US Issuing Lender; (ii) US Borrowers shall be responsible for the application and obligations under this Agreement; and (iii) communications (including notices) related to the respective US Letter of Credit shall be among US Issuing Lender and US Borrowers. US Borrowers will examine the copy of the US Letter of Credit and any other documents sent by US Issuing Lender in connection therewith and shall promptly notify US Issuing Lender (not later than three (3) Business Days following US Borrowers’ receipt of documents from US Issuing Lender) of any non-compliance with US Borrowers’ instructions and of any discrepancy in any document under any presentment or other irregularity. US Borrowers understand and agree that US Issuing Lender is not required to extend the expiration date of any US Letter of Credit for any reason. With respect to any US Letter of Credit containing an “automatic amendment” to extend the expiration date of such US Letter of Credit, US Issuing Lender, in its sole and absolute discretion, may give notice of nonrenewal of such US Letter of Credit and, if US Borrowers do not at any time want the then current expiration date of such US Letter of Credit to be extended, US Borrowers will so notify Agent and US Issuing Lender at least 30 calendar days before US Issuing Lender is required to notify the beneficiary of such US Letter of Credit or any advising bank of such non-extension pursuant to the terms of such US Letter of Credit.

(i) US Borrowers’ reimbursement and payment obligations under this Section 2.11A are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any US Letter of Credit, any Issuer Document, this Agreement or any Loan Document or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable US Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such US Letter of Credit;

(iii) US Issuing Lender or any of its branches or Affiliates being the beneficiary of any US Letter of Credit;

(iv) US Issuing Lender or any correspondent honoring a drawing against a Drawing Document up to the amount available under any US Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the US Letter of Credit;

 

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(v) the existence of any claim, set-off, defense or other right that any Parent or any of their Subsidiaries may have at any time against any beneficiary or transferee beneficiary, any assignee of proceeds, US Issuing Lender or any other Person;

(vi) US Issuing Lender or any correspondent honoring a drawing upon receipt of an electronic presentation under a US Letter of Credit requiring the same, regardless of whether the original Drawing Documents arrive at US Issuing Lender’s counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.11A(i), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, Parents’ or any of their Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any US Letter of Credit, whether against US Issuing Lender, the beneficiary or any other Person; or

(viii) the fact that any Default or Event of Default shall have occurred and be continuing;

provided, that subject to Section 2.11A(g) above, the foregoing shall not release US Issuing Lender from such liability to US Borrowers as may be determined in a final, non-appealable judgment of a court of competent jurisdiction against US Issuing Lender following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of US Borrowers to US Issuing Lender arising under, or in connection with, this Section 2.11A or any US Letter of Credit.

(j) Without limiting any other provision of this Agreement, US Issuing Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to US Borrowers for, and US Issuing Lender’s rights and remedies against US Borrowers and the obligation of US Borrowers to reimburse US Issuing Lender for each drawing under each US Letter of Credit shall not be impaired by:

(i) honor of a presentation under any US Letter of Credit that on its face substantially complies with the terms and conditions of such US Letter of Credit, even if the US Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for payment under a US Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the US Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than US Issuing Lender’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the US Letter of Credit);

 

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(v) acting upon any instruction or request relative to a US Letter of Credit or requested US Letter of Credit that US Issuing Lender in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to any US Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the US Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the applicable US Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where US Issuing Lender has issued, confirmed, advised or negotiated such US Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any US Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by US Issuing Lender if subsequently US Issuing Lender or any court or other finder of fact determines such presentation should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by US Issuing Lender to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

(k) US Borrowers shall pay promptly (and in any event within one Business Day) upon demand to Agent for the account of US Issuing Lender as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the US Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11A(k)): (i) a fronting fee which shall be imposed by US Issuing Lender of 0.125% per annum times the average amount of the US Letter of Credit Usage during the immediately preceding

 

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quarter (or if an Event of Default has occurred, month) (or portion thereof), plus (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, US Issuing Lender, or by any adviser, confirming institution or entity or other nominated person, relating to US Letters of Credit, at the time of issuance of any US Letter of Credit and upon the occurrence of any other activity with respect to any US Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations). Notwithstanding the foregoing, if US Issuing Lender is a Person other than Wells Fargo, all fronting fees payable in respect of US Letters of Credit issued by such US Issuing Lender shall be paid by US Borrowers promptly upon written demand directly to such US Issuing Lender for its own account.

(l) If by reason of (x) any Change in Law, or (y) compliance by US Issuing Lender or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any US Letter of Credit issued or caused to be issued hereunder or hereby, or any US Loans or obligations to make US Loans hereunder or hereby, or

(ii) there shall be imposed on US Issuing Lender or any other member of the Lender Group any other condition regarding any US Letter of Credit, US Loans or obligations to make US Loans hereunder,

and the result of the foregoing is to increase, directly or indirectly, the cost to US Issuing Lender or any other member of the Lender Group of issuing, making, participating in, or maintaining any US Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify US Borrowers in writing, and US Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate US Issuing Lender or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to US Revolving Loans that are Base Rate Loans hereunder; provided, that (A) US Borrowers shall not be required to provide any compensation pursuant to this Section 2.11A(l) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to US Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this Section 2.11A(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

 

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(m) Each standby US Letter of Credit shall expire not later than the date that is 12 months after the date of the issuance of such US Letter of Credit; provided, that any standby US Letter of Credit may provide for the automatic extension thereof for any number of additional periods each of up to one year in duration; provided further, that with respect to any US Letter of Credit which extends beyond the Maturity Date, Letter of Credit Collateralization shall be provided therefor on or before the date that is five Business Days prior to the Maturity Date. Each commercial US Letter of Credit shall expire on the earlier of (i) 120 days after the date of the issuance of such commercial US Letter of Credit and (ii) five Business Days prior to the Maturity Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) US Availability shall at any time be less than zero, then on the Business Day following the date when the Administrative Borrower receives notice from Agent or the Required Lenders (or, if the maturity of the Obligations has been accelerated, Revolving Lenders with US Letter of Credit Exposure representing greater than 50% of the total US Letter Credit Exposure) demanding Letter of Credit Collateralization pursuant to this Section 2.11A(n) upon such demand, US Borrowers shall provide Letter of Credit Collateralization with respect to the then existing US Letter of Credit Usage. If US Borrowers fail to provide Letter of Credit Collateralization as required by this Section 2.11A(n), the Revolving Lenders may (and, upon direction of Agent, shall) advance, as US Revolving Loans the amount of the cash collateral required pursuant to the Letter of Credit Collateralization provision so that the then existing US Letter of Credit Usage is cash collateralized in accordance with the Letter of Credit Collateralization provision (whether or not the Revolver Commitments have terminated, an Overadvance exists or the conditions in Section 3 are satisfied).

(o) Unless otherwise expressly agreed by US Issuing Lender and US Borrowers when a US Letter of Credit is issued (including any such agreement applicable to an Existing US Letter of Credit), (i) the rules of the ISP shall apply to each standby US Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial US Letter of Credit.

(p) US Issuing Lender shall be deemed to have acted with due diligence and reasonable care if US Issuing Lender’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this Section 2.11A and any provision contained in any Issuer 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, the terms and provisions of this Section 2.11A shall control and govern.

(r) The provisions of this Section 2.11A shall survive the termination of this Agreement and the repayment in full of the Obligations with respect to any US Letters of Credit that remain outstanding.

(s) At US Borrowers’ costs and expense, US Borrowers shall execute and deliver to US Issuing Lender such additional certificates, instruments and/or documents and take such additional action as may be reasonably requested by US Issuing Lender to enable US Issuing Lender to issue any US Letter of Credit pursuant to this Agreement and related Issuer Document, to protect, exercise and/or enforce US Issuing Lenders’ rights and interests under this Agreement or to give effect to the terms and provisions of this Agreement or any Issuer

 

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Document. Each US Borrower irrevocably appoints US Issuing Lender as its attorney-in-fact and authorizes US Issuing Lender, without notice to US Borrowers, to execute and deliver ancillary documents and letters customary in the letter of credit business that may include but are not limited to advisements, indemnities, checks, bills of exchange and issuance documents. The power of attorney granted by the US Borrowers is limited solely to such actions related to the issuance, confirmation or amendment of any US Letter of Credit and to ancillary documents or letters customary in the letter of credit business. This appointment is coupled with an interest.

2.11B Canadian Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of Canadian Borrowers made in accordance herewith, and prior to the Maturity Date, Canadian Issuing Lender agrees to issue or, if Canadian Issuing Lender is WF Canada, to cause a Canadian Underlying Issuer (including as Canadian Issuing Lender’s agent) to issue, a requested standby Canadian Letter of Credit or a sight commercial Canadian Letter of Credit for the account of Canadian Borrowers or, for Canadian Letters of Credit in an amount not to exceed the Dollar Equivalent of $15,000,000 in the aggregate for all Letters of Credit issued for the account of a Subsidiary that is not a Loan Party, on the account of a Subsidiary of the Parent. If Canadian Issuing Lender is WF Canada, it may, at its option, elect to cause a Canadian Underlying Issuer to issue a requested Canadian Letter of Credit. If WF Canada makes such election, it agrees that it will enter into arrangements relative to the reimbursement of such Canadian Underlying Issuer (which may include, among other means, by becoming an applicant with respect to such Canadian Letter of Credit or entering into undertakings or other arrangements that provide for reimbursement of such Canadian Underlying Issuer with respect to such drawings under Canadian Letter of Credit; each such obligation or undertaking, irrespective of whether in writing, a “Canadian Reimbursement Undertaking”) with respect to Canadian Letters of Credit issued by such Canadian Underlying Issuer for the account of Canadian Borrowers. By submitting a request to Canadian Issuing Lender for the issuance of a Canadian Letter of Credit, Canadian Borrowers shall be deemed to have requested that (x) a Canadian Issuing Lender issue the requested Canadian Letter of Credit or (y) in the case in which WF Canada is the Canadian Issuing Lender a Canadian Underlying Issuer issue the requested Canadian Letter of Credit (and, in such case, to have requested WF Canada to issue a Canadian Reimbursement Undertaking with respect to such requested Canadian Letter of Credit). Each request for the issuance of a Canadian Letter of Credit, or the amendment, renewal, or extension of any outstanding Canadian Letter of Credit, shall be (i) irrevocable and made in writing by an Authorized Person, (ii) delivered to Agent and Canadian Issuing Lender via telefacsimile or other electronic method of transmission reasonably acceptable to Agent and Canadian Issuing Lender and reasonably in advance of the requested date of issuance, amendment, renewal, or extension, and (iii) subject to Canadian Issuing Lender’s authentication procedures with results satisfactory to Canadian Issuing Lender. Each such request shall be in form and substance reasonably satisfactory to Agent and Canadian Issuing Lender and (i) shall specify (A) the amount of such Canadian Letter of Credit and whether to be issued in Dollars or Canadian Dollars, (B) the date of issuance, amendment, renewal, or extension of such Canadian Letter of Credit, (C) the proposed expiration date of such Canadian Letter of Credit, (D) the name and address of the beneficiary of the Canadian Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Canadian Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew,

 

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or extend such Canadian Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent, Canadian Issuing Lender or Canadian Underlying Issuer may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that Canadian Issuing Lender or Canadian Underlying Issuer generally requests for Canadian Letters of Credit in similar circumstances. Canadian Issuing Lender’s records of the content of any such request will be conclusive. Anything contained herein to the contrary notwithstanding, Canadian Issuing Lender may, but shall not be obligated to, issue a Canadian Letter of Credit that supports the obligations of a Canadian Loan Party or one of its Subsidiaries in respect of (x) a lease of real property to the extent that the face amount of such Canadian Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such Canadian Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

(b) Canadian Issuing Lender shall have no obligation to issue a Canadian Letter of Credit or a Canadian Reimbursement Undertaking in respect of a Canadian Letter of Credit, in either case, if any of the following would result after giving effect to the requested issuance:

(i) the Dollar Equivalent of the Canadian Letter of Credit Usage would exceed the Letter of Credit Sublimit minus the US Letter of Credit Usage minus the UK Letter of Credit Usage, or

(ii) the Dollar Equivalent of the Canadian Letter of Credit Usage would exceed the Canadian Maximum Revolver Amount less the Dollar Equivalent of the outstanding Canadian Revolving Loans (including Canadian Swing Loans) at such time, or

(iii) the Dollar Equivalent of the Canadian Letter of Credit Usage would exceed the Canadian Borrowing Base at such time less the outstanding principal balance of the Dollar Equivalent of the Canadian Revolving Loans (inclusive of Canadian Swing Loans) at such time, or

(iv) the Dollar Equivalent of the Canadian Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of the Dollar Equivalent of the outstanding Canadian Revolving Loans, the Dollar Equivalent of UK Revolver Usage and the US Revolver Usage, or

(v) the Dollar Equivalent of the Canadian Letter of Credit Usage plus the Dollar Equivalent of the UK Letter of Credit Usage would exceed $15,000,000.

(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a Canadian Letter of Credit, Canadian Issuing Lender shall not be required to issue or arrange for such Canadian Letter of Credit or any applicable Canadian Reimbursement Undertaking to the extent (i) the Defaulting Lender’s Canadian Letter of Credit Exposure with respect to such Canadian Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or (ii) Canadian Issuing Lender has not otherwise entered into arrangements reasonably satisfactory to it and Canadian Borrowers to eliminate Canadian Issuing Lender’s risk with respect to the

 

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participation in such Canadian Letter of Credit or any applicable Canadian Reimbursement Undertaking of the Defaulting Lender, which arrangements may include Canadian Borrowers cash collateralizing such Defaulting Lender’s Canadian Letter of Credit Exposure in accordance with Section 2.3(g)(ii). Additionally, Canadian Issuing Lender shall have no obligation to issue or extend a Canadian Letter of Credit or a Canadian Reimbursement Undertaking in respect of a Canadian Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Canadian Issuing Lender from issuing such Canadian Letter of Credit or a Canadian Reimbursement Undertaking, or a Canadian Underlying Issuer from issuing such Canadian Letter of Credit, or any law applicable to Canadian Issuing Lender or Canadian Underlying Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Canadian Issuing Lender or Canadian Underlying Issuer shall prohibit or request that Canadian Issuing Lender or Canadian Underlying Issuer refrain from the issuance of letters of credit generally or such Canadian Letter of Credit or a Canadian Reimbursement Undertaking in particular, (B) the issuance of such Canadian Letter of Credit or Canadian Reimbursement Undertaking would violate one or more policies of Canadian Issuing Lender or Canadian Underlying Issuer applicable to letters of credit generally, or (C) amounts demanded to be paid under any Canadian Letter of Credit will not or may not be in United States Dollars or Canadian Dollars.

(d) Any Canadian Issuing Lender (other than WF Canada or any of its Affiliates) shall notify Agent in writing no later than the Business Day prior to the Business Day on which such Canadian Issuing Lender issues any Canadian Letter of Credit or Canadian Reimbursement Undertaking. In addition, each Canadian Issuing Lender (other than WF Canada or any of its Affiliates) shall, on the first Business Day of each week, submit to Agent a report detailing the daily undrawn amount of each Canadian Letter of Credit issued by such Canadian Issuing Lender during the prior calendar week. Each Canadian Letter of Credit shall be in form and substance reasonably acceptable to Canadian Issuing Lender and Canadian Underlying Issuer, including the requirement that the amounts payable thereunder must be payable in Dollars or Canadian Dollars. If Canadian Issuing Lender makes a payment under a Canadian Letter of Credit or a Canadian Reimbursement Undertaking, Canadian Borrowers shall pay to Agent an amount equal to the applicable Canadian Letter of Credit Disbursement on the Business Day such Canadian Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Canadian Letter of Credit Disbursement immediately and automatically shall be deemed to be a Canadian Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to Canadian Revolving Loans that are Base Rate Loans. If a Canadian Letter of Credit Disbursement is deemed to be a Canadian Revolving Loan hereunder, Canadian Borrowers’ obligation to pay the amount of such Canadian Letter of Credit Disbursement to Canadian Issuing Lender shall be automatically converted into an obligation to pay the resulting Canadian Revolving Loan. Promptly following receipt by Agent of any payment from Canadian Borrowers pursuant to this paragraph, Agent shall distribute such payment to Canadian Issuing Lender or, to the extent that any Revolving Lenders have made payments pursuant to Section 2.11B(e) to reimburse Canadian Issuing Lender, then to such Revolving Lenders and Canadian Issuing Lender as their interests may appear.

 

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(e) Promptly following receipt of a notice of a Canadian Letter of Credit Disbursement pursuant to Section 2.11B(d), each Revolving Lender agrees to fund its Pro Rata Share of any Canadian Revolving Loan deemed made pursuant to Section 2.11B(d) on the same terms and conditions as if Canadian Borrowers had requested the amount thereof as a Canadian Revolving Loan and Agent shall promptly pay to Canadian Issuing Lender the amounts so received by it from the Revolving Lenders. By the issuance of a Canadian Letter of Credit or Canadian Reimbursement Undertaking (or an amendment, renewal, or extension of a Canadian Letter of Credit or Canadian Reimbursement Undertaking) and without any further action on the part of Canadian Issuing Lender or the Revolving Lenders, Canadian Issuing Lender shall be deemed to have granted to each Revolving Lender with a Canadian Revolver Commitment, and each Revolving Lender with a Canadian Revolver Commitment shall be deemed to have purchased, a participation in each Canadian Letter of Credit issued by Canadian Issuing Lender and each Canadian Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such Canadian Letter of Credit or Canadian Reimbursement Undertaking, and each such Revolving Lender agrees to pay to Agent, for the account of Canadian Issuing Lender, such Revolving Lender’s Pro Rata Share of any Canadian Letter of Credit Disbursement made by Canadian Issuing Lender under the applicable Canadian Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender with a Canadian Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of Canadian Issuing Lender, such Revolving Lender’s Pro Rata Share of each Canadian Letter of Credit Disbursement made by Canadian Issuing Lender and not reimbursed by Canadian Borrowers on the date due as provided in Section 2.11B(d), or of any reimbursement payment that is required to be refunded (or that Agent or Canadian Issuing Lender elects, based upon the advice of counsel, to refund) to Canadian Borrowers for any reason. Each Revolving Lender with a Canadian Revolver Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of Canadian Issuing Lender, an amount equal to its respective Pro Rata Share of each Canadian Letter of Credit Disbursement pursuant to this Section 2.11B(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender’s Pro Rata Share of a Canadian Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Canadian Issuing Lender) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

(f) Canadian Borrowers agree to indemnify, defend and hold harmless each Letter of Credit Related Person (to the fullest extent permitted by law) from and against any Letter of Credit Indemnified Costs, and which arise out of or in connection with, or as a result of:

(i) any Canadian Letter of Credit or Canadian Reimbursement Undertaking or any pre-advice of its issuance;

(ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with any Canadian Letter of Credit or Canadian Reimbursement Undertaking;

 

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(iii) any action or proceeding arising out of, or in connection with, any Canadian Letter of Credit or Canadian Reimbursement Undertaking (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any Canadian Letter of Credit or Canadian Reimbursement Undertaking, or for the wrongful dishonor of, or honoring a presentation under, any Canadian Letter of Credit;

(iv) any independent undertakings issued by the beneficiary of any Canadian Letter of Credit;

(v) any unauthorized instruction or request made to Canadian Issuing Lender or Canadian Underlying Issuer in connection with any Canadian Letter of Credit or Canadian Reimbursement Undertaking or requested Canadian Letter of Credit or Canadian Reimbursement Undertaking, or any error, omission, interruption or delay in such instruction or request, whether transmitted by mail, courier, electronic transmission, SWIFT, or any other telecommunication including communications through a correspondent;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed, indemnified or compensated in connection with any Canadian Letter of Credit or Canadian Reimbursement Undertaking;

(vii) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of Canadian Letter of Credit proceeds or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties in connection with a Canadian Letter of Credit or Canadian Reimbursement Undertaking other than the Letter of Credit Related Person;

(ix) any prohibition on payment or delay in payment of any amount payable by Canadian Issuing Lender or Canadian Underlying Issuer to a beneficiary or transferee beneficiary of a Canadian Letter of Credit or Canadian Reimbursement Undertaking arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

(x) Canadian Issuing Lender’s or Canadian Underlying Issuer’s performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation in connection with a Canadian Letter of Credit;

(xi) Any foreign language translation provided to Canadian Issuing Lender in connection with any Canadian Letter of Credit;

(xii) Any foreign law or usage as it relates to Canadian Issuing Lender’s or Canadian Underlying Issuer’s issuance of a Canadian Letter of Credit or Canadian Reimbursement Undertaking in support of a foreign guaranty including without limitation the expiration of such guaranty after the related Canadian Letter of Credit or Canadian Reimbursement Undertaking expiration date and any resulting drawing paid by Canadian Issuing Lender or Canadian Underlying Issuer in connection therewith; or

 

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(xiii) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person related to a Canadian Letter of Credit or Canadian Reimbursement Undertaking;

provided, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence, bad faith or willful misconduct of the Letter of Credit Related Person claiming indemnity. Canadian Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this Section 2.11B(f). If and to the extent that the obligations of Canadian Borrowers under this Section 2.11B(f) are unenforceable for any reason, Canadian Borrowers agree to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law. This indemnification provision shall survive termination of this Agreement and all Canadian Letters of Credit or Canadian Reimbursement Undertakings.

(g) The liability of Canadian Issuing Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any Canadian Letter of Credit or Canadian Reimbursement Undertaking (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Canadian Borrowers that are caused by Canadian Issuing Lender’s gross negligence, bad faith or willful misconduct in (i) honoring a presentation under a Canadian Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Canadian Letter of Credit, (ii) failing to honor a presentation under a Canadian Letter of Credit that strictly complies with the terms and conditions of such Canadian Letter of Credit or (iii) retaining Drawing Documents presented under a Canadian Letter of Credit. Canadian Borrowers’ aggregate remedies against Canadian Issuing Lender and any Canadian Letter of Credit Related Person for wrongfully honoring a presentation under any Canadian Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Canadian Borrowers to Canadian Issuing Lender in respect of the honored presentation in connection with such Canadian Letter of Credit under Section 2.11B(d), plus interest at the rate then applicable to Canadian Revolving Loans that are Base Rate Loans hereunder. Canadian Borrowers shall take action to avoid and mitigate the amount of any damages claimed against Canadian Issuing Lender or any other Canadian Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Canadian Letters of Credit. Any claim by Canadian Borrowers under or in connection with any Canadian Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Canadian Borrowers as a result of the breach or alleged wrongful conduct complained of, and (y) the amount (if any) of the loss that would have been avoided had Canadian Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Canadian Issuing Lender or Canadian Underlying Issuer to effect a cure.

 

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(h) Canadian Borrowers are responsible for the final text of the Canadian Letter of Credit as issued by Canadian Issuing Lender or Canadian Underlying Issuer, irrespective of any assistance Canadian Issuing Lender or Canadian Underlying Issuer may provide such as drafting or recommending text or by Canadian Issuing Lender’s or Canadian Underlying Issuer’s use or refusal to use text submitted by Canadian Borrowers. Canadian Borrowers understand that the final form of any Canadian Letter of Credit may be subject to such revisions and changes as are deemed necessary or appropriate by Canadian Issuing Lender or Canadian Underlying Issuer, and Canadian Borrowers hereby consent to such revisions and changes not materially different from the application executed in connection therewith. Canadian Borrowers are solely responsible for the suitability of the Canadian Letter of Credit for Canadian Borrowers’ purposes. If Canadian Borrowers request Canadian Issuing Lender to issue a Canadian Letter of Credit for an Account Party, (i) such Account Party shall have no rights against Canadian Issuing Lender or Canadian Underlying Issuer; (ii) Canadian Borrowers shall be responsible for the application and obligations under this Agreement; and (iii) communications (including notices) related to the respective Canadian Letter of Credit shall be among Canadian Issuing Lender, Canadian Underlying Issuer and Canadian Borrowers. Canadian Borrowers will examine the copy of the Canadian Letter of Credit and any other documents sent by Canadian Issuing Lender in connection therewith and shall promptly notify Canadian Issuing Lender (not later than three (3) Business Days following Canadian Borrowers’ receipt of documents from Canadian Issuing Lender) of any non-compliance with Canadian Borrowers’ instructions and of any discrepancy in any document under any presentment or other irregularity. Canadian Borrowers understand and agree that neither Canadian Issuing Lender nor Canadian Underlying Issuer is required to extend the expiration date of any Canadian Letter of Credit or Canadian Reimbursement Undertaking for any reason. With respect to any Canadian Letter of Credit or Canadian Reimbursement Undertaking containing an “automatic amendment” to extend the expiration date of such Canadian Letter of Credit or Canadian Reimbursement Undertaking, Canadian Issuing Lender or Canadian Underlying Issuer, in its sole and absolute discretion, may give notice of nonrenewal of such Canadian Letter of Credit or Canadian Reimbursement Undertaking and, if Canadian Borrowers do not at any time want the then current expiration date of such Canadian Letter of Credit or Canadian Reimbursement Undertaking to be extended, Canadian Borrowers will so notify Agent and Canadian Issuing Lender at least 30 calendar days before Canadian Issuing Lender is required to notify the beneficiary of such Canadian Letter of Credit or any advising bank of such non-extension pursuant to the terms of such Canadian Letter of Credit.

(i) Canadian Borrowers’ reimbursement and payment obligations under this Section 2.11B are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any Canadian Letter of Credit, any Canadian Reimbursement Undertaking, any Issuer Document, this Agreement or any Loan Document or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable Canadian Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such Canadian Letter of Credit;

 

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(iii) Canadian Issuing Lender or any of its branches or Affiliates or Canadian Underlying Issuer being the beneficiary of any Canadian Letter of Credit;

(iv) Canadian Issuing Lender or any correspondent or Canadian Underlying Issuer honoring a drawing against a Drawing Document up to the amount available under any Canadian Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the Canadian Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that any Parent or any of their Subsidiaries may have at any time against any beneficiary or transferee beneficiary, any assignee of proceeds, Canadian Issuing Lender, Canadian Underlying Issuer or any other Person;

(vi) Canadian Issuing Lender or any correspondent or Canadian Underling Issuer honoring a drawing upon receipt of an electronic presentation under a Canadian Letter of Credit or Canadian Reimbursement Undertaking requiring the same, regardless of whether the original Drawing Documents arrive at Canadian Issuing Lender’s or Canadian Underlying Issuer’s counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.11B(i), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, Parents’ or any of their Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Canadian Letter of Credit, whether against Canadian Issuing Lender, Canadian Underlying Issuer, the beneficiary or any other Person; or

(viii) the fact that any Default or Event of Default shall have occurred and be continuing;

provided, that subject to Section 2.11B(g) above, the foregoing shall not release Canadian Issuing Lender or Canadian Underlying Issuer from such liability to Canadian Borrowers as may be determined in a final, non-appealable judgment of a court of competent jurisdiction against Canadian Issuing Lender or Canadian Underlying Issuer following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Canadian Borrowers to Canadian Issuing Lender arising under, or in connection with, this Section 2.11B or any Canadian Letter of Credit or Canadian Reimbursement Undertaking or its correspondent.

(j) Without limiting any other provision of this Agreement, Canadian Issuing Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to Canadian Borrowers for, and Canadian Issuing Lender’s rights and remedies against Canadian Borrowers and the obligation of Canadian Borrowers to reimburse Canadian Issuing Lender for each drawing under each Canadian Letter of Credit and each Canadian Reimbursement Undertaking shall not be impaired by:

(i) honor of a presentation under any Canadian Letter of Credit that on its face substantially complies with the terms and conditions of such Canadian Letter of Credit, even if the Canadian Letter of Credit requires strict compliance by the beneficiary;

 

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(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for payment under a Canadian Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Canadian Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Canadian Issuing Lender’s or Canadian Underlying Issuer’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Canadian Letter of Credit);

(v) acting upon any instruction or request relative to a Canadian Letter of Credit or requested Canadian Letter of Credit that each of Canadian Issuing Lender and Canadian Underlying Issuer in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to any Canadian Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Canadian Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the applicable Canadian Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Canadian Issuing Lender or Canadian Underlying Issuer has issued, confirmed, advised or negotiated such Canadian Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Canadian Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Canadian Issuing Lender or Canadian Underlying Issuer, as applicable, if subsequently Canadian Issuing Lender or Canadian Underlying Issuer, as applicable, or any court or other finder of fact determines such presentation should have been honored;

 

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(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by Canadian Issuing Lender or Canadian Underlying Issuer, as applicable, to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

(k) Canadian Borrowers shall pay promptly upon demand to Agent for the account of Canadian Issuing Lender as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the Canadian Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11B(k)): (i) a fronting fee which shall be imposed by Canadian Issuing Lender of 0.125% per annum times the average amount of the Canadian Letter of Credit Usage during the immediately preceding quarter (or if an Event of Default has occurred, month) (or portion thereof), plus (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, Canadian Issuing Lender or Canadian Underlying Issuer, or by any adviser, confirming institution or entity or other nominated person, relating to Canadian Letters of Credit, at the time of issuance of any Canadian Letter of Credit and upon the occurrence of any other activity with respect to any Canadian Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations). Notwithstanding the foregoing, if Canadian Issuing Lender is a Person other than WF Canada, all fronting fees payable in respect of Canadian Letters of Credit issued by such Canadian Issuing Lender shall be paid by Canadian Borrowers promptly upon written demand directly to such Canadian Issuing Lender for its own account. Canadian Borrowers shall also pay directly to Canadian Underlying Issuer all of its fees, commissions and charges in respect of Canadian Letters of Credit issued by such Canadian Underlying Issuer upon written demand.

(l) If by reason of (x) any Change in Law, or (y) compliance by Canadian Issuing Lender, Canadian Underlying Issuer or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Canadian Letter of Credit or Canadian Reimbursement Undertaking issued or caused to be issued hereunder or hereby, or any Canadian Loans or obligations to make Canadian Loans hereunder or hereby, or

(ii) there shall be imposed on Canadian Issuing Lender or any other member of the Lender Group or Canadian Underlying Issuer any other condition regarding any Canadian Letter of Credit or Canadian Reimbursement Undertaking, Canadian Loans or obligations to make Canadian Loans hereunder,

 

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and the result of the foregoing is to increase, directly or indirectly, the cost to Canadian Issuing Lender or any other member of the Lender Group or Canadian Underlying Issuer of issuing, making, participating in, or maintaining any Canadian Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Canadian Borrowers in writing, and Canadian Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate Canadian Issuing Lender or any other member of the Lender Group or Canadian Underlying Issuer for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Canadian Revolving Loans that are Base Rate Loans hereunder; provided, that (A) Canadian Borrowers shall not be required to provide any compensation pursuant to this Section 2.11B(l) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Canadian Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this Section 2.11B(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

(m) Each standby Canadian Letter of Credit shall expire not later than the date that is 12 months after the date of the issuance of such Canadian Letter of Credit; provided, that any standby Canadian Letter of Credit may provide for the automatic extension thereof for any number of additional periods each of up to one year in duration; provided further, that with respect to any Canadian Letter of Credit which extends beyond the Maturity Date, Letter of Credit Collateralization shall be provided therefor on or before the date that is five Business Days prior to the Maturity Date. Each commercial Canadian Letter of Credit shall expire on the earlier of (i) 120 days after the date of the issuance of such commercial Canadian Letter of Credit and (ii) five Business Days prior to the Maturity Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) Canadian Availability shall at any time be less than zero, then on the Business Day following the date when the Administrative Borrower receives notice from Agent or the Required Lenders (or, if the maturity of the Obligations has been accelerated, Revolving Lenders with Canadian Letter of Credit Exposure representing greater than 50% of the total Canadian Letter Credit Exposure) demanding Letter of Credit Collateralization pursuant to this Section 2.11B(n) upon such demand, Canadian Borrowers shall provide Letter of Credit Collateralization with respect to the then existing Canadian Letter of Credit Usage. If Canadian Borrowers fail to provide Letter of Credit Collateralization as required by this Section 2.11B(n), the Revolving Lenders may (and, upon direction of Agent, shall) advance, as Canadian Revolving Loans the amount of the cash collateral required pursuant to the Letter of Credit Collateralization provision so that the then existing Canadian Letter of Credit Usage is cash collateralized in accordance with the Letter of Credit Collateralization provision (whether or not the Revolver Commitments have terminated, an Overadvance exists or the conditions in Section 3 are satisfied).

 

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(o) Unless otherwise expressly agreed by Canadian Issuing Lender and Canadian Borrowers when a Canadian Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Canadian Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Canadian Letter of Credit.

(p) Canadian Issuing Lender and Canadian Underlying Issuer shall be deemed to have acted with due diligence and reasonable care if such Person’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this Section 2.11B and any provision contained in any Issuer 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, the terms and provisions of this Section 2.11B shall control and govern.

(r) The provisions of this Section 2.11B shall survive the termination of this Agreement and the repayment in full of the Obligations with respect to any Canadian Letters of Credit or Canadian Reimbursement Undertakings that remain outstanding.

(s) At Canadian Borrowers’ costs and expense, Canadian Borrowers shall execute and deliver to Canadian Issuing Lender or Canadian Underlying Issuer such additional certificates, instruments and/or documents and take such additional action as may be reasonably requested by Canadian Issuing Lender or Canadian Underlying Issuer to enable Canadian Issuing Lender or Canadian Underlying Issuer to issue any Canadian Letter of Credit or Canadian Reimbursement Undertaking pursuant to this Agreement and related Issuer Document, to protect, exercise and/or enforce Canadian Issuing Lenders’ and Canadian Underlying Issuers’ rights and interests under this Agreement or to give effect to the terms and provisions of this Agreement or any Issuer Document. Each Canadian Borrower irrevocably appoints Canadian Issuing Lender and Canadian Underlying Issuer as its attorney-in-fact and authorizes Canadian Issuing Lender and Canadian Underlying Issuer, without notice to Canadian Borrowers, to execute and deliver ancillary documents and letters customary in the letter of credit business that may include but are not limited to advisements, indemnities, checks, bills of exchange and issuance documents. The power of attorney granted by the Canadian Borrowers is limited solely to such actions related to the issuance, confirmation or amendment of any Canadian Letter of Credit and Canadian Reimbursement Undertakings and to ancillary documents or letters customary in the letter of credit business. This appointment is coupled with an interest.

2.11C UK Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of UK Borrowers made in accordance herewith, and prior to the Maturity Date, UK Issuing Lender agrees to issue a requested standby UK Letter of Credit or a sight commercial UK Letter of Credit for the account of UK Borrowers or, for UK Letters of Credit in an amount not to exceed the Dollar Equivalent of $15,000,000 in the aggregate for all Letters of Credit issued for the account of a Subsidiary that is not a Loan Party, on the account of a Subsidiary of the Parent. By submitting a request to UK Issuing Lender for the issuance of a UK Letter of Credit, UK Borrowers shall be deemed to have requested that a UK Issuing Lender issue the requested UK Letter of Credit. Each request for the issuance of a UK Letter of Credit, or the amendment, renewal, or extension of any outstanding UK Letter of Credit, shall be (i) irrevocable and made

 

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in writing by an Authorized Person, (ii) delivered to Agent and UK Issuing Lender via telefacsimile or other electronic method of transmission reasonably acceptable to Agent and UK Issuing Lender and reasonably in advance of the requested date of issuance, amendment, renewal, or extension, and (iii) subject to UK Issuing Lender’s authentication procedures with results satisfactory to UK Issuing Lender. Each such request shall be in form and substance reasonably satisfactory to Agent and UK Issuing Lender and (i) shall specify (A) the amount of such UK Letter of Credit and whether to be issued in Dollars or Sterling, (B) the date of issuance, amendment, renewal, or extension of such UK Letter of Credit, (C) the proposed expiration date of such UK Letter of Credit, (D) the name and address of the beneficiary of the UK Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the UK Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such UK Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or UK Issuing Lender may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that UK Issuing Lender generally requests for UK Letters of Credit in similar circumstances. UK Issuing Lender’s records of the content of any such request will be conclusive. Anything contained herein to the contrary notwithstanding, UK Issuing Lender may, but shall not be obligated to, issue a UK Letter of Credit that supports the obligations of a UK Loan Party or one of its Subsidiaries in respect of (x) a lease of real property to the extent that the face amount of such UK Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such UK Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

(b) UK Issuing Lender shall have no obligation to issue a UK Letter of Credit if any of the following would result after giving effect to the requested issuance:

(i) the Dollar Equivalent of the UK Letter of Credit Usage would exceed the Letter of Credit Sublimit minus the US Letter of Credit Usage minus the Canadian Letter of Credit Usage, or

(ii) the Dollar Equivalent of the UK Letter of Credit Usage would exceed the UK Maximum Revolver Amount less the Dollar Equivalent of the outstanding UK Revolving Loans (including UK Swing Loans) at such time, or

(iii) the Dollar Equivalent of the UK Letter of Credit Usage would exceed the UK Borrowing Base at such time less the outstanding principal balance of the Dollar Equivalent of the UK Revolving Loans (inclusive of UK Swing Loans) at such time, or

(iv) the Dollar Equivalent of the UK Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of the Dollar Equivalent of the outstanding UK Revolving Loans, the Dollar Equivalent of Canadian Revolver Usage and the US Revolver Usage, or

(v) the Dollar Equivalent of the UK Letter of Credit Usage plus the Dollar Equivalent of the Canadian Letter of Credit Usage would exceed $15,000,000.

 

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(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a UK Letter of Credit, UK Issuing Lender shall not be required to issue or arrange for such UK Letter of Credit to the extent (i) the Defaulting Lender’s UK Letter of Credit Exposure with respect to such UK Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or (ii) UK Issuing Lender has not otherwise entered into arrangements reasonably satisfactory to it and UK Borrowers to eliminate UK Issuing Lender’s risk with respect to the participation in such UK Letter of Credit of the Defaulting Lender, which arrangements may include UK Borrowers cash collateralizing such Defaulting Lender’s UK Letter of Credit Exposure in accordance with Section 2.3(g)(ii). Additionally, UK Issuing Lender shall have no obligation to issue or extend a UK Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain UK Issuing Lender from issuing such UK Letter of Credit, or any law applicable to UK Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over UK Issuing Lender shall prohibit or request that UK Issuing Lender refrain from the issuance of letters of credit generally or such UK Letter of Credit in particular, (B) the issuance of such UK Letter of Credit would violate one or more policies of UK Issuing Lender applicable to letters of credit generally, or (C) amounts demanded to be paid under any UK Letter of Credit will not or may not be in United States Dollars or Sterling.

(d) Any UK Issuing Lender (other than Wells Fargo or any of its Affiliates) shall notify Agent in writing no later than the Business Day prior to the Business Day on which such UK Issuing Lender issues any UK Letter of Credit. In addition, each UK Issuing Lender (other than Wells Fargo or any of its Affiliates) shall, on the first Business Day of each week, submit to Agent a report detailing the daily undrawn amount of each UK Letter of Credit issued by such UK Issuing Lender during the prior calendar week. Each UK Letter of Credit shall be in form and substance reasonably acceptable to UK Issuing Lender, including the requirement that the amounts payable thereunder must be payable in Dollars or Sterling. If UK Issuing Lender makes a payment under a UK Letter of Credit, UK Borrowers shall pay to Agent an amount equal to the applicable UK Letter of Credit Disbursement on the Business Day such UK Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the UK Letter of Credit Disbursement immediately and automatically shall be deemed to be a UK Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to UK Revolving Loans that are Base Rate Loans. If a UK Letter of Credit Disbursement is deemed to be a UK Revolving Loan hereunder, UK Borrowers’ obligation to pay the amount of such UK Letter of Credit Disbursement to UK Issuing Lender shall be automatically converted into an obligation to pay the resulting UK Revolving Loan. Promptly following receipt by Agent of any payment from UK Borrowers pursuant to this paragraph, Agent shall distribute such payment to UK Issuing Lender or, to the extent that any Revolving Lenders have made payments pursuant to Section 2.11C(e) to reimburse UK Issuing Lender, then to such Revolving Lenders and UK Issuing Lender as their interests may appear.

(e) Promptly following receipt of a notice of a UK Letter of Credit Disbursement pursuant to Section 2.11C(d), each Revolving Lender agrees to fund its Pro Rata Share of any UK Revolving Loan deemed made pursuant to Section 2.11C(d) on the same terms and conditions as if UK Borrowers had requested the amount thereof as a UK Revolving Loan and Agent shall promptly pay to UK Issuing Lender the amounts so received by it from the

 

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Revolving Lenders. By the issuance of a UK Letter of Credit (or an amendment, renewal, or extension of a UK Letter of Credit) and without any further action on the part of UK Issuing Lender or the Revolving Lenders, UK Issuing Lender shall be deemed to have granted to each Revolving Lender with a UK Revolver Commitment, and each Revolving Lender with a UK Revolver Commitment shall be deemed to have purchased, a participation in each UK Letter of Credit issued by UK Issuing Lender, in an amount equal to its Pro Rata Share of such UK Letter of Credit, and each such Revolving Lender agrees to pay to Agent, for the account of UK Issuing Lender, such Revolving Lender’s Pro Rata Share of any UK Letter of Credit Disbursement made by UK Issuing Lender under the applicable UK Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender with a UK Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of UK Issuing Lender, such Revolving Lender’s Pro Rata Share of each UK Letter of Credit Disbursement made by UK Issuing Lender and not reimbursed by UK Borrowers on the date due as provided in Section 2.11C(d), or of any reimbursement payment that is required to be refunded (or that Agent or UK Issuing Lender elects, based upon the advice of counsel, to refund) to UK Borrowers for any reason. Each Revolving Lender with a UK Revolver Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of UK Issuing Lender, an amount equal to its respective Pro Rata Share of each UK Letter of Credit Disbursement pursuant to this Section 2.11C(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender’s Pro Rata Share of a UK Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of UK Issuing Lender) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

(f) UK Borrowers agree to indemnify, defend and hold harmless each Letter of Credit Related Person (to the fullest extent permitted by law) from and against any Letter of Credit Indemnified Costs, and which arise out of or in connection with, or as a result of:

(i) any UK Letter of Credit or any pre-advice of its issuance;

(ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with any UK Letter of Credit;

(iii) any action or proceeding arising out of, or in connection with, any UK Letter of Credit (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any UK Letter of Credit, or for the wrongful dishonor of, or honoring a presentation under, any UK Letter of Credit;

(iv) any independent undertakings issued by the beneficiary of any UK Letter of Credit;

 

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(v) any unauthorized instruction or request made to UK Issuing Lender in connection with any UK Letter of Credit or requested UK Letter of Credit, or any error, omission, interruption or delay in such instruction or request, whether transmitted by mail, courier, electronic transmission, SWIFT, or any other telecommunication including communications through a correspondent;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed, indemnified or compensated in connection with any UK Letter of Credit;

(vii) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of UK Letter of Credit proceeds or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties in connection with a UK Letter of Credit other than the Letter of Credit Related Person;

(ix) any prohibition on payment or delay in payment of any amount payable by UK Issuing Lender to a beneficiary or transferee beneficiary of a UK Letter of Credit arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

(x) UK Issuing Lender’s performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation in connection with a UK Letter of Credit;

(xi) Any foreign language translation provided to UK Issuing Lender in connection with any UK Letter of Credit;

(xii) Any foreign law or usage as it relates to UK Issuing Lender’s issuance of a UK Letter of Credit in support of a foreign guaranty including without limitation the expiration of such guaranty after the related UK Letter of Credit expiration date and any resulting drawing paid by UK Issuing Lender in connection therewith; or

(xiii) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person related to a UK Letter of Credit;

provided, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence, bad faith or willful misconduct of the Letter of Credit Related Person claiming indemnity. UK Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this Section 2.11C(f). If and to the extent that the obligations of UK Borrowers under this Section 2.11C(f) are unenforceable for any reason, UK Borrowers agree to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law. This indemnification provision shall survive termination of this Agreement and all UK Letters of Credit.

 

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(g) The liability of UK Issuing Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any UK Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by UK Borrowers that are caused by UK Issuing Lender’s gross negligence, bad faith or willful misconduct in (i) honoring a presentation under a UK Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such UK Letter of Credit, (ii) failing to honor a presentation under a UK Letter of Credit that strictly complies with the terms and conditions of such UK Letter of Credit or (iii) retaining Drawing Documents presented under a UK Letter of Credit. UK Borrowers’ aggregate remedies against UK Issuing Lender and any UK Letter of Credit Related Person for wrongfully honoring a presentation under any UK Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by UK Borrowers to UK Issuing Lender in respect of the honored presentation in connection with such UK Letter of Credit under Section 2.11C(d), plus interest at the rate then applicable to UK Revolving Loans that are Base Rate Loans hereunder. UK Borrowers shall take action to avoid and mitigate the amount of any damages claimed against UK Issuing Lender or any other UK Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the UK Letters of Credit. Any claim by UK Borrowers under or in connection with any UK Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by UK Borrowers as a result of the breach or alleged wrongful conduct complained of, and (y) the amount (if any) of the loss that would have been avoided had UK Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing UK Issuing Lender to effect a cure.

(h) UK Borrowers are responsible for the final text of the UK Letter of Credit as issued by UK Issuing Lender, irrespective of any assistance UK Issuing Lender may provide such as drafting or recommending text or by UK Issuing Lender’s use or refusal to use text submitted by UK Borrowers. UK Borrowers understand that the final form of any UK Letter of Credit may be subject to such revisions and changes as are deemed necessary or appropriate by UK Issuing Lender, and UK Borrowers hereby consent to such revisions and changes not materially different from the application executed in connection therewith. UK Borrowers are solely responsible for the suitability of the UK Letter of Credit for UK Borrowers’ purposes. If UK Borrowers request UK Issuing Lender to issue a UK Letter of Credit for an Account Party, (i) such Account Party shall have no rights against UK Issuing Lender; (ii) UK Borrowers shall be responsible for the application and obligations under this Agreement; and (iii) communications (including notices) related to the respective UK Letter of Credit shall be among UK Issuing Lender and UK Borrowers. UK Borrowers will examine the copy of the UK Letter of Credit and any other documents sent by UK Issuing Lender in connection therewith and shall promptly notify UK Issuing Lender (not later than three (3) Business Days following UK Borrowers’ receipt of documents from UK Issuing Lender) of any non-compliance with UK Borrowers’ instructions and of any discrepancy in any document under any presentment or other irregularity. UK Borrowers understand and agree that UK Issuing Lender is not required to extend the expiration date of any UK Letter of Credit for any reason. With respect to any UK Letter of Credit containing an “automatic amendment” to extend the expiration date of such UK Letter of Credit UK Issuing Lender, in its sole and absolute discretion, may give notice of nonrenewal of such UK Letter of Credit and, if UK Borrowers do not at any time want the then current expiration date of such UK Letter of Credit to be extended, UK Borrowers will so notify Agent and UK Issuing Lender at least 30 calendar days before UK Issuing Lender is required to notify the beneficiary of such UK Letter of Credit or any advising bank of such non-extension pursuant to the terms of such UK Letter of Credit.

 

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(i) UK Borrowers’ reimbursement and payment obligations under this Section 2.11C are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any UK Letter of Credit, any Issuer Document, this Agreement or any Loan Document or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable UK Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such UK Letter of Credit;

(iii) UK Issuing Lender or any of its branches or Affiliates being the beneficiary of any UK Letter of Credit;

(iv) UK Issuing Lender or any correspondent honoring a drawing against a Drawing Document up to the amount available under any UK Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the UK Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that any Parent or any of their Subsidiaries may have at any time against any beneficiary or transferee beneficiary, any assignee of proceeds, UK Issuing Lender or any other Person;

(vi) UK Issuing Lender or any correspondent honoring a drawing upon receipt of an electronic presentation under a UK Letter of Credit requiring the same, regardless of whether the original Drawing Documents arrive at UK Issuing Lender’s counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.11C(i), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, Parents’ or any of their Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any UK Letter of Credit, whether against UK Issuing Lender, the beneficiary or any other Person; or

(viii) the fact that any Default or Event of Default shall have occurred and be continuing;

 

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provided, that subject to Section 2.11C(g) above, the foregoing shall not release UK Issuing Lender from such liability to UK Borrowers as may be determined in a final, non-appealable judgment of a court of competent jurisdiction against UK Issuing Lender following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of UK Borrowers to UK Issuing Lender arising under, or in connection with, this Section 2.11C or any UK Letter of Credit.

(j) Without limiting any other provision of this Agreement, UK Issuing Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to UK Borrowers for, and UK Issuing Lender’s rights and remedies against UK Borrowers and the obligation of UK Borrowers to reimburse UK Issuing Lender for each drawing under each UK Letter of Credit shall not be impaired by:

(i) honor of a presentation under any UK Letter of Credit that on its face substantially complies with the terms and conditions of such UK Letter of Credit, even if the UK Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for payment under a UK Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the UK Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than UK Issuing Lender’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the UK Letter of Credit);

(v) acting upon any instruction or request relative to a UK Letter of Credit or requested UK Letter of Credit that UK Issuing Lender in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to any UK Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the UK Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

 

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(ix) payment to any presenting bank (designated or permitted by the terms of the applicable UK Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where UK Issuing Lender has issued, confirmed, advised or negotiated such UK Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any UK Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by UK Issuing Lender if subsequently UK Issuing Lender or any court or other finder of fact determines such presentation should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by UK Issuing Lender to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

(k) UK Borrowers shall pay promptly upon demand to Agent for the account of UK Issuing Lender as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the UK Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11C(k)): (i) a fronting fee which shall be imposed by UK Issuing Lender of 0.125% per annum times the average amount of the UK Letter of Credit Usage during the immediately preceding quarter (or if an Event of Default has occurred, month) (or portion thereof), plus (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, UK Issuing Lender, or by any adviser, confirming institution or entity or other nominated person, relating to UK Letters of Credit, at the time of issuance of any UK Letter of Credit and upon the occurrence of any other activity with respect to any UK Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations). Notwithstanding the foregoing, if UK Issuing Lender is a Person other than Wells Fargo, all fronting fees payable in respect of UK Letters of Credit issued by such UK Issuing Lender shall be paid by UK Borrowers promptly upon written demand directly to such UK Issuing Lender for its own account.

(l) If by reason of (x) any Change in Law, or (y) compliance by UK Issuing Lender or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any UK Letter of Credit issued or caused to be issued hereunder or hereby, or any UK Loans or obligations to make UK Loans hereunder or hereby, or

 

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(ii) there shall be imposed on UK Issuing Lender or any other member of the Lender Group any other condition regarding any UK Letter of Credit, UK Loans or obligations to make UK Loans hereunder,

and the result of the foregoing is to increase, directly or indirectly, the cost to UK Issuing Lender or any other member of the Lender Group of issuing, making, participating in, or maintaining any UK Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify UK Borrowers in writing, and UK Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate UK Issuing Lender or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to UK Revolving Loans that are Base Rate Loans hereunder; provided, that (A) UK Borrowers shall not be required to provide any compensation pursuant to this Section 2.11C(l) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to UK Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this Section 2.11C(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

(m) Each standby UK Letter of Credit shall expire not later than the date that is 12 months after the date of the issuance of such UK Letter of Credit; provided, that any standby UK Letter of Credit may provide for the automatic extension thereof for any number of additional periods each of up to one year in duration; provided further, that with respect to any UK Letter of Credit which extends beyond the Maturity Date, Letter of Credit Collateralization shall be provided therefor on or before the date that is five Business Days prior to the Maturity Date. Each commercial UK Letter of Credit shall expire on the earlier of (i) 120 days after the date of the issuance of such commercial UK Letter of Credit and (ii) five Business Days prior to the Maturity Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) UK Availability shall at any time be less than zero, then on the Business Day following the date when the Administrative Borrower receives notice from Agent or the Required Lenders (or, if the maturity of the Obligations has been accelerated, Revolving Lenders with UK Letter of Credit Exposure representing greater than 50% of the total UK Letter Credit Exposure) demanding Letter of Credit Collateralization pursuant to this Section 2.11C(n) upon such demand, UK Borrowers shall provide Letter of Credit Collateralization with respect to the then existing UK Letter of Credit Usage. If UK Borrowers fail to provide Letter of Credit Collateralization as required by this Section 2.11C(n), the Revolving Lenders may (and, upon direction of Agent, shall) advance, as UK Revolving Loans the amount of the cash collateral required pursuant to the Letter of Credit Collateralization provision so that the then existing UK Letter of Credit Usage is cash collateralized in accordance with the Letter of Credit Collateralization provision (whether or not the Revolver Commitments have terminated, an Overadvance exists or the conditions in Section 3 are satisfied).

 

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(o) Unless otherwise expressly agreed by UK Issuing Lender and UK Borrowers when a UK Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby UK Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial UK Letter of Credit.

(p) UK Issuing Lender shall be deemed to have acted with due diligence and reasonable care if UK Issuing Lender’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this Section 2.11C and any provision contained in any Issuer 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, the terms and provisions of this Section 2.11C shall control and govern.

(r) The provisions of this Section 2.11C shall survive the termination of this Agreement and the repayment in full of the Obligations with respect to any UK Letters of Credit that remain outstanding.

(s) At UK Borrowers’ costs and expense, UK Borrowers shall execute and deliver to UK Issuing Lender such additional certificates, instruments and/or documents and take such additional action as may be reasonably requested by UK Issuing Lender to enable UK Issuing Lender to issue any UK Letter of Credit pursuant to this Agreement and related Issuer Document, to protect, exercise and/or enforce UK Issuing Lenders’ rights and interests under this Agreement or to give effect to the terms and provisions of this Agreement or any Issuer Document. Each UK Borrower irrevocably appoints UK Issuing Lender as its attorney-in-fact and authorizes UK Issuing Lender, without notice to UK Borrowers, to execute and deliver ancillary documents and letters customary in the letter of credit business that may include but are not limited to advisements, indemnities, checks, bills of exchange and issuance documents. The power of attorney granted by the UK Borrowers is limited solely to such actions related to the issuance, confirmation or amendment of any UK Letter of Credit and to ancillary documents or letters customary in the letter of credit business. This appointment is coupled with an interest.

2.12. Non-Base Rate Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below (the “Non-Base Option”) to have interest on all or a portion of the Revolving Loans be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a Non-Base Rate Loan, or upon continuation of a Non-Base Rate Loan as a Non-Base Rate Loan) at a rate of interest based upon the Non-Base Rate. Interest on Non-Base Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto; provided, that subject to the following clauses (ii) and (iii), in the case of any Interest Period greater than three months in duration, interest shall be payable at three month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period), (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to

 

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the terms hereof. On the last day of each applicable Interest Period, unless Borrowers have properly exercised the Non-Base Option with respect thereto, the interest rate applicable to such Non-Base Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has occurred and is continuing, at the written election of Agent or the Required Lenders, Borrowers no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the Non-Base Rate.

(b) Non-Base Rate Election.

(i) Borrowers may, at any time and from time to time, so long as Borrowers have not received a notice from Agent (which notice Agent may elect to give or not give in its discretion unless Agent is directed to give such notice by the Required Lenders, in which case, it shall give the notice to Borrowers), during the continuance of an Event of Default, to terminate the right of Borrowers to exercise the Non-Base Option during the continuance of such Event of Default, elect to exercise the Non-Base Option by notifying Agent prior to 2:00 p.m. (or 2:00 p.m. London time in the case of UK Revolving Loans) at least three Business Days prior to the commencement of the proposed Interest Period (the “Non-Base Rate Deadline”). The election of the Non-Base Option by US Borrowers, UK Borrowers or Canadian Borrowers, as applicable, for a permitted portion of the applicable Revolving Loans and an Interest Period pursuant to this Section shall be made by delivery to Agent of a Non-Base Notice received by Agent before the Non-Base Rate Deadline. Promptly upon its receipt of each such Non-Base Notice, Agent shall provide a copy thereof to each of the affected Lenders.

(ii) Each Non-Base Notice shall be irrevocable and binding on Borrowers. In connection with each Non-Base Rate Loan, US Borrowers, if such Non-Base Rate Loan is a US Revolving Loan, UK Borrowers, if such Non-Base Rate Loan is a UK Revolving Loan, or Canadian Borrowers, if such Non-Base Rate Loan is a Canadian Revolving Loan, shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment or required assignment of any principal of any Non-Base Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any Non-Base Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any Non-Base Rate Loan on the date specified in any Non-Base Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A certificate of Agent or a Lender delivered within 180 days of the occurrence of any event giving rise to such claims of compensation under this Section 2.12 to Borrowers setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error. US Borrowers, if such Non-Base Rate Loan is a US Revolving Loan, UK Borrowers, if such Non-Base Rate Loan is a UK Revolving Loan, or Canadian Borrowers, if such Non-Base Rate Loan is a Canadian Revolving Loan, shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate. If a payment of a Non-Base Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Borrowers, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable Non-Base Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any Non-Base Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be obligated to pay any resulting Funding Losses.

 

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(iii) Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall have not more than eight Non-Base Rate Loans in effect at any given time. Borrowers may only exercise the Non-Base Option for proposed Non-Base Rate Loans of at least $3,000,000.

(c) Conversion; Prepayment. Borrowers may convert Non-Base Rate Loans to Base Rate Loans in the Applicable Currency or prepay Non-Base Rate Loans at any time; provided, that in the event that Non-Base Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any prepayment through the required application by Agent of any payments or proceeds of Collateral in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12(b)(ii).

(d) Special Provisions Applicable to Non-Base Rate.

(i) The Non-Base Rate may be adjusted by Agent by written notice to the Borrowers with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits, Sterling deposits, Canadian Dollar deposits or increased costs (other than Taxes which shall be governed by Section 16), in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including any Changes in Law after the date hereof and changes in the reserve requirements imposed by the Board of Governors, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the Non-Base Rate. In any such event, the affected Lender shall give Borrowers and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Borrowers may, by notice to such affected Lender (A) require such Lender to furnish to Borrowers a statement setting forth in reasonable detail the basis for adjusting such Non-Base Rate and the method for determining the amount of such adjustment, or (B) repay the Non-Base Rate Loans of such Lender with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

(ii) In the event that any change in market conditions or any Change in Law shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain Non-Base Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the Non-Base Rate, such Lender shall give written notice of such changed circumstances to Agent and Borrowers and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any Non-Base Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such Non-Base Rate Loans, and interest upon the Non-Base Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the Non-Base Option until such Lender determines that it would no longer be unlawful or impractical to do so.

 

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(e) No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits, Sterling deposits or Canadian Dollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the Non-Base Rate.

2.13. Capital Requirements.

(a) If, after the date hereof, any Issuing Lender or any Lender determines that (i) any Change in Law regarding capital, liquidity or reserve requirements for banks or bank holding companies, or (ii) compliance by such Issuing Lender or such Lender, or their respective parent bank holding companies, with any guideline, request or directive of any Governmental Authority regarding capital adequacy or liquidity requirements (whether or not having the force of law), has the effect of reducing the return on such Issuing Lender’s, such Lender’s, or such holding companies’ capital or liquidity as a consequence of such Issuing Lender’s or such Lender’s commitments, Loans, participations or other obligations hereunder to a level below that which such Issuing Lender, such Lender, or such holding companies could have achieved but for such Change in Law or compliance (taking into consideration such Issuing Lender’s, such Lender’s, or such holding companies’ then existing policies with respect to capital adequacy or liquidity requirements and assuming the full utilization of such entity’s capital) by any amount deemed by such Issuing Lender or such Lender to be material, then such Issuing Lender or such Lender may notify Borrowers and Agent thereof. Following receipt of such notice, Borrowers agree to pay such Issuing Lender or 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 Issuing Lender or such Lender of a statement in the amount and setting forth in reasonable detail such Issuing Lender’s or 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 Issuing Lender or such Lender may use any reasonable averaging and attribution methods. Failure or delay on the part of any Issuing Lender or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Issuing Lender’s or such Lender’s right to demand such compensation; provided, that Borrowers shall not be required to compensate an Issuing Lender or a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Issuing Lender or such Lender notifies Borrowers of such Change in Law giving rise to such reductions and of such Issuing Lender’s or Lender’s intention to claim compensation therefor; provided further, that if such claim arises by reason of the Change in Law that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

(b) If any Issuing Lender or any Lender requests additional or increased costs referred to in Section 2.11A(l), Section 2.11B(l) or Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section 2.12(d)(ii) relative to changed circumstances (such Issuing Lender or Lender, an “Affected Lender”), then, at the request of Administrative Borrower, 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

 

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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 2.11A(xii), Section 2.11B(xii), Section 2.12(d)(i) or Section 2.13(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining Non-Base Rate Loans, 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 2.11A(xii), Section 2.11B(xii), Section 2.12(d)(i) or Section 2.13(a), as applicable, or to enable Borrowers to obtain Non-Base Rate Loans, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.11A(xii), Section 2.11B(xii), Section 2.12(d)(i) 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 2.11(xii), Section 2.11B(xii), Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain Non-Base Rate Loans, may designate a different Issuing Lender or substitute a Lender or prospective Lender, in each case, reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender (and its Affiliates) and such Affected Lender’s (and its Affiliates’) commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender (and its Affiliates) shall assign to the Replacement Lender its Obligations and commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall be deemed to be an “Issuing Lender” or a “Lender” (as the case may be) for purposes of this Agreement and such Affected Lender shall cease to be an “Issuing Lender” or a “Lender” (as the case may be) for purposes of this Agreement.

(c) Notwithstanding anything herein to the contrary, the protection of Sections 2.11A(xii), 2.11B(xii), 2.12(d), and 2.13 shall be available to each Issuing Lender and each Lender (as applicable) regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, decree, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for issuing lenders or lenders affected thereby to comply therewith. Notwithstanding any other provision herein, no Issuing Lender nor any Lender shall demand compensation pursuant to this Section 2.13 if it shall not at the time be the general policy or practice of such Issuing Lender or such Lender (as the case may be) to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

2.14. Incremental Facilities.

(a) At any time from and after the Closing Date, at the option of US Borrowers (but subject to the conditions set forth in clause (b) below), the US Revolver Commitments and the Maximum Revolver Amount (but not the Canadian Maximum Revolver Amount or the UK Maximum Revolver Amount) may be increased by an amount in the aggregate for all such increases of the US Revolver Commitments and the Maximum Revolver Amount not to exceed the Available Increase Amount (each such increase, an “Increase”);

 

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provided, that in no event shall the US Revolver Commitments and the Maximum Revolver Amount be increased by an amount in excess of the Available Increase Amount. Agent shall invite each Lender to increase its US Revolver Commitments (it being understood that no Lender shall be obligated to increase its US Revolver Commitments) in connection with a proposed Increase at the interest margin proposed by US Borrowers, and if sufficient Lenders do not agree to increase their US Revolver Commitments in connection with such proposed Increase, then Agent or Borrowers may invite any prospective lender who is reasonably satisfactory to Agent and Borrowers to become a Lender in connection with a proposed Increase but only if such prospective Lender (and its Foreign Lender Affiliates) agree to purchase a proportionate interest in the Canadian Revolver Commitment and the UK Revolver Commitment). Any Increase shall be in an amount of at least $5,000,000 and integral multiples of $1,000,000 in excess thereof. In no event may the Revolver Commitments and the Maximum Revolver Amount be increased pursuant to this Section 2.14 on more than 2 occasions in the aggregate for all such Increases. Additionally, for the avoidance of doubt, it is understood and agreed that in no event shall the aggregate amount of the Increases to the Revolver Commitments exceed $250,000,000.

(b) Each of the following shall be conditions precedent to any Increase of the US Revolver Commitments and the Maximum Revolver Amount in connection therewith:

(i) Agent or Borrowers have obtained the commitment of one or more Lenders (or other prospective lenders) reasonably satisfactory to Agent and Borrowers to provide the applicable Increase and purchase a proportionate interest in the Canadian Revolver Commitment and the UK Revolver Commitment and any such increasing Lenders (or prospective lenders), Borrowers, and Agent have signed a joinder agreement to this Agreement (an “Increase Joinder”), in form and substance reasonably satisfactory to Agent, to which such increasing Lenders (or prospective lenders), Borrowers, and Agent are party,

(ii) each of the conditions precedent set forth in Section 3.2 are satisfied,

(iii) in connection with any Increase, if any Loan Party or any of its Subsidiaries owns or will acquire any Margin Stock, Borrowers shall deliver to Agent an updated Form U-1 (with sufficient additional originals thereof for each Lender), duly executed and delivered by the Borrowers, together with such other documentation as Agent shall reasonably request, in order to enable Agent and the Lenders to comply with any of the requirements under Regulations T, U or X of the Federal Reserve Board,

(iv) Borrowers have delivered to Agent updated pro forma Projections (after giving effect to the applicable Increase) for the Loan Parties and their Subsidiaries evidencing compliance on a pro forma basis with Section 7 for the four quarters (on a quarter-by-quarter basis) immediately following the proposed date of the applicable Increase (calculated as if a Covenant Testing Period was in effect during the entire four quarter period), and

(v) Borrowers shall have reached agreement with the Lenders (or prospective lenders) agreeing to the increased US Revolver Commitments with respect to the interest margins applicable to US Revolving Loans to be made pursuant to the increased US Revolver Commitments (which interest margins may be higher than or equal to the interest

 

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margins applicable to US Revolving Loans set forth in this Agreement immediately prior to the date of the increased US Revolver Commitments (the date of the effectiveness of the increased US Revolver Commitments and the Maximum Revolver Amount, the “Increase Date”)) and shall have communicated the amount of such interest margins to Agent. Any Increase Joinder may, with the consent of Agent, Borrowers and the Lenders or prospective lenders agreeing to the proposed Increase, effect such amendments to this Agreement and the other Loan Documents as may be necessary to effectuate the provisions of this Section 2.14 (including any amendment necessary to effectuate the interest margins for the US Revolving Loans to be made pursuant to the increased US Revolver Commitments). Anything to the contrary contained herein notwithstanding, if the all-in yield (including interest margins, interest floors, and any original issue discount or similar yield-related discounts or payments, but excluding any arrangement, underwriting, or similar fees payable in connection therewith that are not paid to all Lenders providing the Increase to the Revolver Commitment) that is to be applicable to the Revolving Loans to be made pursuant to the increased Revolver Commitments is higher than the all-in yield (including interest margins, interest floors, and any original issue discount or similar yield-related discounts or payments, but excluding any arrangement, underwriting, or similar fees payable in connection therewith that are not paid to all Lenders providing the Increase to the Revolver Commitment) applicable to the Revolving Loans hereunder immediately prior to the applicable Increase Date (the amount by which all-in yield is higher, the “Excess”), then the interest margin applicable to the US Revolving Loans, UK Revolving Loans and Canadian Revolving Loans immediately prior to the Increase Date shall be increased by the amount of the Excess, effective on the applicable Increase Date, and without the necessity of any action by any party hereto.

(c) [Reserved]

(d) Unless otherwise specifically provided herein, all references in this Agreement and any other Loan Document to US Revolving Loans shall be deemed, unless the context otherwise requires, to include US Revolving Loans made pursuant to the increased US Revolver Commitments and Maximum Revolver Amount pursuant to this Section 2.14.

(e) Each of the Lenders having a US Revolver Commitment prior to the Increase Date (the “Pre-Increase Revolver Lenders”) shall assign to any Lender (or its Foreign Lender Affiliate) which is acquiring a new or additional US Revolver Commitment on the Increase Date (the “Post-Increase Revolver Lenders”), and such Post-Increase Revolver Lenders shall purchase from each Pre-Increase Revolver Lender, at the principal amount thereof, such interests in the US Revolving Loans and participation interests in US Letters of Credit on such Increase Date as shall be necessary in order that, after giving effect to all such assignments and purchases, (i) such US Revolving Loans and participation interests in US Letters of Credit will be held by Pre-Increase Revolver Lenders and Post-Increase Revolver Lenders ratably in accordance with their Pro Rata Share after giving effect to such increased US Revolver Commitments, and (ii) the Pro Rata Share of each Lender with a US Revolver Commitment shall equal such Lender’s (or its Foreign Lender Affiliate’s) Pro Rata Share of the Canadian Revolving Commitment and such Lender’s (or its Foreign Lender Affiliate’s) Pro Rata Share of the UK Revolver Commitment. Each Lender shall execute such documents as Agent shall request to effectuate the foregoing.

 

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(f) The US Revolving Loans, US Revolver Commitments, and Maximum Revolver Amount established pursuant to this Section 2.14 shall constitute US Revolving Loans, US Revolver Commitments, and Maximum Revolver Amount under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from any guarantees and the security interests created by the Loan Documents. US Borrowers shall take any actions reasonably required by Agent to confirm that the Liens and security interests granted by the Loan Documents continue to be perfected under the Code or otherwise after giving effect to the establishment of any such new US Revolver Commitments and Maximum Revolver Amount.

2.15. Joint and Several Liability of US Borrowers, UK Borrowers and Canadian Borrowers.

(a) Each US Borrower is accepting joint and several liability 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 US Borrower and in consideration of the undertakings of the other US Borrowers to accept joint and several liability for the US Obligations. Each Canadian Borrower is accepting joint and several liability 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 Canadian Borrower and in consideration of the undertakings of the other Canadian Borrowers to accept joint and several liability for the Canadian Obligations. Each UK Borrower is accepting joint and several liability 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 UK Borrower and in consideration of the undertakings of the other UK Borrowers to accept joint and several liability for the UK Obligations.

(b) Each US 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 US Borrowers, with respect to the payment and performance of all of the US Obligations (including any US Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the US Obligations shall be the joint and several obligations of each US Borrower without preferences or distinction among them. Accordingly, each US Borrower hereby waives any and all suretyship defenses that would otherwise be available to such US Borrower under applicable law. Each Canadian 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 Canadian Borrowers, with respect to the payment and performance of all of the Canadian Obligations (including any Canadian Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the Canadian Obligations shall be the joint and several obligations of each Canadian Borrower without preferences or distinction among them. Accordingly, each Canadian Borrower hereby waives any and all suretyship defenses that would otherwise be available to such Canadian Borrower under applicable law. Each UK 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 UK Borrowers, with respect to the payment and performance of all of the UK Obligations (including any UK Obligations arising under this Section 2.15), it being the intention

 

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of the parties hereto that all the UK Obligations shall be the joint and several obligations of each UK Borrower without preferences or distinction among them. Accordingly, each UK Borrower hereby waives any and all suretyship defenses that would otherwise be available to such UK Borrower under applicable law.

(c) If and to the extent that any US Borrower shall fail to make any payment with respect to any of the US Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform any of the US Obligations in accordance with the terms thereof, then in each such event the other US Borrowers will make such payment with respect to, or perform, such US Obligations until such time as all of the US Obligations are paid in full, and without the need for demand, protest, or any other notice or formality. If and to the extent that any Canadian Borrower shall fail to make any payment with respect to any of the Canadian Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform any of the Canadian Obligations in accordance with the terms thereof, then in each such event the other Canadian Borrowers will make such payment with respect to, or perform, such Canadian Obligations until such time as all of the Canadian Obligations are paid in full, and without the need for demand, protest, or any other notice or formality. If and to the extent that any UK Borrower shall fail to make any payment with respect to any of the UK Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform any of the UK Obligations in accordance with the terms thereof, then in each such event the other UK Borrowers will make such payment with respect to, or perform, such UK Obligations until such time as all of the UK Obligations are paid in full, and without the need for demand, protest, or any other notice or formality.

(d) The US Obligations of each US Borrower under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse US Obligations of each US Borrower enforceable against each US 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 2.15(d)) or any other circumstances whatsoever. The Canadian Obligations of each Canadian Borrower under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse Canadian Obligations of each Canadian Borrower enforceable against each Canadian 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 2.15(d)) or any other circumstances whatsoever. The UK Obligations of each UK Borrower under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse UK Obligations of each UK Borrower enforceable against each UK 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 2.15(d)) or any other circumstances whatsoever.

(e) Without limiting the generality of the foregoing and except as otherwise expressly provided in this Agreement, each Borrower hereby waives presentments, demands for performance, protests and notices, including notices of acceptance of its joint and several liability, notice of any Revolving Loans, any portion of any Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Agreement, notices of the existence, creation, or incurring of new or additional Obligations or other financial accommodations or of any demand for any payment under this Agreement, notice of any action

 

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at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any right to proceed against any other Borrower or any other Person, to proceed against or exhaust any security held from any other Borrower or any other Person, to protect, secure, perfect, or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any other Borrower, any other Person, or any collateral, to pursue any other remedy in any member of the Lender Group’s or any Bank Product Provider’s power whatsoever, 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), any right to assert against any member of the Lender Group or any Bank Product Provider, any defense (legal or equitable), set-off, counterclaim, or claim which each Borrower may now or at any time hereafter have against any other Borrower or any other party liable to any member of the Lender Group or any Bank Product Provider, any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor, and any right or defense arising by reason of any claim or defense based upon an election of remedies by any member of the Lender Group or any Bank Product Provider including any defense based upon an impairment or elimination of such Borrower’s rights of subrogation, reimbursement, contribution, or indemnity of such Borrower against any other Borrower. Without limiting the generality of the foregoing, 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 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 2.15 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.15, 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 2.15 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Borrower under this Section 2.15 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or any Agent or Lender. Each of the Borrowers waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof. Any payment by any Borrower or other circumstance which operates to toll any statute of limitations as to any Borrower shall operate to toll the statute of limitations as to each of the Borrowers. Each of the Borrowers waives any defense based on or arising out of any defense of any Borrower or any other Person, other than payment of the US Obligations, UK Obligations or the Canadian Obligations, as applicable, to the extent of such payment, based on

 

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or arising out of the disability of any Borrower or any other Person, or the validity, legality, or unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower other than payment of the US Obligations, UK Obligations or Canadian Obligations, as applicable, to the extent of such payment. Agent may, at the election of the Required Lenders, foreclose upon any Collateral held by Agent by one or more judicial or nonjudicial sales or other dispositions, whether or not every aspect of any such sale is commercially reasonable or otherwise fails to comply with applicable law or may exercise any other right or remedy Agent, any other member of the Lender Group, or any Bank Product Provider may have against any Borrower or any other Person, or any security, in each case, without affecting or impairing in any way the liability of any of the Borrowers hereunder except to the extent the US Obligations, UK Obligations or Canadian Obligations, as applicable, have been paid.

(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 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 2.15 are made for the benefit of Agent, each member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all applicable Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product Provider, 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 applicable Borrower or to exhaust any remedies available to it or them against any applicable Borrower or to resort to any other source or means of obtaining payment of any of the US Obligations, UK Obligations or Canadian Obligations hereunder, as applicable, or to elect any other remedy. The provisions of this Section 2.15 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 upon the insolvency, administration, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not been made.

(h) Each US Borrower, UK Borrower and Canadian Borrower, as applicable, hereby agrees that it will not enforce any of its rights that arise from the existence, payment, performance or enforcement of the provisions of this Section 2.15, including rights of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of Agent, any other member of the Lender Group, or any Bank Product Provider against any other US Borrower, UK Borrower or Canadian Borrower, as applicable, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from any US Borrower, UK Borrower or Canadian Borrower, as applicable, directly or indirectly, in cash or other property or by set-off or

 

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in any other manner, payment or security solely on account of such claim, remedy or right, unless and until such time as all of the US Obligations, UK Obligations or Canadian Obligations, as applicable, have been paid in full in cash. Any claim which any US Borrower, UK Borrower or Canadian Borrower, as applicable, may have against any other US Borrower, UK Borrower or Canadian Borrower, as applicable, with respect to any payments to any Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the US Obligations, UK Obligations or Canadian Obligations arising hereunder or thereunder, to the prior payment in full in cash of the US Obligations, UK Obligations or Canadian Obligations, as applicable, and, in the event of any insolvency, bankruptcy, receivership, administration, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any US Borrower, UK Borrower or Canadian Borrower, as applicable, its debts or its assets, whether voluntary or involuntary, all such US Obligations, UK Obligations or Canadian Obligations, as applicable, 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. If any amount shall be paid to any Borrower in violation of the immediately preceding sentence, such amount shall be held in trust for the benefit of Agent, for the benefit of the Lender Group and the Bank Product Providers, and shall forthwith be paid to Agent to be credited and applied to the applicable Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any applicable Obligations or other amounts payable under this Agreement thereafter arising. Notwithstanding anything to the contrary contained in this Agreement, no US Borrower may exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar rights against, and may not proceed or seek recourse against or with respect to any property or asset of, any other US Borrower (the “Foreclosed US Borrower”), including after payment in full of the US Obligations, if all or any portion of the US Obligations have been satisfied in connection with an exercise of remedies in respect of the Equity Interests of such Foreclosed US Borrower whether pursuant to this Agreement or otherwise. Notwithstanding anything to the contrary contained in this Agreement, no Canadian Borrower may exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar rights against, and may not proceed or seek recourse against or with respect to any property or asset of, any other Canadian Borrower (the “Foreclosed Canadian Borrower”), including after payment in full of the Canadian Obligations, if all or any portion of the Canadian Obligations have been satisfied in connection with an exercise of remedies in respect of the Equity Interests of such Foreclosed Canadian Borrower whether pursuant to this Agreement or otherwise. Notwithstanding anything to the contrary contained in this Agreement, no UK Borrower may exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar rights against, and may not proceed or seek recourse against or with respect to any property or asset of, any other UK Borrower (the “Foreclosed UK Borrower”), including after payment in full of the UK Obligations, if all or any portion of the UK Obligations have been satisfied in connection with an exercise of remedies in respect of the Equity Interests of such Foreclosed UK Borrower whether pursuant to this Agreement or otherwise. Notwithstanding anything in this Agreement to the contrary, the foregoing provisions of this Section 2.15 shall not be applied, or interpreted in a manner that, results in an income inclusion to the Borrowers under Section 956 of the IRC.

 

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2.16. Currencies. The US Revolving Loans and other US Obligations (unless such other US Obligations expressly provide otherwise) shall be made and repaid in Dollars. The Canadian Revolving Loans and other Canadian Obligations (unless such other Canadian Obligations expressly provide otherwise) shall be made in Dollars or Canadian Dollars, as selected by Administrative Borrower as provided herein. All such Canadian Obligations denominated in Dollars shall be repaid in Dollars and all such Canadian Obligations denominated in Canadian Dollars shall be repaid in Canadian Dollars. The UK Revolving Loans and other UK Obligations (unless such other UK Obligations expressly provide otherwise) shall be made in Dollars or Sterling, as selected by UK Borrowers as provided herein. All such UK Obligations denominated in Dollars shall be repaid in Dollars, all such UK Obligations denominated in Sterling shall be repaid in Sterling.

2.17. Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, solely to the extent that: (i) a court of competent jurisdiction finally determines that the calculation or determination of interest payable by Canadian Borrowers in respect of the Obligations pursuant to this Agreement and the other Loan Documents shall be governed by the Canadian laws of any province of Canada and the federal laws of Canada; or (ii) the Interest Act (Canada) otherwise applies:

(a) whenever interest payable by Canadian Borrowers is calculated on the basis of a period which is less than the actual number of days in a calendar year, each rate of interest determined pursuant to such calculation is, for the purposes of the Interest Act (Canada), equivalent to such rate multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and divided by the number of days used as the basis of such calculation;

(b) in no event shall the aggregate “interest” (as defined in Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as the same shall be amended, replaced or re-enacted from time to time (the “Criminal Code Section”)) payable (whether by way of payment, collection or demand) by Canadian Borrowers to Agent or any Lender under this Agreement or any other Loan Document exceed the effective annual rate of interest on the “credit advanced” (as defined in that section) under this Agreement or such other Loan Document lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement or any other Loan Document in respect of “interest” (as defined in that section) is determined to be contrary to the provisions of that section and the amount of such payment or collection shall be refunded by Agent and Lenders to Canadian Borrowers with such “interest” 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 Agent or such Lender of interest at a rate not in contravention of the Criminal Code Section, such adjustment to be effected, to the extent necessary, as follows: firstly, by reducing the amounts or rates of interest required to be paid to Agent or that Lender; and then, by reducing any fees, charges, expenses and other amounts required to be paid to the affected Agent or Lender which would constitute “interest”. Notwithstanding the foregoing, and after giving effect to all such adjustments, if Agent or any Lender shall have received an amount in excess of the maximum permitted by the Criminal Code Section, then Canadian Borrowers shall be entitled, by notice in writing to the Agent or affected Lender, to obtain reimbursement from Agent or that Lender in an amount equal to such excess. For the purposes of this Agreement and each other Loan Document to which any Canadian Borrower is a party, the effective annual rate of interest payable by

 

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Canadian Borrowers shall be determined in accordance with generally accepted actuarial practices and principles over the term of the loans on the basis of annual compounding for the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Institute of Actuaries appointed by Agent for the account of Canadian Borrowers will be conclusive for the purpose of such determination in the absence of evidence to the contrary;

(c) all calculations of interest payable by Canadian Borrowers under this Agreement or any other Loan Document are to be made on the basis of the nominal interest rate described herein and therein and not on the basis of effective yearly rates or on any other basis which gives effect to the principle of deemed reinvestment of interest. The parties acknowledge that there is a material difference between the stated nominal interest rates and the effective yearly rates of interest and that they are capable of making the calculations required to determine such effective yearly rates of interest; and

(d) if there is a conflict, inconsistency, ambiguity or difference between any provision of this Section 2.17 and any other Section of this Agreement or any other Loan Document with respect to Canadian Borrowers then the provisions of this Section 2.17 shall prevail and be paramount.

3. CONDITIONS; TERM OF AGREEMENT.

3.1. Conditions Precedent to the Initial Extension of Credit. The obligation of each Lender to make the initial extensions of credit provided for hereunder is subject to the fulfillment, to the satisfaction or waiver of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1 to this Agreement (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent). In addition to the foregoing, the obligation of each Lender to make the initial extensions of credit to the UK Borrowers provided for hereunder is further subject to the fulfillment, to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1A (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction or waiver of such conditions precedent).

3.2. Conditions Precedent to all Extensions of Credit. The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

(a) the representations and warranties of each Loan Party or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct 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) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct 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 such earlier date); and

 

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(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

3.3. Maturity. The Commitments shall continue in full force and effect for a term ending on the Maturity Date (unless terminated earlier in accordance with the terms hereof).

3.4. Effect of Maturity. On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations (other than Hedge Obligations) immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations (other than Hedge Obligations) in full. No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) 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 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.

3.5. Early Termination by Borrowers. Borrowers have the option, at any time upon five Business Days prior written notice to Agent, to repay all of the Obligations in full and terminate the Commitments. The foregoing notwithstanding, (a) Borrowers may rescind termination notices relative to proposed payments in part or in full of the Obligations with the proceeds of third party Indebtedness or Equity Interests if the closing for such issuance or incurrence does not happen on or before the date of the proposed termination (in which case, a new notice shall be required to be sent in connection with any subsequent termination), and (b) Borrowers may extend the date of termination at any time with the consent of Agent (which consent shall not be unreasonably withheld or delayed).

3.6. Conditions Subsequent. The obligation of the Lender Group (or any member thereof) to continue to make Revolving Loans (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of the conditions subsequent set forth on Schedule 3.6 to this Agreement (the failure by Borrowers to so perform or cause to be performed such conditions subsequent as and when required by the terms thereof (unless such date is extended, in writing, by Agent, which Agent may do without obtaining the consent of the other members of the Lender Group), shall constitute an Event of Default).

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, the Parent and each Borrower 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 shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any

 

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representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct 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 such earlier date), 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 and each of its Subsidiaries (i) is duly incorporated or organized and existing and is, to the extent applicable, in good standing under the laws of the jurisdiction of its organization or incorporation, (ii) is qualified or registered to do business in any jurisdiction except where the failure to be in good standing or so qualified or registered could reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

(b) Set forth on Schedule 4.1(b) to this Agreement, as of December 31, 2017, is a complete and accurate description of the authorized Equity Interests of Parent, by class, and a description of the number of shares of each such class that are issued and outstanding.

(c) Set forth on Schedule 4.1(c) to this Agreement (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Parent’s direct and indirect Subsidiaries that are Loan Parties, showing: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Parent. All of the outstanding Equity Interests of each such Subsidiary has been validly issued and is fully paid and non-assessable.

(d) Except as set forth on Schedule 4.1(d) to this Agreement, there are no subscriptions, options, warrants, or calls relating to any shares of any Loan Party’s or any of its Subsidiaries’ Equity Interests, including any right of conversion or exchange under any outstanding security or other instrument. Except as set forth on Schedule 4.1(d) to this Agreement, no Loan Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.

4.2. Due Authorization; No Conflict.

(a) As to each Loan Party, 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.

 

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(b) 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 federal, state, provincial, foreign or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of 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 the violation of which could reasonably be expected to have a Material Adverse Effect, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Agreement of any Loan Party or its Subsidiaries where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) 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 (iv) require any approval of any holder of Equity Interests of a Loan Party or any approval or consent of any Person under any Material Agreement of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

4.3. Governmental Consents. 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 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) 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 general equitable or discretionary principles whether considered in a proceeding at law or in equity or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(b) Agent’s Liens on the Collateral are validly created, perfected (other than (i) in respect of motor vehicles that are subject to a certificate of title, (ii) money, (iii) letter-of-credit rights (other than supporting obligations), (iv) commercial tort claims of the US Loan Parties (other than those that, by the terms of the US Security Agreement, are required to be perfected), and (v) any Deposit Accounts and Securities Accounts of the US Loan Parties not subject to a Control Agreement as permitted by Section 7(k) of the US Security Agreement, and subject only to the filing of financing statements and continuation statements therefor, the recordation of any Copyright Security Agreements, and the recordation of the Mortgages, in each case, in the appropriate filing offices), and first priority Liens, subject only to Permitted Liens.

 

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4.5. Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries has (a) good title to (in the case of fee interests in Real Property), (b) good, valid and marketable title (in the case of interests in Scottish Real Estate) (c) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (d) good title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby and except for such defects in title or interests as could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

4.6. Litigation. There are no actions, suits, or proceedings pending or, to the knowledge of any Borrower, 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 Effect.

4.7. Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

4.8. No Material Adverse Effect. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, 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, 2017, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect.

4.9. Solvency.

(a) The US Borrowers, taken as a whole, are Solvent, the Canadian Borrowers, taken as a whole, are Solvent, the UK Borrowers, taken as a whole, are Solvent, and the Loan Parties, taken as a whole, are Solvent.

(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

4.10. Employee Benefits.

(a) Except as set forth on Schedule 4.10(a), as of the Closing Date, no Loan Party maintains or contributes to any Pension Plan or Multiemployer Plan.

 

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(b) Each Loan Party and each of the ERISA Affiliates has complied with ERISA, the IRC and all applicable laws regarding each Employee Plan, except for such compliance failures that, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c) Each Employee Plan (other than a Multiemployer Plan) is, and has been, maintained in compliance with ERISA, the IRC, all applicable laws and the terms of each such Employee Plan, except for such compliance failures that, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(d) Each Employee Plan (other than a Multiemployer 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 is entitled to rely on an opinion or advisory letter provided under a volume submitted or prototype program. To the knowledge of each Loan Party and except as could be reasonably expected to result in a Material Adverse Effect, nothing has occurred which could reasonably be expected to prevent, or cause the loss of, such qualification.

(e) No 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, except for such liability that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect.

(f) No Notification Event exists, except for such events that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect.

(g) As of the Closing Date, no Canadian Loan Party maintains, sponsors or contributes to any Canadian Pension Plan nor has any liabilities or obligations in respect of a Canadian Pension Plan that has been terminated or wound up.

(h) No UK Loan Party: (i) is or has at any time been an employer (as defined for the purposes of sections 38 to 51 of the Pensions Act 2004 (UK)) of an occupational pension scheme that which is not a money purchase scheme (both terms as defined in the Pensions Scheme Act 1993 (UK))), or (ii) is or has at any time been “connected” with or an “associate” (as those terms are used in sections 38 and 43 of the Pensions Act 2004 (UK)) of such an employer.

(i) No UK Loan Party or has been issued with a Financial Support Direction or Contribution Notice in respect of any UK defined benefit pension plan.

4.11. Environmental Condition. Except as set forth on Schedule 4.11 to this Agreement, (a) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material respect, of any applicable Environmental Law except where failure of any of foregoing matters to be true and correct could not reasonably be expected to have a Material Adverse Effect, (b) to each Borrower’s knowledge, no Loan Party’s nor any of

 

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its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site requiring remedial action except where failure of any of foregoing matters to be true and correct could not reasonably be expected to have a Material Adverse Effect, (c) no Loan Party nor any of its Subsidiaries has received written notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries except where failure of any of foregoing matters to be true and correct could not reasonably be expected to have a Material Adverse Effect, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

4.12. 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 the industry of any Loan Party or its Subsidiaries) 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 the industry of any Loan Party or its Subsidiaries) 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 Agent on March 15, 2018 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ commercially reasonable estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrowers’ commercially reasonable estimate, projections or forecasts based on methods and assumptions which Borrowers believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

4.13. 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, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001, as amended) (the “Patriot Act”) and all applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation.

 

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4.14. Indebtedness. Set forth on Schedule 4.14 to this Agreement 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 Permitted 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 $10,000,000 and Permitted Purchase Money Indebtedness) 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.

4.15. Payment of Taxes. Except as otherwise permitted under Section 5.5, all US and Canadian federal, provincial, state (as applicable) and all other material Tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed (subject to extensions granted for filing same), and all Taxes shown on such Tax returns to be due and payable and all other Taxes 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. Each Loan Party and each of its Subsidiaries have made adequate provision taken as a whole in accordance with GAAP for all Taxes not yet due and payable. No Borrower 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.

4.16. Margin Stock. Neither any 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 Loans made by the Lender Group to Borrowers will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.

4.17. 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 or state 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.

4.18. OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. No Loan Party or any of its Subsidiaries is in violation of any Sanctions. No Loan Party nor any of its Subsidiaries nor, to the knowledge of such Loan Party, any director, officer, employee, agent or Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. Each of the Loan Parties and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan Parties and its Subsidiaries, and to the knowledge of each such Loan Party, each director, officer, employee, agent and Affiliate of each such Loan Party and each such Subsidiary, is in compliance (i) with all Sanctions, and (ii) in all material

 

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respects, with all Anti-Corruption Laws and Anti-Money Laundering Laws. No proceeds of any Loan made or Letter of Credit issued 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, or otherwise used in any manner that would result in a violation of any Sanction, Anti-Corruption Law or Anti-Money Laundering Law by any Person (including any Lender, Bank Product Provider, or other individual or entity participating in any transaction).

4.19. Employee and Labor Matters. There is (i) no unfair labor practice complaint pending or, to the knowledge of any Borrower, threatened against any Loan Party or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or its Subsidiaries which arises out of or under any collective bargaining agreement, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Loan Party or its Subsidiaries, or (iii) to the knowledge of any Borrower, after due inquiry, no union representation question existing with respect to the employees of any Loan Party or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of any Loan Party or its Subsidiaries, that, in each case, could reasonably be expected to result in a Material Adverse Effect. None of any Loan Party or its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state or provincial or other applicable law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of each Loan Party and 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 Effect. All material payments due from any Loan Party or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Parent except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

4.20. [Reserved].

4.21. Leases. Each Loan Party and its Subsidiaries enjoy undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries exists under any of them, except for defaults that could not reasonably be expected to have a Material Adverse Effect.

4.22. Eligible Accounts. As to each Account that is identified by Borrowers as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of a Loan Party’s business, (b) owed to a Loan Party without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

 

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4.23. Eligible Inventory. As to each item of Inventory that is identified by Borrowers as Eligible Finished Goods Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

4.24. [Reserved].

4.25. Location of Inventory. The Inventory of Borrowers and their Subsidiaries is not stored with a bailee, warehouseman, or similar party and is located only at, or in-transit between, the locations identified on Schedule 4.25 to this Agreement (as such Schedule may be updated pursuant to Section 5.14).

4.26. 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.

4.27. Hedge Agreements. On each date that any Hedge Agreement is executed by any Hedge Provider, Borrower and each other Loan Party satisfy all eligibility, suitability and other requirements under the Commodity Exchange Act (7 U.S.C. § 1, et seq., as in effect from time to time) and the Commodity Futures Trading Commission regulations.

4.28. Material Contracts. Set forth on Schedule 4.28 (as such Schedule may be updated from time to time in accordance herewith) is a reasonably detailed description of the Material Contracts of each Loan Party as of the most recent date on which Parent provided the Compliance Certificate pursuant to Section 5.1; provided, that Borrowers may amend Schedule 4.28 to add or delete Material Contracts so long as such amendment occurs by written notice to Agent on the date that Parent provides the Compliance Certificate. Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Loan Party and, to each Borrower’s knowledge, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 6.6(b)), and (c) is not in default due to the action or inaction of the applicable Loan Party.

4.29. Deduction of UK Tax. As at the Closing Date, no Loan Party who is a Loan Party on the Closing Date is required to make any deduction for or on account of Tax imposed by the United Kingdom from any payment it may make under any Loan Document to Agent or any Lender.

4.30. Centre of Main Interest. For the purposes of the Insolvency Regulation, the “centre of main interests” (as that term is used in Article 3(1) therein) of each UK Loan Party organized or incorporated in a jurisdiction to which the Insolvency Regulation applies is situated in its respective jurisdiction of organization or incorporation and it has no “establishment” (as that term is used in Article 2(h) therein) in any other jurisdiction.

 

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4.31. Ranking.

(a) Subject to Permitted Liens, each UK Security Document has or will have the ranking in priority which it is expressed to have in such UK Security Document and it is not subject to any prior ranking or pari passu ranking Liens.

(b) Each UK Loan Party’s payment obligations under the Loan Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

4.32. Immaterial Subsidiaries. Set forth on Schedule 4.32 (as such Schedule may be updated from time to time in accordance herewith) is a list of Immaterial Subsidiaries as of the most recent date on which Parent provided the Compliance Certificate pursuant to Section 5.1; provided, that Borrowers may amend Schedule 4.32 to add or delete Immaterial Subsidiaries so long as such amendment occurs by written notice to Agent on the date that Parent provides the Compliance Certificate. Each Immaterial Subsidiary, and the Immaterial Subsidiaries taken as a whole, comply with the requirements set forth in the definition of “Immaterial Subsidiary”.

5. AFFIRMATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the termination of all of the Commitments and payment in full of the Obligations:

5.1. Financial Statements, Reports, Certificates. Borrowers (a) will deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 to this Agreement no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a fiscal year different from that of Parent, (c) agree to maintain a system of accounting that enables Borrowers to produce financial statements in accordance with GAAP, and (d) agree that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their and their Subsidiaries’ sales, and (ii) maintain their billing systems and practices substantially as in effect as of the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, Agent (such consent not to be unreasonably withheld, delayed or conditioned).

5.2. Reporting. Borrowers (a) will deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on Schedule 5.2 to this Agreement at the times specified therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

5.3. Existence. Except as otherwise permitted under Section 6.3 or Section 6.4, each Loan Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person’s valid existence and good standing in its jurisdiction of organization and, except as could not reasonably be expected to result in a Material Adverse Effect, good standing with respect to all other jurisdictions in which it is qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.

 

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5.4. Maintenance of Properties. Each Loan Party will, and will cause each of its Subsidiaries to, 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, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted (and except where the failure to so maintain and preserve assets could not reasonably be expected to result in a Material Adverse Effect).

5.5. Taxes. Each Loan Party will, and will cause each of its Subsidiaries to, pay in full before delinquency or before the expiration of any extension period all material Taxes imposed, levied, or assessed against it, or any of its assets or in respect of any of its income, businesses, capital, or franchises, other than to the extent that the validity of such Tax is the subject of a Permitted Protest.

5.6. Insurance. Each Loan Party will, and will cause each of its Subsidiaries to, at Borrowers’ expense, maintain insurance respecting each of each Loan Party’s and its Subsidiaries’ assets wherever located, covering liabilities, losses or damages as are customarily are insured against by other Persons engaged in same or similar businesses and similarly situated and located, together with flood insurance coverage reasonably acceptable to Agent with respect to any Real Property Collateral located in a flood zone; provided that the Loan Parties may self-insure to the extent and in a manner customary for similarly situated companies of like size, type and financial condition that are part of a group of companies under common control. All such policies of insurance shall be with financially sound and reputable insurance companies acceptable to Agent (it being agreed that, as of the Closing Date, Factory Mutual Insurance Company is acceptable to Agent) 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 Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of Borrowers in effect as of the Closing Date are acceptable to Agent). All property insurance policies 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 lender’s loss payable endorsement with a standard non-contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of property and general liability insurance are to be delivered to Agent, with the lender’s loss payable and additional insured endorsements in favor of Agent and shall, if customarily provided by such insurance carrier, provide notice in accordance with the terms of the applicable insurance policies with respect to the cancellation of such policies. If any Loan Party or its Subsidiaries fails to maintain such insurance, Agent may arrange for such insurance, but at Borrowers’ 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. Any such insurance arranged for by Agent shall be cancelled upon the Loan Parties’ obtaining the insurance required to be obtained and maintained in accordance with this Section 5.6. Borrowers shall give Agent prompt notice of any loss exceeding $10,000,000 covered by the casualty or business interruption insurance of any Loan Party or its Subsidiaries. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability

 

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insurance policies in respect of the 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.

5.7. Inspection.

(a) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent, any Lender, and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, 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 senior management (provided, that an authorized representative of a Borrower shall be allowed to be present) at such reasonable times and intervals as Agent may designate and, so long as no Event of Default has occurred and is continuing, with reasonable prior notice to Borrowers and during regular business hours, at Borrowers’ expense in accordance with the provisions of the Fee Letter, subject to the limitations set forth below in Section 5.7(c).

(b) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct field examinations, appraisals or valuations at such reasonable times and intervals as Agent may designate, at Borrowers’ expense in accordance with the provisions of the Fee Letter, subject to the limitations set forth below in Section 5.7(c).

(c) So long as no Event of Default shall be continuing during a calendar year, Borrowers shall not be obligated to reimburse Agent for more than one field examination in such calendar year (increasing to two field examinations if an Increased Reporting Event has occurred during such calendar year), and one inventory appraisal in such calendar year (increasing to two inventory appraisals if an Increased Reporting Event has occurred during such calendar year), in each case, except for field examinations and appraisals conducted prior to the Closing Date or in connection with a proposed Permitted Acquisition (whether or not consummated).

Notwithstanding anything to the contrary in this Section 5.7, neither the Borrowers nor any Subsidiary of the Borrowers will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter (i) so long as no Event of Default shall be continuing (and thereafter, subject to the provisions of Section 17.9 hereof), that constitutes non-financial trade secrets, or non-financial proprietary information, not reasonably related to the actual or projected financial results of operation of the Borrowers nor any Subsidiary of the Borrowers, (ii) to the extent disclosure to the Agent (or their respective representatives or contractors) is prohibited by any requirement of law or court or regulatory order or any binding agreement not entered into for the purpose of avoiding disclosure to the Agent or (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product.

5.8. Compliance with Laws. Each Loan Party will, and will cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

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5.9. Environmental. Each Loan Party will, and will cause each of its Subsidiaries to,

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

(b) Comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests,

(c) Promptly notify Agent of 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 or its Subsidiaries and take any Remedial Actions required to be taken by a Loan Party under Environmental Law abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, and

(d) Promptly, but in any event within five Business Days of its receipt thereof, provide Agent with written notice of any of the following: (i) written notice that an Environmental Lien has been filed against any of the real or personal property of a Loan Party or its Subsidiaries, (ii) written notice that an Environmental Action has or will be filed against a Loan Party or its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority against a Loan Party or its Subsidiaries (other than Immaterial Subsidiaries).

5.10. Disclosure Updates. Each Loan Party will, promptly and in no event later than fifteen Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

5.11. Formation of Subsidiaries.

(a) Each Loan Party will, at the time that any Loan Party forms any direct or indirect Subsidiary (other than an Immaterial Subsidiary), or acquires any direct or indirect Subsidiary (other than an Immaterial Subsidiary) after the Closing Date, within thirty days of such event (or such later date as permitted by Agent in its sole discretion):

(i) cause such new Subsidiary (A) if such Subsidiary is a Domestic Subsidiary or a Foreign Subsidiary organized under the laws of Canada or any province thereof or under the laws of Scotland or England and Wales, and Administrative Borrower requests, subject to the consent of Agent, that such Domestic Subsidiary be joined as a US Borrower or

 

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Foreign Subsidiary be joined as a Canadian Borrower or UK Borrower hereunder, to provide to Agent a Joinder to this Agreement, and (B) to provide to Agent a joinder to the US Security Agreement (unless such Subsidiary is an Excluded Subsidiary), Canadian Security Documents and/or UK Security Documents, as applicable, and a guaranty of the Obligations (provided, that if such Subsidiary is an Excluded Subsidiary, such Subsidiary shall only be required to guaranty the Foreign Obligations), in each case, together with such other security agreements (including Mortgages with respect to any Real Property owned in fee of such new Subsidiary with a fair market value of greater than $12,500,000), as well as appropriate financing statements (and with respect to all property subject to a Mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary);

(ii) provide, or cause the applicable Loan Party to provide, to Agent a pledge agreement (or an addendum to the applicable Security Agreement or the applicable UK Security Document) and appropriate certificates, transfer forms and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary in form and substance reasonably satisfactory to Agent (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of organization of such Subsidiary); provided, that only 65% of the total outstanding voting Equity Interests of any first tier Excluded Subsidiary (and no Equity Interests of any other Excluded Subsidiary) shall be required to be pledged to secure the US Obligations (with no such restriction applying to security for the Foreign Obligations), and

(iii) provide to Agent all other documentation, including the Governing Documents of such Subsidiary and one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance, flood certification documentation or other documentation with respect to all Real Property owned in fee and subject to a mortgage). For the avoidance of doubt, any Subsidiary joined under this Section 5.11 shall only be required to use commercially reasonable efforts to obtain any Collateral Access Agreement required by this Agreement, and failure to obtain such Collateral Access Agreements shall not constitute a Default or Event of Default.

(b) Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall constitute a Loan Document.

(c) In the event (1) a Guarantor is no longer a Domestic Subsidiary other than an Immaterial Subsidiary or (2) a dissolution, sale or other disposition (including by way of merger or consolidation with a Person that is not a Loan Party) of all or substantially all of the assets or all of the Equity Interests of any Guarantor occurs and such sale or disposition is permitted by this Agreement (or permitted pursuant to a waiver, amendment, modification of or consent to a transaction otherwise prohibited by this Agreement), then, so long as no Event of Default has occurred and is continuing, the Agent shall, upon written request by the Borrowers, and at no cost to the Agent that is not reimbursed pursuant hereto, release such Guarantor from its liabilities and obligations under the Loan Documents pursuant to such documentation as the Borrowers may reasonably require.

 

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5.12. Further Assurances . Each Loan Party will, and will cause each of the other Loan Parties to, at any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the assets of each of the Loan Parties (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal) (other than Excluded Collateral or any other assets expressly excluded from the Collateral (as defined in the US Security Agreement) pursuant to Section 3 of the US Security Agreement), to create and perfect Liens in favor of Agent in any Real Property acquired by any other Loan Party with a fair market value in excess of $12,500,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided, that the foregoing shall not apply, with respect to the US Obligations only, to any Excluded Subsidiary or, with respect to any Obligations, any Immaterial Subsidiary. To the maximum extent permitted by applicable law, if any Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time not to exceed 10 Business Days following the request to do so, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s name and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance of, and not in limitation of, the foregoing, (i) each US Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the US Guarantors and are secured by substantially all of the assets of the US Loan Parties, including all of the outstanding capital Equity Interests of each US Borrower and its Subsidiaries (in each case, other than with respect to any Excluded Collateral or any other assets expressly excluded from the Collateral (as defined in the US Security Agreement) pursuant to Section 3 of the US Security Agreement), and (ii) each Canadian Loan Party and each UK Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Foreign Obligations are guaranteed by the Canadian Guarantors and the UK Guarantors and are secured by substantially all of the assets of the Canadian Loan Parties and the UK Loan Parties, including all of the outstanding capital Equity Interests of each Canadian Borrower, each UK Borrower and each of their Subsidiaries (in each case, other than with respect to any Excluded Collateral or other assets expressly excluded from the Collateral (as defined in the US Security Agreement) pursuant to Section 3 of the US Security Agreement or any applicable Canadian Security Document or UK Security Document).

5.13. [Reserved].

5.14. Location of Inventory; Chief Executive Office. Each Loan Party will keep (a) their Inventory (other than Inventory in transit or other Inventory at a location with a value of less than $200,000) only at the locations identified on Schedule 4.25 to this Agreement (provided that Borrowers may amend Schedule 4.25 to this Agreement so long as such new location is within the continental United States or Canada (or, in the case of any UK Loan Party, such new location is in the United Kingdom), and such amendment occurs by written notice to Agent (i) not less than ten days prior to the date on which such Inventory is moved to such new location in the case of any such new location within Canada, and (ii) not less than 30 days after the date on which such Inventory is moved to such new location in the case of any such new location

 

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within the United States or, in the case of any UK Loan Party, the United Kingdom, and (b) their respective chief executive offices (and, in the case of any Canadian Loan Party, its registered office) only at the locations identified on Schedule 7 to the applicable Security Agreement. Each Loan Party will use its commercially reasonable efforts to obtain Collateral Access Agreements for each of the locations identified on Schedule 7 to the applicable Security Agreement and Schedule 4.25 to this Agreement, but failure to do so shall not constitute a Default or Event of Default.

5.15. OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. Each Loan Party will, and will cause each of its Subsidiaries to, comply (i) with all applicable Sanctions, and (ii) in all material respects, with all Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan Parties and its Subsidiaries shall implement and maintain in effect policies and procedures designed to ensure compliance by the Loan Parties and their Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.

5.16. Bank Products. The Loan Parties shall maintain their primary United States depository and treasury management relationships with Wells Fargo or one or more of its Affiliates at all times during the term of the Agreement.

5.17. Canadian Compliance. Each Parent and each Borrower will, and will cause each of its Subsidiaries to, (a) comply with all applicable federal and provincial laws, including the Income Tax Act (Canada), with respect to any Canadian Pension Plans and the terms of any such Canadian Pension Plan except, in each case, where the failure to do so could not reasonably be expected to result in a Material Adverse Effect, (b) operate (within the limits set forth by applicable law) each Canadian Pension Plan in such a manner that will not incur any material liability under the Income Tax Act (Canada) or other applicable federal or provincial pension benefits legislation, except, in each case, where the failure to do so could not reasonably be expected to result in a Material Adverse Effect, and (c) furnish to Agent upon Agent’s reasonable written request such additional information about any Canadian Pension Plan for which Parents or their Subsidiaries could reasonably expect to incur any material liability. All employer or employee payments, contributions or premiums in an aggregate amount in excess of $250,000 required to be remitted or paid to in respect of Canadian statutory benefit plans that any Parent or any of their Subsidiaries is required to participate in or comply with, including the Canada Pension Plan or Quebec Pension Plan as maintained by the Government of Canada or Province of Quebec, respectively, and plans administered pursuant to applicable workplace safety insurance and employment insurance legislation will be paid or remitted by each such Person in accordance with the terms thereof, any agreements relating thereto and all applicable laws, except to the extent that any amount so payable is subject to a Permitted Protest and a Canadian Priority Payable Reserve for such amount, where applicable, has been established.

5.18. Employee Benefits.

(a) Each Parent and each Borrower will maintain and operate, and cause each of its Subsidiaries to maintain and operate, each Employee Plan in accordance with all applicable laws except where the failure to maintain or operate such an Employee Plan in accordance with applicable law could not reasonably be expected to have a Material Adverse Effect. Each Parent

 

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and each Borrower will notify Agent within ten Business Days of (i) the formation of, or undertaking the duty to make a contribution to, any Employee Plan (other than contributions to an Employee Plan made in the ordinary course of business or an Employee Plan in place as of the date of this Agreement), or (ii) the receipt of any written notice from any Governmental Authority that any Loan Party has liability for excise taxes, fines, penalties, or damages for breach of fiduciary duty with respect to any Employee Plan under ERISA or the IRC, except, in each case, where the liability could not reasonably be expected to result in a Material Adverse Effect.

(b) Each Loan Party shall (i) ensure that all pension schemes operated by or maintained for its benefit and/or any of the employees of any UK Loan Party are fully funded based on the statutory funding objective under sections 221 and 222 of the Pensions Act 2004 (UK) and that no action or omission is taken by any UK Loan Party in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including the termination or commencement of winding-up proceedings of any such pension scheme or a UK Loan Party ceasing to employ any member of such a pension scheme); (ii) deliver to the Agent (A) at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to any UK Loan Party) and (B) at any other time if the Agent reasonably believes that any relevant statutory or auditing requirements are not being complied with, actuarial reports in relation to all pension schemes mentioned in clause (i) above; and (iii) promptly notify the Agent of any material change in the rate of contributions to any pension scheme mentioned in clause (i) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).

5.19. Centre of Main Interests. Each UK Loan Party that is incorporated in a jurisdiction to which the Insolvency Regulation applies shall maintain its “centre of main interests” in its jurisdiction of incorporation for the purposes of the Insolvency Regulation.

5.20. People with Significant Control Regime. Each Loan Party shall (a) within the relevant timeframe, comply with any notice it receives pursuant to Part 21A of the Companies Act 2006 (UK) from any company incorporated in the UK whose shares are the subject of a Lien in favor of the Agent, and (b) promptly provide the Agent with a copy of that notice.

5.21. UK Loan Party Cash Management Provisions.

(a) The UK Loan Parties will ensure that all of the proceeds of their Accounts are deposited (whether directly or indirectly) into segregated Collection Accounts (which Collection Accounts shall be located in England or any other jurisdiction satisfactory to the Agent in its Permitted Discretion) only containing the proceeds of the Accounts of the UK Loan Parties, in a manner that is satisfactory to the Agent which Collection Accounts, for the avoidance of doubt, shall not be used for general payment purposes.

(b) The Agent shall be given sufficient access to each relevant Collection Account to ensure that the provisions of Section 2.4(b)(ii)(B) are capable of being complied with.

 

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(c) The UK Loan Parties will ensure that each of its Collection Accounts is subject to a Blocked Account Control Agreement or other equivalent arrangement with similar effect.

(d) Any such Blocked Account Control Agreement or equivalent arrangement entered into by UK Loan Party incorporated shall (i) provide the Agent with control over such account, with such control being sufficient to obtain a “fixed charge” and (ii) will require, at all times, that the only way funds may be withdrawn from any such Collection Account is by (or on the authorization or instruction of) the Agent in order to apply them in accordance with the provisions of Section 2.4(b)(ii)(B).

6. NEGATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the termination of all of the Commitments and the payment in full of the Obligations:

6.1. Indebtedness. Each Loan Party will not, and will not permit any of its Subsidiaries to, 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. Each Loan Party will not, and will not permit any of its Subsidiaries to, 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. Each Loan Party will not, and will not permit any of its Subsidiaries to,

(a) Other than in order to consummate a Permitted Acquisition, enter into any merger, amalgamation, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger or amalgamation between Loan Parties organized or incorporated in the same jurisdiction; provided, that a Borrower must be the surviving or continuing entity of any such merger or amalgamation to which it is a party, Parent must be the surviving or continuing entity of any such merger or amalgamation to which it is a party, and no merger may occur between Parent and any Borrower, (ii) any merger or amalgamation between a Loan Party and a Subsidiary of such Loan Party that is not a Loan Party so long as such Loan Party is the surviving entity of any such merger or amalgamation (or, in the case of an amalgamation, the continuing corporation resulting therefrom must be liable for the Obligations of such Loan Party under the Loan Documents), and (iii) any merger between Subsidiaries of any Loan Party that are not Loan Parties,

(b) liquidate, wind up, or dissolve itself (or suffer any liquidation, winding up or dissolution), except for (i) the liquidation, winding up or dissolution of non-operating Subsidiaries of any Loan Party with nominal assets and nominal liabilities, (ii) the liquidation, winding up or dissolution of a Loan Party (other than Parent or any Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Equity Interests) of such Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating, winding up or dissolving or such Loan Party has nominal assets and nominal liabilities which are

 

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otherwise disposed of in a Permitted Disposition, or (iii) the liquidation, winding up or dissolution of a Subsidiary of any Loan Party that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) if the Borrowers determine in good faith that such liquidation, winding up or dissolution is in the best interests of the Borrowers, so long as the assets of such liquidating, winding up or dissolving Subsidiary are otherwise disposed of in a Permitted Disposition or are transferred to a Subsidiary of a Loan Party that is not liquidating, winding up or dissolving,

(c) suspend or cease operating a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under Section 6.4, or

(d) change its classification/status for U.S. federal income tax purposes.

6.4. Disposal of Assets. Other than Permitted Dispositions or transactions expressly permitted by Sections 6.3 or 6.9, each Loan Party will not, and will not permit any of its Subsidiaries to, convey, sell, lease, license, assign, transfer, or otherwise dispose of any of its or their assets.

6.5. Nature of Business. Each Loan Party will not, and will not permit any of its Subsidiaries to, make any material change in the nature of its or their business as described in Schedule 6.5 to this Agreement or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, that the foregoing shall not prevent any Loan Party and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.

6.6. Prepayments and Amendments. Each Loan Party will not, and will not permit any of its Subsidiaries to,

(a) Except in connection with Refinancing Indebtedness permitted by Section 6.1,

(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Loan Party or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, (B) Hedge Obligations, (C) Permitted Intercompany Advances, or (D) other Indebtedness so long as the Payment Conditions are satisfied, or

(ii) make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions, or

(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of:

(i) any agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B) Hedge Obligations, (C) Permitted Intercompany Advances, and (D) Indebtedness permitted under clauses (c), (e), (h), (j), (k), (n) and (o) of the definition of Permitted Indebtedness, or

 

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(ii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.

6.7. Restricted Payments. Each Loan Party will not, and will not permit any of its Subsidiaries to, make any Restricted Payment; provided, that so long as it is permitted by law,

(a) so long as no Event of Default shall have occurred and be continuing or would result therefrom, Parent may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Equity Interests of Parent held by such Persons; provided, that the aggregate amount of such redemptions made by Parent during the term of this Agreement plus the amount of Indebtedness outstanding under clause (l) of the definition of Permitted Indebtedness, does not exceed the sum of (i) $10,000,000 in the aggregate, plus (ii) the aggregate amount of Equity Issuance Proceeds received by the Parent in a substantially contemporaneous issuance of new common Equity Interests of the Parent,

(b) so long as no Event of Default shall have occurred and be continuing or would result therefrom, Parent may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to Parent on account of repurchases of the Equity Interests of Parent held by such Persons; provided, that such Indebtedness was incurred by such Persons solely to acquire Equity Interests of Parent,

(c) so long as no Event of Default shall have occurred and be continuing or would result therefrom, Parent’s Subsidiaries may make distributions to Parent (i) in an amount sufficient to pay franchise taxes and other fees required to maintain the legal existence of the Loan Parties and their Subsidiaries to the extent actually used by Parent to pay such taxes, costs and expenses, and (ii) in an amount sufficient to pay out-of-pocket legal, accounting and filing costs and other expenses in the nature of overhead in the ordinary course of business of the Loan Parties and their Subsidiaries,

(d) each Subsidiary may make Restricted Payments to any Loan Party,

(e) the Borrowers and their Subsidiaries may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person,

(f) Restricted Payments may be made which consist of purchases, repurchases, redemptions or other acquisitions or retirements for value of Equity Interest deemed to occur upon the cashless exercise of stock options, warrants, rights to acquire Equity Interests or other convertible securities if such Equity Interests represent a portion of the exercise or exchange price thereof, and any purchases, repurchases, redemptions or other acquisitions or retirements for value of Equity Interests made in lieu of withholding taxes in connection with any exercise or exchange of warrants, options or rights to acquire Equity Interests,

 

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(g) the Borrowers may make cash payments in lieu of the issuance of fractional shares with respect to issuances of Equity Interests otherwise permitted under this Agreement, and

(h) other Restricted Payments so long as the Payment Conditions are satisfied.

6.8. Accounting Methods. Each Loan Party will not, and will not permit any of its Subsidiaries to, modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

6.9. Investments. Each Loan Party will not, and will not permit any of its Subsidiaries to, 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.

6.10. Transactions with Affiliates. Each Loan Party will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of any Loan Party or any of its Subsidiaries except as disclosed on Schedule 6.10 and except for:

(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between such Loan Party or its Subsidiaries, on the one hand, and any Affiliate of such Loan Party or its Subsidiaries, on the other hand, so long as such transactions are no less favorable, taken as a whole, to such Loan Party or its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

(b) any indemnity provided for the benefit of directors (or comparable managers) of a Loan Party or one of its Subsidiaries so long as it has been approved by such Loan Party’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law,

(c) the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of a Loan Party or one of its Subsidiaries in the ordinary course of business and consistent with industry practice so long as it has been approved by such Loan Party’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law,

(d) (i) transactions solely among the US Loan Parties, (ii) transactions solely among the Canadian Loan Parties, (iii) transactions solely among the UK Loan Parties, and (iv) transactions solely among Subsidiaries of Loan Parties that are not Loan Parties,

(e) transactions permitted by Section 6.2, Section 6.3, Section 6.7, or Section 6.9, and

(f) agreements for the non-exclusive licensing of intellectual property, or distribution of products, in each case, among the Loan Parties and their Subsidiaries for the purpose of the counterparty thereof operating its business, and agreements for the assignment of intellectual property from any Loan Party or any of its Subsidiaries to any Loan Party.

 

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6.11. Use of Proceeds. Each Loan Party will not, and will not permit any of its Subsidiaries to, use the proceeds of any Loan made hereunder for any purpose other than (a) on the Closing Date, (i) to repay, in full, the outstanding principal, accrued interest, and accrued fees and expenses or any other amount owing under or in connection with the Existing Credit Facility, and (ii) to pay the fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, in each case, as set forth in the Flow of Funds Agreement, and (b) thereafter, consistent with the terms and conditions hereof, for general corporate purposes; provided that (x) no part of the proceeds of the Loans 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, (y) no part of the proceeds of any Loan or Letter of Credit will be used, directly or, to its knowledge after due care and inquiry, indirectly, to make any payments to a Sanctioned Entity or a Sanctioned Person, to fund any investments, loans or contributions in, or otherwise make such proceeds available to, a Sanctioned Entity or a Sanctioned Person, to fund any operations, activities or business of a Sanctioned Entity or a Sanctioned Person, or in any other manner that would result in a violation of Sanctions by any Person, and (z) that no part of the proceeds of any Loan or Letter of Credit will be used, directly or, to its knowledge after due care and inquiry, indirectly, in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Sanctions, Anti-Corruption Laws or Anti-Money Laundering Laws.

6.12. Limitation on Issuance of Equity Interests. Except for the issuance or sale of Qualified Equity Interests by Parent, each Loan Party will not, and will not permit any of its Subsidiaries to, issue or sell any of the Equity Interests issued by such Loan Party or Subsidiary.

6.13. Inventory with Bailees. Each Borrower will not, and will not permit any of its Subsidiaries to, store its Inventory (other than Inventory at a location with a value of less than $200,000) at any time with a bailee, warehouseman, or similar party except as set forth on Schedule 4.25 (as such Schedule may be amended in accordance with Section 5.14).

6.14. Canadian Employee Benefits. Neither any Parent nor any Borrower will, nor will it permit any of its Subsidiaries to:

(a) establish, maintain, sponsor, administer, contribute to, participate in or assume or incur any liability in respect of any Canadian Pension Plan or amalgamate with any Person if such Person, sponsors, administers, contributes to, participates in or has liability in respect of, any Canadian Defined Benefit Plan; or

(b) fail to make full payment when due of all amounts which, under the provisions of any Canadian Pension Plan, any agreement relating thereto or applicable law if such failure could reasonably be expected to result in a Material Adverse Effect.

 

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7. FINANCIAL COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the termination of all of the Commitments and the payment in full of the Obligations, Parent and Borrowers will maintain a Fixed Charge Coverage Ratio, calculated for each 4 quarter period ending on the first day of any Covenant Testing Period and the last day of each fiscal quarter occurring until the end of any Covenant Testing Period (including the last day thereof), in each case of at least 1.00 to 1.00.

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:

8.1. Payments. 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 (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of five Business Days, (b) all or any portion of the principal of the Loans, or (c) to the extent not converted to a Loan otherwise permitted to be outstanding hereunder, any amount payable to an Issuing Lender in reimbursement of any drawing under a Letter of Credit;

8.2. Covenants. 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 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit any Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrowers’ affairs, finances, and accounts with senior management of any Borrower in accordance with the terms of this Agreement), 5.14 or 5.21 of this Agreement, (ii) Section 6 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 7 of the US Security Agreement or Section 7 of the Canadian Security Agreement;

(b) fails to perform or observe any covenant or other agreement contained in any of Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5, 5.6, 5.8, 5.10, 5.11 and 5.12 of this Agreement and such failure continues for a period of fifteen days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower, or (ii) the date on which written notice thereof is given to Borrowers by Agent; or

(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 thirty days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower, or (ii) the date on which written notice thereof is given to Borrowers by Agent;

 

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8.3. Judgments. If one or more judgments, orders, requirements to pay issued by any Canadian Governmental Authority or awards for the payment of money involving an aggregate amount of $35,000,000, or more (except to the extent fully covered (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 thirty consecutive days at any time after the entry of any such judgment, order, or award during which (i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (ii) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

8.4. Voluntary Bankruptcy, etc. If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

8.5. Involuntary Bankruptcy, etc. If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within sixty calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

8.6. Default Under Other Agreements. If there is a default in 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’ Indebtedness involving an aggregate amount of $35,000,000 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 after any applicable grace or cure period, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder;

8.7. Representations, etc. 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;

8.8. Guaranty. If the obligation of any Guarantor under the guaranty of any of the Obligations (including any guaranty contained in any Security Agreement) is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement) or if any Guarantor repudiates or revokes any such guaranty;

 

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8.9. Security Documents. If the US Security Agreement, any Canadian Security Document, any UK Security Document or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid, enforceable and perfected and, (except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens or the interests of lessors under Capital Leases) first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, (b) as the result of an action or failure to act on the part of Agent; or (c) for any such failure that extends only to Collateral (other than Eligible Accounts or Eligible Inventory) valued at less than $2,500,000 in the aggregate;

8.10. Loan Documents. The validity or enforceability of any Loan Document 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, 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; or

8.11. Change of Control. A Change of Control shall occur.

8.12. UK Insolvency. If any UK Loan Party is unable or admits inability to pay its debts as they fall due, the value of its assets is less than its liabilities (taking into account contingent and prospective liabilities) or suspends making payments on any of its debts, in each case, as contemplated under the Insolvency Act of 1986 (UK).

9. RIGHTS AND REMEDIES.

9.1. Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall, 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) by written notice to Borrowers, (i) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product 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, and (ii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice Borrowers will provide) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters of Credit;

(b) by written notice to Borrowers, declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with (i) any obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation of any Swing Lender to make Swing Loans, and (iii) the obligation of any Issuing Lender to issue Letters of Credit; and

(c) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.

 

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The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4, Section 8.5, or Section 8.12 in addition to the remedies set forth above, without any notice to Borrowers or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrowers shall automatically be obligated to repay all of such Obligations in full (including Borrowers being obligated to provide (and Borrowers agree that they will provide) (1) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations in respect of drawings that may subsequently occur under issued and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products), without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Parent and Borrowers.

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, 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 Default or Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

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 any 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 or PPSA, as applicable, 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 the Loan Parties.

10.3. Indemnification. Each Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, each Issuing Lender, and each Participant (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, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and

 

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irrespective of 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 (provided, that Borrowers shall not be liable for costs and expenses (including attorneys’ fees) of any Lender (other than Wells Fargo) 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, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders unless the dispute involves an act or omission of a Loan Party) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any claims for Taxes, which shall be governed by Section 16, other than Taxes which relate to non-Tax claims), (b) with respect to any actual or prospective investigation, litigation, or proceeding related to this Agreement, any other Loan Document, the making of any Loans or issuance of any Letters of Credit hereunder, or the use of the proceeds of the Loans or the Letters of 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 presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Loan Party or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of any Loan Party or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). 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, bad faith or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents. This provision shall survive the termination of this Agreement and the repayment in full of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrowers were 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. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON. Notwithstanding anything to the contrary in this Section 10.3, no UK Loan Party or Canadian Loan Party shall be liable or responsible for or deemed to be a guarantor of obligations (within the meaning of Section 956(c) of the IRC) of the US Loan Parties.

 

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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 any Loan Party or Agent, as the case may be, they shall be sent to the respective address set forth below:

 

If to any Loan Party:

  

c/o NOW INC.

7402 North Eldridge Parkway

Houston, Texas 77041

Attn: Treasurer

Fax No. (281) 466-4592

with copies to:

  

Haynes and Boone

1221 McKinney Street, Suite 2100

Houston, TX 77010

Attn: Neal M. Kaminsky, Esq.

Fax No.: (713) 236-5608

If to Agent:

  

WELLS FARGO BANK, NATIONAL ASSOCIATION

1100 Abernathy Road, Suite 1600

Atlanta, GA 30328

Attn: Loan Portfolio Manager—dNOW

Fax No.: (855) 260-0212

with copies to:

  

GOLDBERG KOHN LTD.

55 East Monroe Street, Suite 3300

Chicago, Illinois 60603

Attn: Jessica DeBruin, Esq.

Fax No. (312) 863-7857

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 three 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).

 

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12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.

(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, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES 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 .

(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 AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT 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 OF PARENT AND EACH BORROWER 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).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY 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 A “CLAIM”). EACH OF PARENT AND EACH BORROWER 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.

 

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(d) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS 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) NO CLAIM MAY BE MADE BY ANY PARTY HERETO, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH PARTY HERETO HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1. Assignments and Participations.

(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate all or any portion of its rights and duties under the Loan Documents (including the Obligations owed to it and its Commitments) to one or more assignees so long as such prospective assignee is an Eligible Transferee (each, an “Assignee”), with the prior written consent (such consent not be unreasonably withheld or delayed) of:

(A) Borrowers; provided, that no consent of Borrowers shall be required (1) if an Event of Default has occurred and is continuing, or (2) in connection with an assignment to a Person that is a Lender or an Affiliate (other than natural persons) of a Lender; provided further, that Borrowers shall